Quarterly report pursuant to Section 13 or 15(d)

Debt

v3.24.3
Debt
 9 Months Ended
Sep. 30, 2024
Debt Disclosure [Abstract]  
Debt Debt
Senior Secured Credit Facility
On September 24, 2021, in connection with the closing of the Company’s initial public offering (“IPO”), 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, in 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 our 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, accrues interest at Term SOFR plus an applicable margin dependent upon our 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 our 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 September 30, 2024, the Company was in compliance with all debt covenants.
During the nine months ended September 30, 2024, the Company borrowed $34.5 million under its revolving line of credit, with final payoff due on September 24, 2026, and voluntarily repaid $13.0 million of the amounts outstanding under its revolving line of credit.
As of September 30, 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 8.21%.
Total Debt and Interest
Outstanding debt consisted of the following:
September 30,
2024		 December 31,
2023
Term loan $ 91,150  $ 94,450 
Revolving credit facility 21,500  — 
Capitalized debt issuance costs
 (740) (1,056)
Total debt 111,910  93,394 
Less: current portion
 (6,300) (3,300)
Total long-term debt
 $ 105,610  $ 90,094 
Interest expense, which included the amortization of debt issuance costs, totaled $2.7 million and $2.8 million for the three months ended September 30, 2024 and 2023, respectively, and totaled $7.7 million and $8.5 million for the nine months ended September 30, 2024 and 2023, respectively. Additionally, as of September 30, 2024, the Company had $2.2 million of outstanding letters of credit. As of September 30, 2024, the carrying value of the Company’s total debt was $111.9 million, while the fair value of the Company’s total debt, valued using level 2 inputs, was $103.3 million.