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Long-term Debt
12 Months Ended
Dec. 31, 2021
Debt Disclosure [Abstract]  
Long-term Debt

8. Long-term Debt

Our Long-term Debt consisted of the following:

December 31, 

(in thousands)

2021

    

2020

Term Loan Facility due October 1, 2023

$

135,883

$

130,000

Revolving ABL Credit Facility due October 1, 2023

 

6,300

 

8

PPP Loan

 

 

10,000

Finance lease obligations

 

5,769

 

7,921

 

147,952

 

147,929

Less: current portion of PPP Loan

 

 

(4,286)

Less: current portion of finance leases

 

(4,464)

 

(3,351)

Less: Term Loan Facility deferred financing costs

 

(1,748)

 

(2,659)

Long-term debt

$

141,740

$

137,633

Presented below is a schedule of the principal repayment requirements of long-term debt by fiscal year as of December 31, 2021:

(in thousands)

    

2022

    

2023

    

2024

    

Thereafter

    

Total

Term Loan Facility

$

$

135,883

$

$

$

135,883

Revolving ABL Credit Facility

 

 

6,300

 

 

 

6,300

Total

$

$

142,183

$

$

$

142,183

Future payments of finance leases are included in Note 5 “Leases.”

Credit Facilities

On October 1, 2018, we entered into a term loan Credit Agreement (the “Term Loan Credit Agreement”) for an initial term loan in an aggregate principal amount of $130.0 million, (the “Term Loan Facility”) and (b) a delayed draw term loan facility in an aggregate principal amount of up to $15.0 million (the “DDTL Facility”, and together with the Term Loan Facility, the “Term Facilities”). The Term Facilities have a maturity date of October 1, 2023, at which time all outstanding principal under the Term Facilities and other obligations become due and payable in full. The Term Loan Credit Agreement balance was $135.9 million at December 31, 2021 and increased to $139.1 million on January 1, 2022. As of December 31, 2021 the DDTL Facility commitment was $11.9 million and decreased to $8.7 million on January 1, 2022.

At our election, interest under the Term Loan Facility is determined by reference at our option to either (i) a “base rate” equal to the higher of (a) the federal funds effective rate plus 0.05%, (b) the London Interbank Offered Rate (“LIBOR”) with an interest period of one month, plus 1.0%, and (c) the rate of interest as publicly quoted from time to time by the Wall Street Journal as the “prime rate” in the United States; plus an applicable margin of 6.5%, or (ii) a “LIBOR rate” equal to LIBOR with an interest period of one month, plus an applicable margin of 7.5%.

The Term Loan Credit Agreement contains financial covenants, including a liquidity covenant of $10.0 million and a springing fixed charge coverage ratio covenant of 1:1 that is tested when availability under the ABL Credit Facility (defined below) and the DDTL Facility is below $5.0 million at any time that a DDTL Facility loan is outstanding. The Term Loan Credit Agreement also contains other customary affirmative and negative covenants, including limitations on indebtedness, liens, fundamental changes, asset dispositions, restricted payments, investments and transactions with affiliates. The Term Loan Credit Agreement also provides for customary events of default, including breaches of material covenants, defaults under the ABL Credit Facility or other material agreements for indebtedness, and a change of control. We are in compliance with our covenants as of December 31, 2021.

The obligations under the Term Loan Credit Agreement are secured by a first priority lien on collateral (the “Term Priority Collateral”) other than accounts receivable, deposit accounts and other related collateral pledged as first priority collateral (“Priority Collateral”) under the ABL Credit Facility (defined below) and a second priority lien on such Priority Collateral, and are unconditionally guaranteed by all of our current and future direct and indirect subsidiaries. MSD PCOF Partners IV, LLC (an affiliate of MSD Partners, L.P. “MSD Partners”) is the lender of our $130.0 million Term Loan Facility.

