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Long-term Debt | 9 Months Ended
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Sep. 30, 2021
Debt Disclosure [Abstract] |
Long-term Debt | Long-term Debt As of September 30, 2021 and December 31, 2020, long-term debt consisted of the following (in thousands):
| September 30, 2021 |  | December 31, 2020
Revolving credit facilities(1) | $ | — |  |  | $ | 18,408 |
2026 Notes(2) | 131,071 |  |  | — |
2023 Notes(3) | 25,765 |  |  | 143,242 |
Promissory note | 17,534 |  |  | 17,095 |
Other debt and finance lease obligations | 4,298 |  |  | 4,792 |
Total debt | 178,668 |  |  | 183,537 |
Less: Current portion | (18,234) |  |  | (17,778) |
Total long-term debt | $ | 160,434 |  |  | $ | 165,759 |
____________________ (1)Presented net of $0.6 million of unamortized deferred financing costs as of December 31, 2020. Unamortized deferred financing costs of $2.9 million as of September 30, 2021 are presented in Other noncurrent assets. (2)The outstanding principal amount of the 2026 Notes was $135.0 million as of September 30, 2021. (3)The outstanding principal amount of the 2023 Notes was $26.0 million and $157.4 million as of September 30, 2021 and December 31, 2020, respectively. Revolving Credit Facilities ABL Facility On February 10, 2021, the Company entered into a senior secured credit facility with certain lenders, which provides for a $125.0 million asset-based revolving credit facility (the "ABL Facility") under which credit availability is subject to a borrowing base calculation. Concurrent with entering into this facility, the Company's former senior secured revolving credit facility (discussed below) was terminated. On March 16, 2021, the Company entered into an amendment to the ABL Facility that permitted the Company to incur the indebtedness represented by the 2026 Notes. The ABL Facility is governed by a credit agreement, as amended, with Wells Fargo Bank, National Association, as administrative agent and the lenders and other financial institutions from time to time party thereto (the "ABL Agreement"). The ABL Agreement matures on February 10, 2025 with a springing maturity 91 days prior to the maturity of any outstanding indebtedness with a principal amount in excess of $17.5 million (excluding the unsecured promissory note discussed below). The ABL Agreement provides funding based on a borrowing base calculation that includes eligible U.S. customer accounts receivable and inventory and provides for a $50.0 million sub-limit for the issuance of letters of credit. Borrowings under the ABL Agreement are secured by a pledge of substantially all of the Company's domestic assets (other than real property) and the stock of certain foreign subsidiaries. Borrowings under the ABL Agreement bear interest at a rate equal to the London Interbank Offered Rate ("LIBOR") plus a margin of 2.75% to 3.25% and subject to a LIBOR floor rate of 0.50%, or at a base rate plus a margin of 1.75% to 2.25%, in each case based on average borrowing availability. Quarterly, the Company must also pay a commitment fee of 0.375% to 0.50% per annum, based on unused commitments under the ABL Agreement. The ABL Agreement places restrictions on the Company's ability to incur additional indebtedness, grant liens on assets, pay dividends or make distributions on equity interests, dispose of assets, make investments, repay other indebtedness (including the 2023 Notes and the 2026 Notes), engage in mergers, and other matters, in each case, subject to certain exceptions. The ABL Agreement contains customary default provisions, which, if triggered, could result in acceleration of all amounts then outstanding. The ABL Agreement also requires the Company to satisfy and maintain a fixed charge coverage ratio of not less than 1.0 to 1.0 for specified periods of time: in the event that availability under the ABL Agreement is less than the greater of 15% of the borrowing base and $14.1 million; to complete certain specified transactions; or if an event of default has occurred and is continuing. As of September 30, 2021, the Company had $16.5 million of outstanding letters of credit, but no borrowings outstanding under the ABL Agreement. The total amount available to be drawn as of September 30, 2021 was $61.4 million, calculated based on the current borrowing base less outstanding borrowings, if any, and letters of credit. As of September 30, 2021, the Company was in compliance with its debt covenants under the ABL Agreement. Former Revolving Credit Facility Until its termination on February 10, 2021, the Company's former senior secured revolving credit facility was governed by a credit agreement which was scheduled to mature on January 30, 2022. On June 17, 2020, the Company entered into an omnibus amendment to the credit agreement, under which lender commitments were reduced in exchange for the suspension of certain financial covenants through March 30, 2021. The following provides a summary of the more significant provisions of the Company's former revolving credit facility.
