LONG-TERM DEBT

12 Months Ended

Dec. 31, 2024

Debt Disclosure [Abstract]

LONG-TERM DEBT

15. LONG-TERM DEBT

Long-term debt consists of the following:

	December 31, 2024		December 31, 2023
	(in thousands)
7.375% Senior Secured Notes due February 2028	$	584,575	$	725,000
Less: issuance discount and issuance costs	5,506		8,754
Long-term debt, net	$	579,069	$	716,246

2028 Senior Secured Notes

In January 2021, the Company issued the notes (the “2028 Notes”) at an issue price of 100% in a private offering exempt from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”). The 2028 Notes are general senior secured obligations of the Company and are guaranteed on a senior secured basis by certain of the Company’s direct and indirect restricted subsidiaries. The 2028 Notes mature on February 1, 2028 and interest on the 2028 Notes accrues and is payable semi-annually in arrears on February 1 and August 1 of each year at a rate of 7.375% per annum.

The 2028 Notes and the guarantees are secured, subject to permitted liens and except for certain excluded assets (i) on a first priority basis by substantially all of the Company’s and the guarantors’ current and future property and assets (other than accounts receivable, cash, deposit accounts, other bank accounts, securities accounts, inventory and related assets that secure the Company’s asset-backed revolving credit facility on a first priority basis (the “ABL Priority Collateral”)), including the capital stock of each guarantor (collectively, the “Notes Priority Collateral”) and (ii) on a second priority basis by the ABL Priority Collateral. The 2028 Notes require the Company to file quarterly and annual reports with the SEC within a specified time period after the Company’s fiscal quarter end and year end. However, failure to comply does not constitute an event of default unless the Company does not comply within 120 days after receiving written notice from the Trustee. The Company has not received any such notice.

The Company conducts a portion of its business through its subsidiaries. Certain of the Company’s subsidiaries have fully and unconditionally guaranteed the Company’s 2028 Notes.

The deferred financing costs included in interest expense for all instruments, for the years ended December 31, 2024 and 2023, were approximately $1.9 million and $2.1 million, respectively. The Company’s effective interest rate was 7.85% for 2024 and 7.62% for 2023.

From time to time, the Company may repurchase its debt securities in open market purchases. Under open authorizations, repurchases of the outstanding debt may be made from time to time on the open market or in privately negotiated transactions in accordance with applicable laws and regulations. Repurchased debt is retired when repurchased. The timing and extent of any repurchases will depend upon prevailing market conditions, the trading price of the Company’s outstanding debt and other factors, and subject to restrictions under applicable law.

On December 6, 2022, the Board of Directors authorized and approved a note repurchase program for up to $25.0 million of the currently outstanding 2028 Notes (the "Q4 2022 Notes Repurchase Authorization"). During the year ended December 31, 2023, the Company repurchased approximately $25.0 million of its 2028 Notes at an average price of approximately 89.1% of par. The Company recorded a net gain on retirement of debt of approximately $2.4 million for the year ended December 31, 2023. The repurchase activity during the year ended December 31, 2023, exhausted the Q4 2022 Notes Repurchase Authorization

During the fourth quarter of 2023, the Board of Directors authorized and approved a subsequent note repurchase program for up to $75.0 million of the currently outstanding 2028 Notes (the "Q4 2023 Notes Repurchase Authorization"). During the second quarter of 2024, the Board of Directors authorized and approved a further note repurchase program for up to $75.0 million of the currently outstanding 2028 Notes (the "June 2024 Authorization").

During the year ended December 31, 2024, the Company repurchased approximately $140.4 million of its 2028 Notes at an average price of approximately 82.3% of par. The Company recorded a net gain on retirement of debt of approximately $23.3 million during the year ended December 31, 2024. Giving effect to these repurchases and prior activity under the authorization, the Company exhausted the Q4 2023 Notes Repurchase Authorization and has approximately $9.6 million remaining under the June 2024 Authorization.

At December 31, 2024 and 2023, the fair value of the 2028 Notes was approximately $341.5 million and $616.3 million, respectively. The fair values of the 2028 Notes, classified as a Level 2 instrument, were determined based on the trading values of this instrument in an inactive market as of the reporting date.

Asset-Backed Credit Facilities

On February 19, 2021, the Company closed on its asset backed credit facility (the “Current ABL Facility”). The Current ABL Facility is governed by a credit agreement by and among the Company, the other borrowers party thereto, the lenders party thereto from time to time and Bank of America, N.A., as administrative agent. The Current ABL Facility provides for up to $50.0 million revolving loan borrowings in order to provide for the working capital needs and general corporate requirements of the Company. The Current ABL Facility also provides for a letter of credit facility up to $5.0 million as a part of the overall $50.0 million in capacity. As of each December 31, 2024 and 2023, there was no balance outstanding on the Current ABL Facility.

