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Debt | 12 Months Ended
--- | ---
Dec. 31, 2024
Debt Disclosure [Abstract] |
Debt | Note 7. Debt Debt is comprised of the following indebtedness to various lenders:
(in millions) |  | December 31, 2024 |  |  | December 31, 2023 |
Extended Term Loan Facility, with interest at SOFR plus 5.10% as of December 31, 2024 and 2023, respectively, (equal to 9.46% and 10.46% at December 31, 2024 and 2023, respectively) due 2026, net(a) |  | $ | 402.7 |  |  | $ | 402.9 |
Less: Current maturities |  |  | 4.2 |  |  |  | 4.2 |
Long-term debt, net of current maturities, debt discount and deferred financing fees |  | $ | 398.5 |  |  | $ | 398.7 |
(a) The Extended Term Loan Facility (as defined below), scheduled to mature on May 22, 2026, was recorded net of unamortized discount of $5.6 million and net of unamortized deferred financing fees of $0.9 million as of December 31, 2024. The Extended Term Loan Facility as of December 31, 2023 was recorded net of unamortized discount of $8.9 million and net of unamortized deferred financing fees of $1.5 million. The fair market value of the Company’s debt under the Extended Term Loan Facility was $411.0 million as of December 31, 2024. Term Loan Facility On June 12, 2023, (the “Term Loan Amendment Effective Date”) Emerald X, Inc. (“Emerald X”), a wholly-owned subsidiary of the Company, entered into a Sixth Amendment (the “Term Loan Amendment”) to its Amended and Restated Credit Agreement by and among Emerald X, as Borrower, the guarantors party thereto, the lenders party thereto and Bank of America, N.A., as administrative agent, which amends that certain Amended and Restated Credit Agreement, dated as of May 22, 2017 (as amended from time to time, the “Amended and Restated Credit Agreement”). The Term Loan Amendment extended the maturity of the term loans outstanding under the Amended and Restated Credit Agreement (such term loan facility, as effect prior to the Term Loan Amendment Effective Date, the “Amended and Restated Term Loan Facility”, and as extended by the Term Loan Amendment, the “Extended Term Loan Facility”) from May 22, 2024 to May 22, 2026. The aggregate outstanding principal amount of the Extended Term Loan Facility was approximately $415.3 million as of the Term Loan Amendment Effective Date. Of the $415.3 million, $175.9 million was funded through a non-cash rollover from existing lenders and $239.4 million was funded through cash transactions. The Term Loan Amendment replaced the interest rate applicable to the term loans with a rate equal to, at the option of Emerald X, (i) the Term Secured Overnight Financing Rate (“Term SOFR”) plus 5.00% per annum plus a credit spread adjustment of 0.10% per annum or (ii) an alternate base rate (“ABR”) plus 4.00% per annum. Prior to the Term Loan Amendment, the interest rate applicable to the term loans was a rate equal to, at the option of Emerald X, (i) LIBOR plus 2.75% or 2.50% per annum, depending on Emerald X’s first lien net leverage ratio or (ii) ABR plus 1.75% or 1.50% per annum, depending on Emerald X’s first lien net leverage ratio. The effective interest rate at December 31, 2024 and December 31, 2023 was 10.68% and 11.66%, respectively. The Extended Term Loan Facility proceeds of $415.3 million, net of $12.5 million of original issuance discount (“OID”), were used to repay the previously outstanding principal and interest under the Amended and Restated Term Loan Facility and third party fees of $3.5 million. Of the $12.5 million of OID paid, $2.1 million was recognized as loss on extinguishment of debt and $10.4 million will be amortized over the life of the Extended Term Loan Facility using the effective interest method. Of the $3.5 million in third party fees, $2.1 million was recognized as interest expense and $1.4 million will be amortized over the life of the Extended Term Loan Facility using the effective interest method. As of December 31, 2023, there were no unpaid debt issuance costs. The loss on extinguishment of debt of $2.3 million for the year ended December 31, 2023, included $2.1 million of OID related to the Extended Term Loan Facility and $0.2 million of previously capitalized OID and debt issuance costs which were allocated to lenders whose balances were extinguished. The Term Loan Amendment also reset scheduled quarterly payments, each equal to 0.25% of the original principal amount of the Extended Term Loan Facility. Further, the Term Loan Amendment modified the prepayment provisions so that, upon the occurrence of a repricing transaction, subject to certain specified exceptions, Emerald X would have been required to pay a prepayment fee of 2%, in the event of a repricing transaction occurring within the first twelve months after the Term Loan Amendment Effective Date, or 1%, in the event of a repricing transaction occurring on a date that is between twelve months after the Term Loan Amendment Effective Date and eighteen months after the Term Loan Amendment Effective Date. No prepayment premium is payable for prepayments made after the eighteen month anniversary of the Term Loan Amendment Effective Date. Emerald X made no voluntary prepayments on the Extended Term Loan Facility during the years ended December 31, 2024 and 2023. Revolving Credit Facility On February 2, 2023, Emerald X entered into a Fifth Amendment (the “RCF Amendment”) to its Amended and Restated Credit Agreement. The RCF Amendment increased the aggregate amount of all revolving commitments under the Amended and Restated Credit Agreement from $100.4 million to $110.0 million (such facility, as amended by the RCF