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Long-term debt

9 Months Ended

Jun. 30, 2025

5.	Long-term debt

Senior credit facility

In September 2022, the Company entered into a five-year, $110,000,000 senior credit facility (“Facility”) with a group of US banks. The Facility consists of (i) a delayed-draw term loan facility of $85,000,000, of which $64,000,000 has been drawn as of June 30, 2025, (ii) a term loan of $5,000,000 that was drawn at closing, and (iii) a $20,000,000 revolving credit facility. The Facility is secured by substantially all assets of the Company and is subject to certain financial covenants, with which the Company was in compliance as of June 30, 2025.

A summary of the balances on the Facility as of June 30, 2025 and September 30, 2024 is as follows:


	As of		As of
	June 30, 2025		September 30, 2024
Delayed-draw term loan	$	56,000	$	58,400
Term loan		4,312		4,500
Revolving credit facility		5,700		6,323
Total principal		66,012		69,223
Deferred financing costs		(1,058)		(1,430)
Net carrying value	$	64,954	$	67,793

Current portion		3,303		3,248
Long-term portion		61,651		64,545
Net carrying value	$	64,954	$	67,793

As of June 30, 2025, scheduled repayments of the Facility are as follows:


Twelve months ended June 30,	Amount
2026	$	3,450
2027		3,450
2028		59,112
Total	$	66,012

The delayed-draw term loan and the term loan bear interest at a weighted average of 7.0% as of June 30, 2025, and will reprice within three months. The rate is based on a secured overnight financing rate (“SOFR”), with a floor of 0.5%, plus a spread of 2.1% to 2.85% (2.65% as of June 30, 2025) based on the Company’s leverage ratio. The revolving credit facility is bearing interest at 7.6% as of June 30, 2025 and will reprice within three months. The Facility also has fees for unused availability. The fair value of the Facility was determined considering market conditions, credit worthiness and the current terms of debt, which is considered Level 2 on the fair value hierarchy. Due to the near-term repricing of the interest rates, the fair value of the Facility approximates the principal value as of June 30, 2025 and September 30, 2024.

To manage the risks of the cash flows related to interest expense, the Company entered into several interest rate swaps on $59,000,000 of the principal amount of the Facility during the year ended September 30, 2024. The swaps carry a fixed SOFR of 3.4% to 4.4%, resulting in a weighted combined rate of 6.8%. The swaps are settled quarterly and mature on September 30, 2025, on September 30, 2026, and at the Facility’s maturity. Any difference between the Facility’s SOFR rate and the swaps’ rates is recorded as interest expense. For the three months ended June 30, 2025 and 2024, a reduction of $38,000 and $84,000, respectively, to interest expense was recorded in the condensed consolidated interim statements

of income (loss). For the nine months ended June 30, 2025 and 2024, a reduction of $155,000 and $201,000, respectively, to interest expense was recorded in the condensed consolidated interim statements of income (loss).

Interest expense on the Facility, including the impact of the interest rate swap agreements, was $1,211,000 and $1,297,000 for the three months ended June 30, 2025 and 2024, respectively, and $3,807,000 and $3,997,000 for the nine months ended June 30, 2025 and 2024, respectively.

The Company has incurred financing costs to obtain and maintain the Facility, which is reflected as a reduction of the outstanding balance and will be amortized as interest expense using the effective interest method over the life of the Facility. During the three months ended June 30, 2025 and 2024, $132,000 and $128,000 of amortization of deferred financing costs was recorded, respectively. During the nine months ended June 30, 2025 and 2024, $401,000 and $385,000 of amortization of deferred financing costs was recorded, respectively.

Equipment loans

The Company is offered financing arrangements from the Company’s suppliers and the supplier’s designated financial institution, in which payments for certain invoices or products can be financed and paid over an extended period. The financial institution pays the supplier when the original invoice becomes due, and the Company pays the third-party financial institution over a period of time. In most cases, the supplier accepts a discounted amount from the financial institution and the Company repays the financial institution the face amount of the invoice with no stated interest, in twelve equal monthly installments. The Company uses its incremental borrowing rate of 6.9% to 8.0% to impute interest on these arrangements.

Following is the activity in equipment loans for the nine months ended June 30, 2025 and 2024:


	Nine months ended		Nine months ended
	June 30, 2025		June 30, 2024
Beginning balance	$	12,859	$	14,347
Additions		16,192		19,411
Repayments		(18,513)		(20,327)
Ending balance		10,538		13,431
Current portion		10,525		13,335
Long-term portion	$	13	$	96

Leases liabilities

The Company enters into leases for real estate and vehicles. Real estate leases are operating leases and are valued at the net present value of the future lease payments at the Company’s incremental borrowing rate. Vehicle leases are finance leases and recorded at the rate implicit in the lease based on the current value and the estimated residual value of the vehicle, if any.

Following is the activity in lease liabilities for the nine months ended June 30, 2025 and 2024:



	Operating		Finance		Total
Balance September 30, 2023	$	16,236	$	2,914	$	19,150
Additions		3,049		1,760		4,809
Non-cash adjustments		(139)		—		(139)
Repayments		(3,238)		(1,139)		(4,377)
Balance June 30, 2024	$	15,908	$	3,535	$	19,443

Balance September 30, 2024	$	15,840	$	3,310	$	19,150
Additions		2,100		492		2,592
Non-cash adjustments		(79)		—		(79)
Repayments		(3,687)		(1,115)		(4,802)
Balance June 30, 2025	$	14,174	$	2,687	$	16,861

Future payments pursuant to lease liabilities are as follows:


Twelve Months Ending June 30,	Operating		Finance		Total
2026	$	5,449	$	1,235	$	6,684
2027		4,144		923		5,067
2028		2,959		594		3,553
2029		2,074		254		2,328
2030		850		26		876
Thereafter		712		—		712
Gross lease payments		16,188		3,032		19,220
Less amounts relating to interest		(2,014)		(345)		(2,359)
Lease liabilities	$	14,174	$	2,687	$	16,861

The components of finance lease expense are as follows:


		Three months ended June, 30				Nine months ended June, 30
	Classification		2025		2024		2025		2024
Finance lease cost:
Amortization of lease assets	Depreciation	$	262	$	343	$	867	$	982
Interest on lease liabilities	Interest expense		57		69		190		194
Total finance lease cost		$	319	$	412	$	1,057	$	1,176

Other information relating to leases is as follows:


	As of			As of
	June 30, 2025			September 30, 2024
Weighted average remaining lease term (years)
Operating leases		3.7			4.1
Finance leases		2.8			2.8

Weighted average discount rate
Operating leases		7.2	%		7.4	%
Finance leases		9.0	%		8.5	%