Long-term Debt And Line of Credit

12 Months Ended

Dec. 31, 2021

Debt Disclosure [Abstract]

Long-term Debt and Line of Credit

11.Long-term Debt and Line of Credit

The Company entered into an amended syndicated credit agreement (the “Credit Agreement” also known as the “Fourth Amendment”) on July 31, 2018 with Regions Bank, as administrative agent and collateral agent, and the following co-syndication agents: Bank of America, N.A., BOKF, NA dba Bank of Texas, KeyBank National Association, NBH Bank, IBERIABANK, Trustmark National Bank, First Tennessee Bank NA, and Branch Banking and Trust Company. The Credit Agreement was subsequently amended in March 2019 (the “Fifth Amendment”), May 2019 (the “Sixth Amendment”) June 2020 (the “Seventh Amendment”) and October 2020 (the “Eighth Amendment”). The company incurred debt issuance costs related to the initial Credit Agreement and several of the subsequent amendments. The Credit Facility matures on July 31, 2023.

The Credit Agreement, which may be amended from time to time, provides for borrowings under a revolving line of credit and a term loan (together, the “Credit Facility”). The Credit Facility is guaranteed by the subsidiaries of the Company, secured by the assets of the Company, including stock held in its subsidiaries, and may be used to finance general corporate and working capital purposes, to finance capital expenditures, to refinance existing indebtedness, to finance permitted acquisitions and associated fees, and to pay for all related expenses to the Credit Facility. Interest is due and is computed based on the designation of the loan, with the option of a Base Rate Loan (the base rate plus the Applicable Margin), or an Adjusted LIBOR Rate Loan (the adjusted LIBOR rate plus the Applicable Margin). Interest is due on the last day of each quarter end for Base Rate Loans and at the end of the LIBOR rate period for Adjusted LIBOR Rate Loans. Principal balances drawn under the Credit Facility may be prepaid at any time, in whole or in part, without premium or penalty. Amounts repaid under the revolving line of credit may be re-borrowed.

Total debt issuance costs for the Fourth Amendment which included underwriter fees, legal fees and syndication fees were approximately $0.9 million and were capitalized as non-current deferred charges and scheduled for amortization using the effective interest rate method over the duration of the loan. The Company incurred additional debt issuance costs of approximately $0.6 million and $0.9 million respectively for the Fifth and Sixth Amendments. With the execution of the aforementioned Sixth Amendment, $50.0 million of the existing revolving line of credit was modified and accounted for under guidelines of ASC 470-50, Debt, Modifications and Extinguishments, and a pro-rated portion of unamortized debt issuance costs of approximately $0.4 million was recognized as interest expense as of May 2019. The then remaining debt issuance costs of approximately $0.9 million related to the Fourth, Fifth, and Sixth Amendments were scheduled to be amortized over the duration of the term loan, which coincides with the term of the Credit Facility.

On June 8, 2020, the Company entered into a new syndicated credit agreement (the “364-Day Revolving Credit Facility”) with Regions Bank, as administrative agent and collateral agent, and the following co-syndication agents: Bank of

America, N.A. and BOKF, NA dba Bank of Texas. Concurrent with this the Company executed an amendment to the Credit Agreement with its existing lenders (“also known as the “Seventh Amendment”) for the sole intent and outcome of executing the 364-Day Revolving Credit Facility.

The 364-Day Revolving Credit Facility provided for borrowings of up to $20 million under a new revolving line of credit. No funds were ever drawn on the 364-Day Revolving Credit Facility. The 364-Day Revolving Credit Facility matured on June 7, 2021. 

Effective, October 9, 2020, the Company entered into the Eighth Amendment to the Credit Agreement") , with Regions Bank, as Administrative Agent and Collateral Agent and Bank of America, N.A., BOKF, NA dba Bank of Texas, Iberiabank, NBH Bank, Truist Bank, and Trustmark National Bank, as Lenders. The Eighth Amendment provides for administrative revisions to the Credit Agreement, including changes to repayment requirements for involuntary asset dispositions and changes to the timing of repayment for voluntary asset dispositions. There were no debt issuance costs incurred with respect to the Eighth Amendment.

The yearly weighted average interest rate for the Credit Facility as of December 31, 2021 was 2.60%.

The Company’s obligations under debt arrangements consisted of the following:

	December 31, 2021						December 31, 2020
			Debt Issuance						Debt Issuance
	Principal		Costs(1)		Total		Principal		Costs(1)		Total
Revolving line of credit	$	39,000	$	—	$	39,000	$	—	$	—	$	—
Term loan - current		—		—		—		4,500		(156)		4,344
Other debt		141		—		141		—		—		—
Total current debt		39,141		—		39,141		4,500		(156)		4,344
Revolving line of credit		—		—		—		5,000		(174)		4,826
Term loan - long-term		—		—		—		25,586		(889)		24,697
Other debt		259		—		259		—		—		—
Total long-term debt		259		—		259		30,586		(1,063)		29,523
Total debt	$	39,400	$	—	$	39,400	$	35,086	$	(1,219)	$	33,867

(1) Total debt issuance costs, include underwriter fees, legal fees and syndication fees and fees related to the execution of the Fourth, Fifth, Sixth, Seventh and Eighth Amendments to the Credit Agreement.

Provisions of the revolving line of credit

The Company has a maximum borrowing availability under the revolving line of credit and swingline loans (as defined in the Credit Agreement) of $50.0 million. There is a letter of credit sublimit that is equal to the lesser of $20.0 million and the aggregate unused amount of the revolving commitments then in effect. There is also a swingline sublimit equal to the lesser of $5.0 million and the aggregate unused amount of the revolving commitments then in effect.

