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Debt | 6 Months Ended
--- | ---
Jun. 30, 2025
Debt Disclosure [Abstract] |
Debt | Note 8 – Debt Borrowings were comprised of the following:
|  | June 30, 2025 |  |  | December 31, 2024 |
Revolving credit facility |  | $ | 49,188 |  |  | $ | 56,000 |
Sale-leaseback financing obligations |  |  | 45,895 |  |  |  | 45,451 |
Equipment financing facility |  |  | 15,730 |  |  |  | 16,782 |
Equipment Term Notes |  |  | 13,500 |  |  |  | — |
Industrial Revenue Bonds |  |  | 9,191 |  |  |  | 9,191 |
Finance lease liabilities |  |  | 1,108 |  |  |  | 1,156 |
Outstanding borrowings |  |  | 134,612 |  |  |  | 128,580 |
Debt – current portion |  |  | (18,717 | ) |  |  | (12,186 | )
Long-term debt |  | $ | 115,895 |  |  | $ | 116,394 |
The current portion of debt includes primarily the Industrial Revenue Bonds (“IRBs”), swing loans under the revolving credit facility and, effective June 30, 2025, principal payments due under the Equipment Term Notes during the next 12 months. Although the IRBs begin to become due in late 2027, the bonds can be put back to the Corporation on short notice if they are not able to be remarketed; accordingly, the IRBs are classified as a current liability, although the Corporation considers the likelihood of the bonds being put back to the Corporation to be remote. By definition, swing loans are temporary advances under the revolving credit facility and short-term in nature. Accordingly, swing loans are classified as a current liability until the amount is either repaid, as customers remit payments, or, if elected by the Corporation, refinanced as a longer-term loan under the revolving credit facility. The swing loan balance outstanding at June 30, 2025 was $4,687. No swing loans were outstanding as of December 31, 2024. Revolving Credit Facility On June 25, 2025, the Corporation entered into a Second Amended and Restated Revolving Credit, Term Loan and Security Agreement (the “Credit Agreement”), amending its previous revolving credit and security agreement. The Credit Agreement provides for a $100,000 senior secured asset-based revolving credit facility (the “Revolving Credit Facility”) and $13,500 under the Equipment Term Notes (see below). The Revolving Credit Facility can be increased to $125,000 at the option of the Corporation and with the approval of the lenders and provides sublimits for letters of credit not to exceed $40,000 and European borrowings not to exceed $30,000. Borrowings under the Revolving Credit Facility will bear interest at the Secured Overnight Financing Rate (“SOFR”) plus an applicable margin ranging between 2.00% and 2.50%. The maturity date for the Revolving Credit Facility is June 25, 2030 and, subject to other terms and conditions of the Credit Agreement, would become due on that date. As of June 30, 2025, the Corporation had outstanding borrowings under the Revolving Credit Facility of $49,188. The average interest rate under the Revolving Credit Facility and the previous revolving credit and security agreement approximated 7.21% and 7.15% for the three and six months ended June 30, 2025, respectively, and 8.22% for each of the three and six months ended June 30, 2024. The Corporation also utilizes a portion of the Revolving Credit Facility for letters of credit (Note 10). As of June 30, 2025, remaining availability under the Revolving Credit Facility approximated $34,190, net of standard availability reserves. Borrowings outstanding under the Revolving Credit Facility are collateralized by a first priority perfected security interest in the accounts receivable and inventories. The Credit Agreement contains customary affirmative and negative covenants and limitations, including, but not limited to, investments in certain subsidiaries, payment of dividends, incurrence of additional indebtedness and guaranties, and acquisitions and divestitures. In addition, the Corporation must maintain a certain level of excess availability or otherwise maintain a minimum Fixed Charge Coverage Ratio (as defined in the Credit Agreement) of not less than 1.05 to 1.00. The Corporation was in compliance with the applicable bank covenants as of June 30, 2025. Sale-Leaseback Financing Obligations In September 2018, Union Electric Steel Corporation (“UES”), an indirect subsidiary of the Corporation, completed a sale-leaseback financing transaction with Store Capital Acquisitions, LLC (“STORE”) for certain of its real property, including its manufacturing facilities in Valparaiso, Indiana and Burgettstown, Pennsylvania, and its manufacturing facility and corporate headquarters located in Carnegie, Pennsylvania (the “UES Properties”). In August 2022, Air & Liquid Systems Corporation (“Air & Liquid”), a wholly owned subsidiary of the Corporation, completed a sale-leaseback financing transaction with STORE for certain of its real property, including its manufacturing facilities in Lynchburg, Virginia and Amherst, Virginia. In October 2022, Air & Liquid completed a sale-leaseback financing transaction with STORE for its real property, including its manufacturing facility, located in North Tonawanda, New York (collectively with the Virginia properties, the “ALP Properties”). In connection with the August 2022 sale-leaseback financing transaction, and as modified by the October 2022 sale-leaseback financing transaction, UES and STORE entered into a Second Amended and Restated Master Lease Agreement (the “Restated Lease”), which amended and restated the existing lease agreement between UES and STORE. Pursuant to the Restated Lease, UES will lease the ALP Properties and the UES Properties (collectively, the “Properties”), subject