| Prior to June 17, 2020 |  | From June 17, 2020 to February 10, 2021
Lender commitments | $350 million |  | $200 million
Interest rate on outstanding borrowings(1): |  |  |
LIBOR based borrowings | LIBOR plus a margin of 1.75% to 3.00% |  | LIBOR plus a margin of 2.50% to 3.75%
Base-rate based borrowings | Base rate plus a margin of 0.75% to 2.00% |  | Base rate plus a margin of 1.50% to 2.75%
Commitment fees(2) | 0.25% to 0.50% |  | 0.375% to 0.50%
____________________ (1)Based on the ratio of the Company's total net funded debt to consolidated EBITDA. (2)Based on unused commitments under the credit agreement. 2026 Notes On March 19, 2021, the Company issued $135.0 million aggregate principal amount of the 2026 Notes pursuant to an indenture, dated as of March 19, 2021 (the "2026 Indenture"), between the Company and Wells Fargo Bank, National Association, as trustee. Net proceeds from the 2026 Notes offering, after deducting issuance costs, totaled $130.6 million. The Company used $120.0 million of the cash proceeds to purchase $125.0 million principal amount of the outstanding 2023 Notes at a discount, with the balance added to cash on-hand. The 2026 Notes bear interest at a rate of 4.75% per year and will mature on April 1, 2026, unless earlier repurchased, redeemed or converted. Interest is payable semi-annually in arrears on April 1 and October 1 of each year. Additional interest and special interest may accrue on the 2026 Notes under certain circumstances as described in the 2026 Indenture. The initial conversion rate is 95.3516 shares of the Company's common stock per $1,000 principal amount of 2026 Notes (equivalent to an initial conversion price of approximately $10.49 per share of common stock). The conversion rate, and thus the conversion price, may be adjusted under certain circumstances as described in the 2026 Indenture. The Company's intent is to repay the principal amount of the 2026 Notes in cash and settle the conversion feature in shares of the Company's common stock. Noteholders may convert their 2026 Notes, at their option, only in the following circumstances: (1) if the last reported sale price per share of the Company's common stock exceeds 130% of the conversion price for each of at least 20 trading days during the 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter; (2) during the five consecutive business days immediately after any five consecutive trading day period (such five consecutive trading day period, the "measurement period") in which the trading price per $1,000 principal amount of the 2026 Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price per share of the Company's common stock on such trading day and the conversion rate on such trading day; (3) upon the occurrence of certain corporate events or distributions on the Company's common stock, as described in the 2026 Indenture; or (4) if the Company calls the 2026 Notes for redemption, or at any time from, and including, January 1, 2026 until the close of business on the second scheduled trading day immediately before the maturity date. The Company will settle conversions by paying or delivering, as applicable, cash, shares of common stock or a combination of cash and shares of common stock, at the Company's election, based on the applicable conversion rate(s). If the Company elects to deliver cash or a combination of cash and shares of common stock, then the consideration due upon conversion will be based on a defined observation period. The 2026 Notes will be redeemable, in whole or in part, at the Company's option on or after April 6, 2024, at a cash redemption price equal to the principal amount of the 2026 Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date, but only if the last reported sale price per share of common stock exceeds 130% of the conversion price on each of at least 20 trading days during the 30 consecutive trading days ending on, and including, the trading day immediately before the date the Company sends the related redemption notice. If specified change in control events involving the Company as defined in the 2026 Indenture occur, then noteholders may require the Company to repurchase their 2026 Notes at a cash repurchase price equal to the principal amount of the 2026 Notes to be repurchased, plus accrued and unpaid interest. Additionally, the 2026 Indenture contains certain events of default, including certain defaults by the Company with respect to other indebtedness of at least $40.0 million. As of September 30, 2021, none of the conditions allowing holders of the 2026 Notes to convert, or requiring the Company to repurchase the 2026 Notes, had been met. 2023 Notes On January 30, 2018, the Company issued $200.0 million aggregate