Amendment, the “Extended Revolving Credit Facility”). The increased revolving commitments have the same terms as the previously existing revolving commitments. The RCF Amendment did not change any other material terms of the Amended and Restated Credit Agreement. The Company paid $0.6 million in financing fees related to the RCF Amendment during the first quarter of 2023. Emerald X was required to pay a quarterly commitment fee in respect of the unutilized revolving commitments under the Amended and Restated Credit Agreement in an amount equal to 0.50% per annum, calculated on the unused portion of the facility, which is reduced to 0.375% upon achievement of a Total First Lien Ratio of 3.50 to 1.00. Upon the issuance of letters of credit under the Amended and Restated Credit Agreement, Emerald X was required to pay fronting fees, customary issuance and administration fees and a letter of credit fee equal to the then-applicable margin (as determined by reference to Term SOFR) for the Amended and Restated Credit Agreement. Emerald X had no outstanding borrowings under the revolving portion of its Amended and Restated Credit Agreement as of December 31, 2024 and 2023. Emerald X had $0.7 million and $1.0 million, respectively, in stand-by letters of credit outstanding under the revolving portion of its Amended and Restated Credit Agreement as of December 31, 2024 and 2023. During the years ended December 31, 2024 and 2023, revolving borrowings under the Amended and Restated Credit Agreement were subject to an interest rate equal to Term SOFR plus 2.25% or ABR plus 1.25%. As of December 31, 2024, Emerald X had $109.3 million in additional revolving borrowing capacity under the Amended and Restated Credit Agreement (after giving effect to $0.7 million of outstanding letters of credit). Guarantees; Collateral; Covenants; Events of Default All obligations under the Amended and Restated Senior Secured Credit Facilities were guaranteed by Emerald X’s direct parent company and, subject to certain exceptions, by all of Emerald X’s direct and indirect wholly owned domestic subsidiaries. As of December 31, 2024, all of Emerald X’s domestic subsidiaries and Emerald X’s direct parent have provided guarantees. Subject to certain limitations, the obligations under the Amended and Restated Senior Secured Credit Facilities were secured by a perfected first priority security interest in substantially all tangible and intangible assets owned by Emerald X or by any guarantor. The Amended and Restated Senior Secured Credit Facilities contained customary incurrence-based negative covenants, including limitations on indebtedness; limitations on liens; limitations on certain fundamental changes (including, without limitation, mergers, consolidations, liquidations and dissolutions); limitations on asset sales; limitations on dividends and other restricted payments; limitations on investments, loans and advances; limitations on repayments of subordinated indebtedness; limitations on transactions with affiliates; limitations on changes in fiscal periods; limitations on agreements restricting liens and/or dividends; and limitations on changes in lines of business. In addition, the Extended Revolving Credit Facility contained a financial covenant requiring Emerald X to comply with a 5.50 to 1.00 total first lien net secured leverage ratio test. This financial covenant was required to be tested quarterly only if the aggregate amount of revolving loans, swingline loans and letters of credit outstanding under the Extended Revolving Credit Facility (net of up to $10.0 million of outstanding letters of credit and cash collateralized letters of credit) exceeded 35% of the total commitments thereunder. As of December 31, 2024, this financial covenant had not been triggered and Emerald X was in compliance with all covenants under the Amended and Restated Senior Secured Credit Facilities. Events of default under the Amended and Restated Senior Secured Credit Facilities include, among others, nonpayment of principal when due; nonpayment of interest, fees or other amounts; cross-defaults; covenant defaults; material inaccuracy of representations and warranties; certain bankruptcy and insolvency events; material unsatisfied or unstated judgments; certain ERISA events; change of control; or actual or asserted invalidity of any guarantee or security document. There were no events of default under the Amended and Restated Senior Secured Credit Facilities through December 31, 2024. During the years ended December 31, 2024, 2023 and 2022, Emerald X made no revolving loan borrowings or revolving loan repayments under the Amended and Restated Credit Agreement. Interest Expense Interest expense reported in the consolidated statements of (loss) income and comprehensive (loss) income consists of the following:
|  | Year Ended December 31, |
(in millions) |  | 2024 |  |  | 2023 |  |  | 2022 |
Extended Term Loan Facility |  | $ | 43.0 |  |  | $ | 23.8 |  |  | $ | — |
Amended and Restated Term Loan Facility |  |  | — |  |  |  | 13.9 |  |  |  | 22.3 |
Term Loan Amendment third party fees |  |  | — |  |  |  | 2.1 |  |  |  | — |
Non-cash interest for amortization of debt discount and debt issuance costs |  |  | 4.3 |  |  |  | 3.0 |  |  |  | 1.7 |
Revolving credit facility interest and commitment fees |  |  | 0.5 |  |  |  | 0.5 |  |  |  | 0.5 |
Total interest expense |  | $ | 47.8 |  |  | $ | 43.3 |  |  | $ | 24.5 |

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- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481544/470-10-50-6 Reference 2: 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