Revolving loans may be designated as Base Rate Loan or Adjusted LIBOR Rate Loans, at the Company’s request, and must be drawn in an aggregate minimum amount of $1.0 million and integral multiples of $250,000 in excess of that amount. Swingline loans must be drawn in an aggregate minimum amount of $250,000 and integral multiples of $50,000 in excess of that amount. The Company may convert, change, or modify such designations from time to time.

The Company is subject to a commitment fee for the unused portion of the maximum borrowing availability under the revolving line of credit. The commitment fee, which is due quarterly in arrears, is equal to the Applicable Margin of the actual daily amount by which the Aggregate Revolving Commitments exceeds the Total Revolving Outstanding. The revolving line of credit termination date is the earlier of the Credit Facility termination date, July 31, 2023, or the date the outstanding balance is permanently reduced to zero, in accordance with the terms of the amended Credit Facility.

The maturity date for amounts drawn under the revolving line of credit is the earlier of the Facility termination date of July 31, 2023, or the date the outstanding balance is permanently reduced to zero.

As of December 31, 2021, the Company had $39.0 million of borrowings under the revolving line of credit. There were $1.7 million in outstanding letters of credit as of December 31, 2021, which reduced the maximum borrowing availability on the revolving line of credit to $9.3 million. During the year ended December 31, 2021, the Company drew down $53.0

million for general corporate purposes and made payments of $19.0 million on the revolving line of credit which resulted in a net increase of $34.0 million.

Provisions of the term loan

The original principal amount of $60.0 million for the term loan commitment was paid off in quarterly installment payments (as stated in the Credit Agreement). During the quarter ended June 30, 2021, the term loan component of the Credit Facility was fully extinguished, in part using proceeds of the sale of property in Tampa, Florida (see Note 6). The extinguishment of the term loan reduced the Company’s exposure to variability in interest rates and eliminated future loan amortization payment commitments. Concurrent with extinguishing the term loan, the Company canceled the remaining open position on its interest rate swap, resulting in a $1.3 million loss on the mark to market value of the swap at the date of termination. The $1.3 million was paid to the counterparty, cleared from the balance sheet as an interest rate swap liability, removed from Other Comprehensive Income and charged to interest expense during the quarter ended June 30, 2021. Further, the remaining $0.8 million of unamortized deferred debt issuance costs were charged to interest expense related to the early extinguishment of the term loan. There were no penalties incurred related to early payment of the term loan.

Other debt

The Company entered into a debt agreement with De Lage Landen Financial Services, Inc. for the purpose of financing a piece of equipment purchased. As of December 31, 2021, the carrying value of this debt is $0.4 million. The agreement is secured by the financed equipment asset and the debt is included as a component of current debt and long-term debt on the Consolidated Balance Sheets.

Financial covenants

Restrictive financial covenants under the Credit Facility include:

• A minimum consolidated EBITDA requirement to not be less than the following during each noted period:

- Fiscal Quarter Ending March 31, 2022 - $2.6 million.

- Fiscal Quarter Ending June 30, 2022 - $7.7 million on a year-to-date basis.

• A consolidated Leverage Ratio to not exceed the following during each noted period:

- Fiscal Quarter Ending September 30, 2022 and each Fiscal Quarter thereafter, to not exceed 3.00 to 1.00.

• A consolidated Fixed Charge Coverage Ratio to not be less than the following during each noted period:

- Fiscal Quarter Ending December 31, 2022 and each Fiscal Quarter thereafter, to not be less than 1.25 to 1.00.

In addition, the Credit Facility contains events of default that are usual and customary for similar arrangements, including non-payment of principal, interest or fees; breaches of representations and warranties that are not timely cured; violation of covenants; bankruptcy and insolvency events; and events constituting a change of control.

During the fourth quarter of 2021, the Company initiated discussions with the lead bank due to concerns it would not be in compliance with financial covenants.  The Company executed the Ninth Amendment during March 2022. With the execution of the aforementioned amendment, the Company obtained a waiver on the financial covenants as of December 31, 2021.

For further details of the Ninth Amendment, see Note 20 in the Notes to the Financial Statements.

Derivative Financial Instruments

On September 16, 2015, the Company entered into a series of receive-variable, pay-fixed interest rate swaps to hedge the variability in the interest payments on 50% of the aggregate principal amount of the Regions Term Loan outstanding, beginning with a notional amount of $67.5 million. There was a total of five sequential interest rate swaps to achieve the hedged position and each year on August 31, with the exception of the final swap, the existing interest rate swap was scheduled to expire and be immediately replaced with a new interest rate swap until the expiration of the final swap on July 31, 2020. On December 6, 2018, the Company entered into a sixth receive-variable, pay-fixed interest rate swap to hedge the variability of interest payments. The sixth swap began with a notional amount of $27.0 million on July 31, 2020 and hedged the variability in the interest payments on the aggregate scheduled principal amount of the Regions Term Loan outstanding. The sixth swap was scheduled to expire on July 31, 2023. At inception, these interest rate swaps were

designated as cash flow hedges for hedge accounting, and as such, the effective portion of unrealized changes in market value were recorded in other comprehensive income (loss) and reclassified into earnings during the period in which the hedged forecasted transaction affects earnings. Gains and losses from hedge ineffectiveness were recognized in current earnings.

Upon fully extinguishing the Term Loan during the quarter ended June 30, 2021, the Company canceled the remaining term of the sixth swap and no longer owns derivative financial instruments.