Annual report [Section 13 and 15(d), not S-K Item 405]

Debt

v3.25.0.1
Debt
 12 Months Ended
Dec. 31, 2024
Debt Disclosure [Abstract]  
Debt Debt
Senior Secured Credit Facility
On September 24, 2021, certain subsidiaries of the Company entered into a senior secured credit facility comprised of a $100.0 million term loan and a $50.0 million revolving line of credit, as well as an option for additional term loan of up to $50.0 million through an accordion feature. The senior secured credit facility also allows for the issuance of one or more letters of credit from time to time by syndicate lenders. Effective April 4, 2023, the Company modified its senior secured credit facility under existing contractual provisions to yield interest from interest rates based on Term SOFR, as defined in the credit agreement for the senior secured credit facility (the “Credit Agreement”). Key terms and conditions of each facility were as follows:
•The $100.0 million term loan matures five years after closing (September 2026) and requires the Company to make amortized annual payments of 5.0% during the first and second years, 7.5% during the third and fourth years and 10.0% during the fifth year with the balance of the loan due at maturity. Borrowings under the term loan accrue interest at Term SOFR plus an applicable margin dependent upon the Company’s net leverage ratio, as defined in the Credit Agreement. The highest interest rate under the agreement occurs at a net leverage ratio of greater than 2.75x, yielding an interest rate of Term SOFR plus 3.25%.
•The $50.0 million revolving line of credit, which matures five years after closing (September 2026), accrues interest at Term SOFR plus an applicable margin dependent upon the Company’s net leverage ratio. The highest interest rate under the Credit Agreement occurs at a net leverage ratio of greater than 2.75x, yielding an interest rate of Term SOFR plus 3.25%. Additionally, a margin fee of 25-35 basis points is assessed on unused amounts under the revolving line of credit, subject to adjustment based on the Company’s net leverage ratio.
•The $50.0 million accordion feature allows the Company to enter into additional term loan borrowings at terms to be agreed upon at the time of issuance, but on substantially the same basis as the original term loan, which includes the requirement to make amortized annual payments at the same cadence as that of the original term loan.
The senior secured credit facility requires that the Company maintain a maximum total net leverage ratio of 3.50 to 1.00 and maintain a minimum fixed charge coverage ratio of 1.25 to 1.00, each as of the last day of any fiscal quarter. In the event that the Company fails to comply with the financial covenant, the Company will have the option to make certain equity contributions, directly or indirectly, to cure any non-compliance with such covenant, subject to certain other conditions and limitations. The Company is required to make a mandatory prepayment as a percentage of excess cash flows, as defined in the Credit Agreement, in the period based on the Company triggering certain net debt leverage ratios. Specifically, a mandatory prepayment of 50% of excess cash flows is required if the Company’s net leverage ratio exceeds 2.75x, and a mandatory prepayment of 25% of excess cash flows is required if the Company’s net leverage ratio is greater than or equal to 2.25x. As of December 31, 2024, the Company was in compliance with all financial debt covenants.
The Company incurred $2.7 million of debt issuance costs in relation to the senior secured credit facility. Of this, $0.9 million related to the revolving credit facility and was capitalized and included in prepaid and other current assets as deferred financing costs to be amortized over the life of the facility, or 5 years. The remaining $1.8 million of debt issuance costs related to the term loan and is presented net of outstanding debt in long term debt on the balance sheet. Debt issuance costs are amortized over the life of the outstanding debt, using the effective interest rate method.
During 2024, the Company borrowed $49.5 million under its revolving line of credit, with final payoff due on September 24, 2026, and voluntarily repaid $26.2 million of the amounts outstanding under its revolving line of credit.
As of December 31, 2024, the all-in rate (Term SOFR plus the applicable margin) for the Company’s term loan and borrowings under the revolving line of credit was 7.68%.
Total Debt and Interest
Outstanding debt consisted of the following:
December 31,
2024 2023
Term loan
 $ 89,050  $ 94,450 
Revolving credit facility
 23,300  — 
Capitalized debt issuance costs
 (639) (1,056)
Total debt 111,711  93,394 
Less: current portion
 (6,300) (3,300)
Total long-term debt
 $ 105,411  $ 90,094 
Interest expense, which included the amortization of debt issuance costs, totaled $10.3 million, $11.2 million and $7.0 million for the years ended December 31, 2024, 2023 and 2022, respectively. Additionally, as of December 31, 2024, the Company had $2.2 million of outstanding letters of credit. As of December 31, 2024, the carrying value of the Company’s total debt was $111.7 million, while the fair value of the Company’s total debt, valued using level 2 inputs, was $103.0 million.
As of December 31, 2024, the maturities of principal amounts of our total debt obligations were as follows:
2025 $ 6,300
2026 106,050
Total
 $ 112,350