to the terms and conditions of the Restated Lease, and UES will sublease the ALP Properties to Air & Liquid on the same terms as the Restated Lease. The Restated Lease provides for an initial term of 20 years; however, UES may extend the lease for the Properties for four successive periods of five years each. If fully extended, the Restated Lease would expire in August 2062. UES also has the option to repurchase the Properties, which it may, and intends to, exercise in 2032, for a price equal to the greater of (i) the Fair Market Value of the Properties or (ii) 115% of Lessor’s Total Investment, with such terms defined in the Restated Lease. In August 2022, in connection with the Restated Lease, UES and STORE entered into a Disbursement Agreement pursuant to which STORE agreed to provide up to $2,500 to UES towards certain leasehold improvements in the Carnegie, Pennsylvania manufacturing facility. In June 2023, UES received $2,500 of proceeds from the Disbursement Agreement. The annual payments for the Properties (the “Base Annual Rent”) have been adjusted to repay the $2,500 over the balance of the initial term of the Restated Lease of 20 years. Advances under the Disbursement Agreement are secured by a first priority security interest in the leasehold improvements. At June 30, 2025, the Base Annual Rent, including the Disbursement Agreement, is equal to $3,719, payabl e in equal monthly installments. Each October through 2052, the Base Annual Rent will increase by an amount equal to the lesser of 2.04% or 1.25 times the change in the consumer price index, as defined in the Restated Lease. The Base Annual Rent during the remaining ten years of the Restated Lease will equal the Fair Market Rent, as defined in the Restated Lease. The Restated Lease and the Disbursement Agreement contain certain representations, warranties, covenants, obligations, conditions, indemnification provisions, and termination provisions customary for those types of agreements. The Corporation was in compliance with the applicable covenants as of June 30, 2025. The effective interest rate appro ximated 8.26% for each of the three and six months ended June 30, 2025 and 8.24% for each of the three and six months ended June 30, 2024. Equipment Financing Facility In September 2022, UES and Clarus Capital Funding I, LLC (“Clarus”) entered into a Master Loan and Security Agreement, pursuant to which UES could borrow up to $20,000 to finance certain equipment purchases associated with a capital program at certain of the Corporation’s FCEP lo cations. Each borrowing constitutes a secured loan transaction (each, a “Term Note”). Each Term Note has a term of 84 months in arrears fully amortizing, commencing on the date of the Term Note, and is secured by a first priority security interest in and to all of UES’ rights, title and interests in the underlying equipment. Inter est on each Term Note accrues at an annual fixed rate ranging between 8.40% and 9.22%. The effective interest rates approximated 8.66% for each of the three and six months ended June 30, 2025 and 8.65% and 8.58% for the three and six months ended June 30, 2025 and 2024, respectively. As of June 30, 2025, monthly payments of principal and interest approximate $293 and continue through mid-2031. Equipment Term Notes Under the Credit Agreement, the Corporation may borrow up to $13,500 pursuant to senior secured term notes (the “Equipment Term Notes”). On the date of closing, $13,500 was advanced as Equipment Term Notes to the Corporation with such proceeds used to paydown borrowings under the Revolving Credit Facility. The Equipment Term Notes are payable in equal monthly installments of principal and interest of $161 commencing August 1, 2025, continuing on the first day of each month through June 2030, followed by sixtieth payment of all unpaid principal, accrued and unpaid interest and all unpaid fees. Borrowings unde r the Equipment Term Notes will bear interest at SOFR plus an applicable margin ranging between 3.00% and 3.50%. The Equipment Term Notes are secured by certain fixed assets of the Corporation that secured the previous credit facility. On June 30, 2025, $1,768 of the $13,500 outstanding principal was classified as current on the condensed consolidated balance sheet. The interest rate at June 30, 2025 was 7.93%. Industrial Revenue Bonds (“IRBs”) The Corporation has two IRBs outstanding: (i) $7,116 taxable IRB maturing in 2027, interest at a floating rate which averaged 4.41% and 8.27% for the three months ended June 30, 2025 and 2024, respectively, and 4.42% an d 6.81% for the six months ended June 30, 2025 and 2024, respectively, and (ii) $2,075 tax-exempt IRB maturing in 2029, interest at a floating rate which average d 3.44% and 6.91% for the three months ended June 30, 2025 and 2024, respectively, and 3.21% and 5.31% for the six months ended June 30, 2025 and 2024, respectively. The IRBs are secured by letters of credit of equivalent amounts and are remarketed periodically at which time the interest rates are reset. If the IRBs are not able to be remarketed, although considered a remote possibility by the Corporation, the bondholders can seek reimbursement immediately from the letters of credit; accordingly, the IRBs are recorded as current debt on the condensed consolidated balance sheets.

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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 815 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 8A -Publisher FASB -URI https://asc.fasb.org/1943274/2147480434/815-10-50-8A Reference 2: http://www.xbrl.org/2003/role/disclosureRef 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