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Credit Facilities | 12 Months Ended
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Sep. 30, 2022
Cash and Cash Equivalents [Abstract] |
Credit Facilities | Credit Facilities A summary of our credit facilities as of September 30, 2022 and 2021 is as follows (in millions):
|  |  |  | 2022 |  | 2021
|  | Arrangement |  | Loan Balance |  | Interest |  | Loan Balance |  | Interest
|  | Secured term loan (a) due September 30, 2025 |  | $ | 22.0 |  |  | LIBOR* + 2.5% |  | $ | 46.8 |  |  | LIBOR* + 3.5%
|  | Secured revolving line of credit (b) due September 30, 2025 |  | $ | — |  |  | LIBOR* + 2.5% |  | $ | — |  |  | LIBOR* + 3.5%
*LIBOR rate as of September 30, 2022 and 2021 was 2.52% and 0.08%, respectively. As of September 30, 2022 and 2021, our LIBOR rate is subject to a minimum floor of 0.5%. (a) Represents the principal amounts payable on our secured term loan, which is secured by liens on substantially all of the assets of the Company. The principal of the secured term loan is payable in quarterly installments with the remaining balance due on September 30, 2025. The Credit Agreement requires compliance with a number of financial covenants and contains restrictions on our ability to engage in certain transactions. Among other matters, we must comply with limitations on: granting liens; incurring other indebtedness; maintenance of assets; investments in other entities and extensions of credit; mergers and consolidations; and changes in nature of business. The loan agreement also requires us to comply with certain quarterly financial covenants including: (i) a minimum fixed charge coverage ratio of at least 1.25 to 1.00, and (ii) a Funded Indebtedness to Adjusted EBITDA ratio not exceeding the ratio of 3.75:1.0 to 2.75:1.0 through maturity. Adjusted EBITDA ratio is calculated by dividing the Company's total interest-bearing debt by net income adjusted to exclude (i) interest and other expenses, (ii) provision for or benefit from income taxes, if any, (iii) depreciation and amortization, and (iv) non-recurring charges, losses or expenses to include transaction and non-cash equity expense. The secured term loan has an interest rate spread range from 2.5% to 4.5% depending on the funded indebtedness to adjusted EBITDA ratio. We are in compliance with all loan covenants and restrictions. We are required to pay quarterly amortization payments commencing in December 2020 through September 2025. The annual amortization amounts are $7.0 million each for fiscal years 2021 and 2022 and $8.75 million each for fiscal years 2023 through 2025, with the remaining unpaid loan balance due at maturity in September 2025. The quarterly payments are in equal installments. As of September 30, 2022, the Company made voluntary prepayments of $34.0 million, bringing the total amount paid on the secured term loan to $48.0 million. As of September 30, 2022, we have satisfied mandatory principal amortization until September 30, 2025. In addition to quarterly payments of the outstanding indebtedness, the loan agreement also requires annual payments of a percentage of excess cash flow, as defined in the loan agreement. The loan agreement states that an excess cash flow recapture payment must be made equal to (a) 75% of the excess cash flow for the immediately preceding fiscal year in which indebtedness to consolidated EBITDA ratio is greater than or equal to 2.50:1.0; (b) 50% of the excess cash flow for the immediately preceding fiscal year in which the funded indebtedness to consolidated EBITDA Ratio is less than 2.50:1.0 but greater than or equal to 1.5:1.0; or (c) 0% of the excess cash flow for the immediately preceding fiscal year in which the funded indebtedness to consolidated EBITDA Ratio is less than 1.5:1.0. In addition, the Company must make additional mandatory prepayment of amounts outstanding based on proceeds received from asset sales and sales of certain equity securities or other indebtedness. Due to the voluntary prepayment of term debt, there was no excess cash flow payment required. For additional information regarding the schedule of future payment obligations, please refer to Note 10 Commitments and Contingencies. On September 30, 2019, we executed a floating-to-fixed interest rate swap with First National Bank ("FNB") as counter party. The notional amount in the floating-to-fixed interest rate swap on September 30, 2022 is $16.2 million and matures in 2024. The remaining outstanding balance of our secured term loan is subject to interest rate fluctuations and the minimum LIBOR floor. On the notional amount, the Company pays a base fixed rate of 1.61%, plus applicable credit spread. As a result, for the year ended September 30, 2022, interest expense increased by approximately $0.2 million. (b) The secured revolving line of credit has a ceiling of up to $25.0 million; as of September 30, 2022, we had unused borrowing capacity of $23.0 million, which is net of outstanding letters of credit. Borrowing on the secured revolving line of credit is secured by liens on substantially all of the assets of the Company. The Company accessed funds from the secured revolving line of credit during the year, but has no outstanding balance at September 30, 2022. The Company's total borrowing availability, based on eligible accounts receivables at September 30, 2022, was $25.0 million. As part of the secured revolving line of credit, the lenders agreed to a sublimit of $5 million for letters of credit for the account of the Company, subject to applicable procedures. The secured revolving line of credit has a maturity date of September 30, 2025 and is subject to loan covenants as described above. The Company is fully compliant with those covenants.

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- Definition The entire disclosure for cash and cash equivalent footnotes, which may include the types of deposits and money market instruments, applicable carrying amounts, restricted amounts and compensating balance arrangements. Cash and equivalents include: (1) currency on hand (2) demand deposits with banks or financial institutions (3) other kinds of accounts that have the general characteristics of demand deposits (4) short-term, highly liquid investments that are both readily convertible to known amounts of cash and so near their maturity that they present insignificant risk of changes in value because of changes in interest rates. Generally, only investments maturing within three months from the date of acquisition qualify. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02(1)) -URI https://asc.fasb.org/extlink&oid=120391452&loc=d3e13212-122682 + Details
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