At the Company’s election, the interest rate on borrowings under the Current ABL Facility is based on either (i) the then applicable margin relative to Base Rate Loans (as defined in the Current ABL Facility) or (ii) until execution of the Waiver and Amendment (as defined below) took effect, the then applicable margin relative to LIBOR Loans (as defined in the Current ABL Facility) corresponding to the average availability of the Company for the most recently completed fiscal quarter.

Advances under the Current ABL Facility are limited to (a) eighty-five percent (85%) of the amount of Eligible Accounts (as defined in the Current ABL Facility), less the amount, if any, of the Dilution Reserve (as defined in the Current ABL Facility), minus (b) the sum of (i) the Bank Product Reserve (as defined in the Current ABL Facility), plus (ii) the AP and Deferred Revenue Reserve (as defined in the Current ABL Facility), plus (iii) without duplication, the aggregate amount of all other reserves, if any, established by the Administrative Agent.

All obligations under the Current ABL Facility are secured by a first priority lien on all (i) deposit accounts (related to accounts receivable), (ii) accounts receivable, and (iii) all other property which constitutes ABL Priority Collateral (as defined in the Current ABL Facility). The obligations are also guaranteed by all material restricted subsidiaries of the Company. The Current ABL Facility includes a covenant requiring the Company’s fixed charge coverage ratio, as defined in the agreement, to not be less than 1.00 to 1.00. The Company is in compliance with its covenant as of December 31, 2024.

Additionally, under the Waiver and Amendment, the Current ABL Facility was amended to provide that from and after the date thereof, any request for a new London Interbank Offer Rate, ("LIBOR Loan") (as defined in the Current ABL Facility), for a continuation of an existing LIBOR Loan (as defined in the Current ABL Facility) or for a conversion of a Loan to a LIBOR Loan (as defined in the Current ABL Facility) shall be deemed to be a request for a loan bearing interest at Term Secured Overnight Financing Rate Data, ("SOFR") (as defined in the Amended Current ABL Facility) (the “SOFR Interest Rate Change”). As the Company was undrawn under the Current ABL Facility as of the date of the Waiver and Amendment, the SOFR Interest Rate Change would only bear upon future borrowings by the Company such that they bear an interest rate relating to the secured overnight financing rate. These provisions of the Waiver and Amendment are intended to transition loans under the Current ABL Facility to the new secured overnight financing rate as the benchmark rate.

Between June 5, 2023 and May 30, 2024, the Company entered into six more waivers and amendments related to the Company’s failure to timely deliver certain financial deliverables as required under the Current ABL Facility Most recently, on May 30, 2024, the Company entered into a seventh waiver and amendment (the “Seventh Waiver and Amendment” to the Current ABL Facility. The Seventh Waiver and Amendment waived certain events of default under the Current ABL Facility related to the Company’s failure to timely deliver both the Annual Financial Deliverables for the year ended December 31, 2023 (the “2023 Form 10-K”) and Quarterly Financial Deliverables for the three months ended March 31, 2024 as required under the Current ABL Facility (the “2024 Q1 Form 10-Q” and, together with the “2023 Form 10-K”, the “Delayed Reports”). The Seventh Waiver and Amendment sets a due date of June 17, 2024 for the Delayed Reports. The Delayed Reports were filed on June 7, 2024, bringing the Company back into compliance with the requirements under the Current ABL Facility.

The Current ABL Facility matures on the earlier to occur of (a) the date that is five years from the effective date of the Current ABL Facility, and (b) 91 days prior to the maturity of the Company’s 2028 Notes. The Current ABL Facility is subject to the terms of the Revolver Intercreditor Agreement (as defined in the Current ABL Facility) by and among the Administrative Agent and Wilmington Trust, National Association.

Future Minimum Principal Payments

Future scheduled minimum principal payments of debt as of December 31, 2024, were as follows:

	2028 Notes
	(in thousands)
2025	$	—
2026	—
2027	—
2028	584,575
2029	—
2030 and thereafter	—
Total debt	$	584,575

Letter of Credit Facility

In the first quarter of 2024, the Company closed its letter of credit reimbursement and security agreement with capacity of up to $1.2 million and received a $1.2 million deposit held with the counterparty in connection with the agreement