Long-Term Debt and Bank Facility Borrowings

9 Months Ended

Jun. 30, 2022

Debt Disclosure [Abstract]

Long-Term Debt and Bank Facility Borrowings

11) Long-Term Debt and Bank Facility Borrowings

The Company’s debt is as follows (in thousands):

	June 30,				September 30,
	2022				2021
	Carrying Amount		Fair Value (a)		Carrying Amount		Fair Value (a)
Revolving Credit Facility Borrowings	$	129,510	$	129,510	$	8,618	$	8,618
Senior Secured Term Loan (b)		95,514		95,885		110,006		110,500
Total debt	$	225,024	$	225,395	$	118,624	$	119,118
Total short-term portion of debt (c)	$	71,895	$	71,895	$	26,239	$	26,239
Total long-term portion of debt (b), (c)	$	153,129	$	153,500	$	92,385	$	92,879

(a)The face amount of the Company’s variable rate long-term debt approximates fair value.

(b)Carrying amounts are net of unamortized debt issuance costs of $0.4 million as of June 30, 2022 and $0.5 million as of September 30, 2021.

(c)On July 6, 2022, the Company refinanced its five-year term loan and the revolving credit facility with the execution of the sixth amended and restated revolving credit facility agreement. (See Note 16—Subsequent Events). As of June 30, 2022, the Company has classified $69.1 million of its revolving credit facility borrowings as long term debt. Proceeds from the new term loan were used to repay the outstanding balance of the existing term loan ($95.9 million) and $69.1 million of the revolving credit facility borrowings.

On July 6, 2022, the Company refinanced the fifth amended and restated revolving credit facility with the execution of the sixth amended and restated revolving credit facility comprised of ten participants. The new credit agreement replaced the fifth amended and restated revolving credit facility agreement in its entirety, increased the Term Loan to $165 million, enabled the Company to borrow up to $400 million ($550 million during the heating season of December through April of each year) on a revolving credit facility for working capital purposes (subject to certain borrowing base limitations and coverage ratios) and extended the maturity date to July 6, 2027. Consistent with the fifth amended and restated revolving credit facility, the agreement allows for the issuance of up to $25 million in letters of credit.

The Company can increase the revolving credit facility size by an additional $200 million without the consent of the bank group. However, the bank group is not obligated to fund the $200 million increase. If the bank group elects not to fund the increase, the Company can add additional lenders to the group, with the consent of the Agent (as defined in the credit agreement), which shall not be unreasonably withheld. Obligations under the sixth amended and restated revolving credit facility agreement are guaranteed by the Company and its subsidiaries and are secured by liens on substantially all of the Company’s assets, including accounts receivable, inventory, general intangibles, real property, fixtures and equipment.

All amounts outstanding under the sixth amended and restated revolving credit facility become due and payable on the facility termination date of July 6, 2027. The Term Loan is repayable in quarterly payments of $4.1 million under the new credit agreement beginning January 1, 2023 with no quarterly payment due October 1, 2022, plus an annual payment equal to 25% of the annual Excess Cash Flow as defined in the credit agreement (an amount not to exceed $8.5 million annually), less certain voluntary prepayments made during the year, with final payment at maturity. In fiscal 2022 the Company repaid $4.9 million of additional loan repayments due to Excess Cash Flow related to fiscal 2021. In the first quarter of fiscal 2021 the banks waived the Excess Cash Flow requirement related to fiscal 2020. Under the Company’s sixth amended and restated revolving credit facility, the next annual Excess Cash Flow payment will be applicable for fiscal year ended September 30, 2023.

The interest rate on the fifth amended and restated revolving credit facility and the Term Loan was based on a margin over LIBOR or a base rate. At June 30, 2022, the effective interest rate on the Term Loan was approximately 4.4% and the effective interest rate on revolving credit facility borrowings was approximately 2.3%. At September 30, 2021, the effective interest rate on the term loan and revolving credit facility borrowings was approximately 4.3% and 2.5%, respectively. The interest rate on the revolving line of credit and the term loan under the sixth amended and restated revolving credit facility is based on a margin over Adjusted Term SOFR or a base rate.

The commitment fee on the unused portion of the revolving credit facility is 0.30% from December through April, and 0.20% from May through November.

The sixth amended and restated credit agreement requires the Company to meet certain financial covenants, including a Fixed Charge Coverage Ratio (as defined in the credit agreement) of not less than 1.1 as long as the Term Loan was outstanding or revolving credit facility availability was less than 12.5% of the facility size. In addition, as long as the Term Loan was outstanding, a senior secured leverage ratio could not be more than 3.0 as calculated as of the quarters ending June or September, and no more than 5.5 as calculated as of the quarters ending December or March.

Certain restrictions are also imposed by the sixth amended and restated credit agreement, including restrictions on the Company’s ability to incur additional indebtedness, to pay distributions to unitholders, to pay certain inter-company dividends or distributions, repurchase units, make investments, grant liens, sell assets, make acquisitions and engage in certain other activities.

At June 30, 2022, $95.9 million of the Term Loan was outstanding, $129.5 million amount was outstanding under the revolving credit facility, no hedge positions were secured under the credit agreement, and $5.1 million of letters of credit were issued and outstanding. At September 30, 2021, $110.5 million of the Term Loan was outstanding, $8.6 million was outstanding under the revolving credit facility, no hedge positions were secured under the credit agreement, and $3.1 million of letters of credit were issued and outstanding.

At June 30, 2022, availability was $124.4 million, and the Company was in compliance with the fixed charge coverage ratio and the senior secured leverage ratio. At September 30, 2021, availability was $171.5 million, and the Company was in compliance with the fixed charge coverage ratio and the senior secured leverage ratio.