Long-Term Debt |
3 Months Ended |
|---|---|
Mar. 31, 2024 | |
| Debt Disclosure [Abstract] | |
| Long-Term Debt | Long-Term Debt Revolving Credit Facility
On July 30, 2021, the Company entered into a secured $35.0 million revolving credit facility with JPMorgan Chase Bank, N.A. (the “Credit Facility”). The Credit Facility could be increased up to an additional $25.0 million subject to certain conditions and at the Company’s option if the lenders agreed to increase their commitments. The Credit Facility had a maturity date of July 30, 2024, unless the Company exercised its option to voluntarily and permanently reduce all of the commitments before the maturity date.
On June 30, 2023, the Company entered into Amendment No. 1 (the “Amendment”) to the Credit Facility with JPMorgan Chase Bank, N.A. The Amendment replaced the London Interbank Offered Rate (“LIBOR”) interest rate with an Adjusted Term Secured Overnight Financing Rate (“SOFR”) interest rate.
On September 27, 2023, the Company entered into an Amended and Restated Credit Agreement (the “A&R Credit Facility”) with JPMorgan Chase Bank, N.A. to, among other things, (1) extend the maturity date of the credit facility to September 27, 2026 from July 30, 2024, (2) revise the adjustment applicable to the Adjusted Term SOFR rate as well as the commitment fee and (3) reduce the aggregate principal commitment to $25.0 million which could be increased up to an additional $35.0 million at the Company’s option if the lenders agree to increase their commitments.
The A&R Credit Facility contains representations and warranties, affirmative and negative covenants and events of default that the Company considers customary for an agreement of this type. The agreement requires the Company to be in compliance with a minimum fixed charge coverage ratio of no less than 1.25 to 1.00, and a maximum consolidated total lease adjusted leverage ratio of no more than 4.00 to 1.00. The A&R Credit Facility also has certain restrictions on the payment of dividends and distributions. Under the A&R Credit Facility, the Company may declare and make dividend payments so long as (i) no default or event of default has occurred and is continuing or would result therefrom and (ii) immediately after giving effect to any such dividend payment, on a pro forma basis, the consolidated total lease adjusted leverage ratio does not exceed 3.50 to 1.00.
Borrowings under the A&R Credit Facility accrue interest at a per annum rate equal to, at the Company’s election, term secured overnight financing rate (“Term SOFR”) plus 0.10% (“Adjusted Term SOFR”), plus a margin of 1.5% to 2.0%, depending on the Company’s consolidated total lease adjusted leverage ratio, or a base rate determined according to the highest of (a) the prime rate, (b) the federal funds rate plus 0.5% or (c) Adjusted Term SOFR rate for a one-month period, plus 1.0%, plus a margin of 0.5% to 1.0%, depending on the Company’s consolidated total lease adjusted leverage ratio.
An unused commitment fee at a rate of 0.3% applies to unutilized borrowing capacity under the A&R Credit Facility.
The obligations under the Company’s A&R Credit Facility are guaranteed by certain subsidiaries of the Company and, subject to certain exceptions, secured by a continuing security interest in substantially all of the Company’s assets. As of March 31, 2024, the Company had no borrowings under the A&R Credit Facility, and was in compliance with all covenants under the A&R Credit Facility.
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