In June 2020, we revised our Term Loan Credit Agreement to elect to pay accrued and unpaid interest, solely during one three-consecutive-month period immediately following such notice, in-kind (the “PIK Amount”). We agreed to pay an additional amount equal to 0.75% of the aggregate principal amount of the loans under the Term Loan Credit Agreement plus all PIK Amounts, if any, that are added to such principal amount being repaid or prepaid on either the maturity date or upon the occurrence of an acceleration of obligations under the Term Loan Credit Agreement. As such, the additional amount, approximately $1.0 million, was recorded as a direct deduction from the face amount of the Term Loan Facility and as a long-term payable on our consolidated balance sheets. The additional amount is amortized as interest expense over the term of the Term Loan Facility. On April 1, 2021, we elected to pay in-kind the $2.8 million interest payment due under our Term Loan, which increased our Term Loan balance accordingly. In September 2021, we amended our Term Loan Credit Agreement to permit us, subject to required prior notice, to elect to pay accrued and unpaid interest due October 1, 2021, in-kind. The payment-in-kind is in lieu of exercising a drawdown under the DDTL Facility under the Term Loan Credit Agreement, reducing the amount of the DDTL Facility commitment of $15 million by the amount of the accrued and unpaid interest due October 1, 2021. On October 1, 2021, we elected to pay in-kind the $3.1 million interest payment due under our Term Loan Credit Agreement. Subsequent to December 31, 2021, we elected to pay in-kind $3.2 million of interest due on January 1, 2022, which will draw down our remaining $11.9 million DDTL Facility and increase our Term Loan Facility balance accordingly.

Additionally, on October 1, 2018, we entered into a $40.0 million revolving Credit Agreement (the “ABL Credit Facility”), including availability for letters of credit in an aggregate amount at any time outstanding not to exceed $7.5 million. Availability under the ABL Credit Facility is subject to a borrowing base calculated based on 85% of the net amount of our eligible accounts receivable, minus reserves. The ABL Credit Facility has a maturity date of the earlier of October 1, 2023 or the maturity date of the Term Loan Credit Agreement.

At our election, interest under the ABL Credit Facility is determined by reference at our option to either (i) a “base rate” equal to the higher of (a) the federal funds effective rate plus 0.05%, (b) LIBOR with an interest period of one month, plus 1.0%, and (c) the prime rate of Wells Fargo, plus in each case, an applicable base rate margin ranging from 1.0% to 1.5% based on quarterly availability, or (ii) a revolving loan rate equal to LIBOR for the applicable interest period plus an applicable LIBOR margin ranging from 2.0% to 2.5% based on quarterly availability. We also pay, on a quarterly basis, a commitment fee of 0.375% (or 0.25% at any time when revolver usage is greater than 50% of the maximum credit) per annum on the unused portion of the ABL Credit Facility commitment.

The ABL Credit Facility contains a springing fixed charge coverage ratio covenant of 1:1 that is tested when availability is less than 10% of the maximum credit. The ABL Credit Facility also contains other customary affirmative and negative covenants, including limitations on indebtedness, liens, fundamental changes, asset dispositions, restricted payments, investments and transactions with affiliates. The ABL Credit Facility also provides for customary events of default, including breaches of material covenants, defaults under the Term Loan Credit Agreement or other material agreements for indebtedness, and a change of control. We are in compliance with our financial covenants as of December 31, 2021.

The obligations under the ABL Credit Facility are secured by a first priority lien on Priority Collateral, which includes all accounts receivable and deposit accounts, and a second priority lien on the Term Priority Collateral, and are unconditionally guaranteed by all of our current and future direct and indirect subsidiaries. As of December 31, 2021, the weighted-average interest rate on our borrowings was 8.81%.  At December 31, 2021, the borrowing base under our ABL Credit Facility was $17.8 million, and we had $11.3 million of availability remaining of our $40.0 million commitment on that date.

On April 27, 2020, we entered into an unsecured loan in the aggregate principal amount of $10.0 million (the “PPP Loan”) pursuant to the Paycheck Protection Program (the “PPP”), sponsored by the Small Business Administration (the “SBA”) as guarantor of loans under the PPP. The PPP was part of the CARES Act, and it provided loans to qualifying businesses in a maximum amount equal to the lesser of $10.0 million and 2.5 times the average monthly payroll expenses of the qualifying business. The proceeds of the loan could only be used for payroll costs, rent, utilities, mortgage interests, and interest on other pre-existing indebtedness (the “permissible purposes”) during the covered period that ended on or about October 13, 2020. Interest on the PPP loan was equal to 1.0% per annum. All or part of the loan was forgivable based upon the level of permissible expenses incurred during the covered period and changes to the Company’s headcount during the covered period to headcount during the period from January 1, 2020 to February 15, 2020. In the third quarter of 2021, we received notice from the SBA that our loan was forgiven and paid in full. The loan is considered an extinguishment of debt and is recorded as “Gain on extinguishment of debt” in our Statements of Operations. We have not accrued any liability associated with the risk of an adverse SBA review.