XML 29 R14.htm IDEA: XBRL DOCUMENT v3.24.1.u1
Long Term Debt, Net
 3 Months Ended
Mar. 31, 2024
Debt Disclosure [Abstract]  
Long Term Debt, Net Long Term Debt, Net
Citizens Credit Agreement
On January 19, 2024, the Company entered into a Credit Agreement (the “Citizens Credit Agreement”) with certain lenders party thereto, and Citizens Bank, N.A., as administrative agent (the “Agent”). The Citizens Credit Agreement provides for senior secured credit facilities in an aggregate principal amount of up to $95.0 million consisting of: (i) a $75.0 million senior secured revolving credit facility (the “Revolving Credit Facility”) with a $10.0 million letter of credit sublimit and a $10.0 million swingline loan sublimit, and (ii) a $20.0 million senior secured term loan facility (the “Term Loan Facility” and, together with the Revolving Credit Facility, the “Credit Facilities”). All obligations are required to be paid in full on January 19, 2029 (the “Maturity Date”). The Company has the option to obtain one or more incremental Term Loan Facilities and/or increase the commitments under the Revolving Credit Facility in an aggregate principal amount equal to the greater of (i) $50.0 million and (ii) 1.00 times the Company’s Consolidated EBITDA (as defined therein), each subject to the existing or any new lenders’ election to extend additional term loans or revolving commitments.
At the Company’s option, borrowings under the Citizens Credit Agreement (other than any swingline loan) will bear interest at a rate per annum equal to (i) the Alternate Base Rate, as defined therein, or (ii) a Term SOFR as defined therein, in each case plus an applicable margin ranging from 1.25% and 2.50% with respect to Alternate Base Rate borrowings and 2.25% and 3.50% for Term SOFR borrowings, plus a fallback provision of 0.1%. Swingline loans will bear interest at a rate per annum equal to one-month Term SOFR plus the applicable margin. The applicable margin will be determined based on the Company’s consolidated total net leverage ratio.
The Company is required to pay a quarterly commitment fee on any unused portion of the Revolving Credit Facility, letter of credit fees, and other customary fees to the Agent and the Lenders. The Term Loan Facility will amortize on a quarterly basis at 1.25% (for year one and two), 1.88% (for year three and four), and 2.5% (for year five) based on the aggregate principal amount outstanding under the Term Loan Facility, with the remainder due on the Maturity Date. The Company must make mandatory prepayments in connection with certain asset dispositions and casualty events, subject in each case to customary reinvestment rights. The Company may prepay borrowings under the Credit Facilities at any time, without premium or penalty, and may, at its option, reduce the aggregate unused commitments under the Revolving Credit Facility in whole or in part, in each case subject to the terms of the Credit Agreement. The Company must also comply with certain financial covenants, including a maximum total net leverage ratio and a minimum consolidated fixed charge coverage ratio, as well as other customary restrictive covenants.
On January 19, 2024, the Company borrowed $30.0 million under the Revolving Credit Facility and $20.0 million under the Term Loan Facility. Proceeds from the initial drawings under the Credit Facilities together with cash on hand were used to repay in full the $50.0 million principal amount and other outstanding obligations under the Company’s prior senior secured term loan with Hayfin (the “Hayfin Loan Agreement”) and to pay related fees, premiums, costs and expenses (collectively with the entry into the Citizens Credit Agreement and the initial borrowings thereunder, the “Debt Refinancing Transactions”). The Company recorded a loss on extinguishment of debt of $1.4 million. This amount is reflected as a part of interest expense, net on the unaudited condensed consolidated statement of operations for the three months ended March 31, 2024. The composition of the loss on extinguishment of debt was as follows (amounts in thousands):
January 19, 2024
Unamortized deferred financing costs
$781 
Unamortized original issue discount
120 
Prepayment premium
500 
Loss on extinguishment of debt
$1,401 
In addition, on February 27, 2024, the Company repaid the initial $30.0 million drawing under the Revolving Credit Facility and had no outstanding borrowings under this facility as of March 31, 2024. Deferred financing costs and original issue discount allocated to the Revolving Credit Facility are amortized straight-line through the expiration of the commitment term. The Revolving Credit Facility is currently subject to a commitment fee of 0.25% per annum of the amount undrawn, which is recognized as interest expense.
Original issue discount and deferred financing costs incurred as part of the Credit Facilities were allocated between the Term Loan Facility and the Revolving Credit Facility on the basis of the maximum potential principal outstanding permitted under the Citizens Credit Agreement. The allocation of the deferred financing costs and original issue discount between the Term Loan Facility and the Revolving Credit Facility were as follows (in thousands):
January 19, 2024
Term Loan Facility
Revolving Credit Facility
Total
Long term debt
Other assets
Original issue discount
$224 $839 $1,063 
Deferred financing
54 202 256 
The balances of the Term Loan Facility as of March 31, 2024 and the Hayfin Loan Agreement as of December 31, 2023 were as follows (in thousands):
March 31, 2024December 31, 2023
Current portion of long term debt
Long term debt, netCurrent portion of long term debtLong term debt, net
Outstanding principal$1,000 $18,750 $1,000 $49,000 
Deferred financing costs— (82)— (781)
Original issue discount— (215)— (120)
Long term debt, net$1,000 $18,453 $1,000 $48,099 
The Citizens Term Loan Facility bears interest at a rate per annum equal to (i) the Alternate Base Rate, as defined therein, or (ii) a Term SOFR as defined therein, in each case plus an applicable margin ranging from 1.25% and 2.50% with respect to Alternate Base Rate borrowings and 2.25% and 3.50% for Term SOFR borrowings, plus a fallback provision of 0.1%. The applicable margin is determined based on the Company’s consolidated total net leverage ratio. The Term Loan Facility carried an interest rate of 7.9% as of March 31, 2024. Interest expense related to the Term Loan Facility and the Hayfin Loan Agreement included in interest expense, net in the unaudited condensed consolidated statements of operations, was as follows (amounts in thousands):
Three Months Ended March 31,
20242023
Stated interest$661 $1,436 
Amortization of deferred financing costs29 105 
Accretion of original issue discount13 16 
Interest expense$703 $1,557 
Interest expense related to the Revolving Credit Facility included in interest expense, net in the unaudited condensed consolidated statements of operations, was as follows (amounts in thousands):
Three Months Ended March 31,
2024
Commitment fee
$30 
Amortization of deferred financing costs16 
Accretion of original issue discount42 
Interest expense$88 
A summary of principal payments due on the Term Loan Facility, by year, from March 31, 2024 through maturity are as follows (in thousands):
Year ending December 31,Principal
2024 (excluding the three months ended March 31, 2024)
$750 
2025
1,000 
2026
1,500 
2027
1,500 
2028
2,000 
Thereafter13,000 
Outstanding principal$19,750 
As of March 31, 2024, the fair value of the Term Loan Facility was $19.3 million. This valuation was calculated based on a series of Level 2 and Level 3 inputs, including a discount rate based on the credit risk spread of debt instruments of similar risk character in reference to U.S. Treasury instruments with similar maturities, with an incremental risk premium for risk factors specific to the Company. Fair value was calculated by discounting the remaining cash flows associated with the Term Loan Facility to March 31, 2024 using this discount rate.