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Note 8 - Long-term Debt
 9 Months Ended
Sep. 30, 2025
Notes to Financial Statements  
Debt Disclosure [Text Block]

8. LONG-TERM DEBT

 

On April 26, 2024, we refinanced our previous term debt and asset-based lending credit facilities by amending and restating our credit agreement with Bank of America, N.A., as agent, sole lead arranger and sole bookrunner and other lenders party thereto (the "ABL Agreement"). The ABL Agreement consists of a $175.0 million asset-based lending credit facility (the "ABL Facility") and a $50.0 million term loan facility (the "Term Facility"). The ABL Agreement is collateralized by a first-lien on substantially all of the Company's domestic assets. The ABL Facility includes a separate first in, last out (FILO) tranche, which allows the Company to borrow at higher advance rates on eligible accounts receivable and inventory balances. As of  September 30, 2025, we had borrowing capacity of $40.1 million under the ABL Facility. The Term Facility provides for monthly principal payments until the date of maturity, at which date the remaining principal balance is due.

 

The April 26, 2024 refinance of debt resulted in a $2.6 million expense within Interest Expense and Other - net in the accompanying Unaudited Combined Condensed Statements of Operations, consisting of a $1.1 million loss on term loan extinguishment and a $1.5 million term loan prepayment penalty for the nine months ended September 30, 2024. The $1.1 million loss on term loan extinguishment is included as a noncash adjustment to net income and the $1.5 million prepayment penalty is included within Repayments of long-term debt in the accompanying Unaudited Combined Condensed Statements of Cash Flows for the nine months ending September 30, 2024.

 

 

Loans under the ABL Agreement bear interest at a variable rate equal to either (i) the Base Rate (as calculated in the ABL Agreement) or (ii) Term SOFR (as calculated in the ABL Agreement), plus in each case an interest margin determined by the Company's average daily availability as a percentage of the aggregate amount of revolving commitments for revolving loans and term loans, with a range of Base Rate margins and term SOFR margins, as set forth of the following chart: 

 

Revolver Pricing Level

 

  

Average Availability as a Percentage of Commitments

  

Term SOFR Term Loan

    

Base Rate Term Loan

    

Term SOFR Revolver Loan

    

Base Rate Revolver Loan

    

Term SOFR FILO Loan

    

Base Rate FILO Loan

  

I

  

> 66.7%

     2.75 %     1.50 %     1.25 %     0.00 %     1.75 %     0.50 %

II

  

>33.3% and < or equal to 66.7%

     3.00 %     1.50 %     1.50 %     0.00 %     2.00 %     0.50 %

III

  

< or equal to 33.3%

     3.25 %     1.75 %     1.75 %     0.25 %     2.25 %     0.75 %

 

In connection with the ABL Agreement, we paid certain fees that were capitalized and will be amortized over the life of such agreement. 

 

Current and long-term debt under the ABL Agreement consisted of the following: 

 

   

September 30,

    

December 31,

    

September 30,

  

($ in thousands)

  

2025

    

2024

    

2024

  

Term Facility that matures in 2029 with an effective interest rate of 7.67% as of September 30, 2025, 10.47% as of December 31, 2024 and 8.82% as of September 30, 2024, respectively

   $ 28,852     $ 35,123     $ 47,213  

ABL Facility that matures in 2029:

                        

SOFR borrowings with an effective interest rate of 6.06% as of September 30, 2025, 6.24% as of December 31, 2024 and 6.76% as of September 30, 2024, respectively

     110,800       91,300       105,000  

Prime borrowings with an effective interest rate of 7.71% as of September 30, 2025, 7.77% as of December 31, 2024 and 8.47% as of September 30, 2024, respectively

     1,265       4,577       470  

Total debt

     140,917       131,000       152,683  

Less: Unamortized debt issuance costs

     (1,872 )     (2,263 )     (2,393 )

Total debt, net of debt issuance costs

     139,045       128,737       150,290  

Less: Debt maturing within one year

     (8,361 )     (8,361 )     (8,361 )

Long-term debt

   $ 130,684     $ 120,376     $ 141,929  

 

A schedule of debt payments for the next five years is as follows:

 

     

Debt Payment

  

($ in thousands)

Year

  

Schedule

  
 

2025

   $ 2,090  
 

2026

     8,361  
 

2027

     8,361  
 

2028

     8,361  
 

2029

     113,744  
 

Total

   $ 140,917  

 

Credit Facility Covenants

 

Our ABL Facility and Term Facility require us to maintain a minimum fixed charge coverage ratio, as defined in the ABL Agreement. As of September 30, 2025, we were in compliance with all credit facility covenants. The ABL Facility and Term Facility also contain restrictions on the amount of dividend payments and share repurchases. As of September 30, 2025, the Company was in compliance with the amounts paid on dividends and share repurchases in accordance with our credit facilities.

 

We were in compliance with all applicable credit facility covenants under our previous term debt and asset-based lending credit facility through April 26, 2024, the date on which we refinanced such debt.