principal amount of the 2023 Notes, pursuant to an indenture, dated as of January 30, 2018 (the "2023 Indenture"), between the Company and Wells Fargo Bank, National Association, as trustee. The 2023 Notes bear interest at a rate of 1.50% per year and will mature on February 15, 2023, unless earlier repurchased, redeemed or converted. The initial conversion rate is 22.2748 shares of the Company's common stock per $1,000 principal amount of 2023 Notes (equivalent to an initial conversion price of approximately $44.89 per share of common stock). The conversion rate, and thus the conversion price, may be adjusted under certain circumstances as described in the 2023 Indenture. The Company's intent is to repay the principal amount of the Notes in cash and settle the conversion feature in shares of the Company's common stock. The initial carrying amount of the 2023 Notes recorded in the consolidated balance sheet was less than their principal amount, in accordance with then-applicable accounting principles, reflective of the estimated fair value of a similar debt instrument that did not have a conversion feature. The Company recorded the value of the conversion feature as a debt discount, which was amortized as interest expense over the term of the 2023 Notes, with a similar amount allocated to additional paid-in capital. As a result of this amortization, prior to the Company's adoption of the ASU 2020-06 revision to accounting guidance for convertible instruments effective January 1, 2021, the interest expense recognized on the 2023 Notes for accounting purposes was based on an effective interest rate of approximately 6%, which was greater than the cash interest the Company is obligated to pay. See Note 2, "Recent Accounting Pronouncement," for discussion of ASU 2020-06, which changed the Company's method of accounting for the 2023 Notes upon adoption. The following table provides details with respect to the carrying amount of the 2023 Notes in the consolidated balance sheets as of September 30, 2021 and December 31, 2020 (in thousands):
| September 30, 2021 |  | December 31, 2020
Principal amount of the liability component | $ | 25,969 |  |  | $ | 157,369 |
Less: Unamortized discount | — |  |  | 12,308 |
Less: Unamortized issuance costs | 204 |  |  | 1,819 |
Net carrying amount of the liability component | $ | 25,765 |  |  | $ | 143,242 |
Net carrying amount of the equity component | n.a. |  | $ | 25,683 |
The following table presents the Company's purchases of outstanding 2023 Notes during the three and nine months ended September 30, 2021 and 2020, with non-cash gains included within other income, net (in thousands):
| Principal Amount |  | Carrying Value of Liability |  | Cash Paid |  | Non-cash Gains Recognized
Three Months Ended September 30, |  |  |  |  |  |  |
2021 | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
2020 | 17,200 |  |  | 15,425 |  |  | 9,483 |  |  | 5,942 |
Nine Months Ended September 30, |  |  |  |  |  |  |
2021 | $ | 131,400 |  |  | $ | 129,974 |  |  | $ | 125,952 |  |  | $ | 4,022 |
2020 | 34,881 |  |  | 30,799 |  |  | 20,078 |  |  | 10,721 |
Since December 31, 2018, the Company has purchased a cumulative $174.0 million principal amount of the outstanding 2023 Notes for $152.8 million in cash. Promissory Note In connection with the 2018 acquisition of GEODynamics (the "GEODynamics Acquisition"), the Company issued a $25.0 million promissory note that bears interest at 2.50% per annum and was scheduled to mature on July 12, 2019. Payments due under the promissory note are subject to set-off, in full or in part, against certain indemnification claims related to matters occurring prior to the GEODynamics Acquisition. The Company has provided notice to and asserted indemnification claims against the seller of GEODynamics (the "Seller"), and the Seller has filed a breach of contract suit against the Company and one of its wholly-owned subsidiaries alleging that payments due under the promissory note are required to be, but have not been, repaid in accordance with the terms of such note. The Company has incurred settlement costs and expenses of $7.5 million related to such indemnification claims, and believes that the maturity date of such note is extended until the resolution of such indemnity claims and that it is permitted to set-off the principal amount owed by the amount of such costs and expenses. Accordingly, the Company has reduced the carrying amount of such note in the consolidated balance sheet to $17.5 million as of September 30, 2021, which is its current best estimate of what is owed after set-off for such indemnification matters. See Note 13, "Commitments and Contingencies."

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