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. With the execution of the Credit Agreement (known to Regions Bank and co-syndication agents as the Fourth Amendment), the prior indebtedness was treated as an extinguishment of debt and accounted for under the guidelines of ASC 470-05, Debt, Modifications and Extinguishments. The primary purpose of the Credit Agreement was to provide the Company with greater financing flexibility by providing a new amortization schedule, an extended maturity date, increased availability under the revolving line of credit, and a reduction in overall costs.

The Credit Agreement, which may be amended from time to time, provides for borrowings under a revolving line of credit and swingline loans with a commitment amount of $100.0 million and a term loan with a commitment amount of $60.0 million (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. The Credit Facility matures on July 31, 2023.

Total debt issuance costs for the Fourth Amendment, which included underwriter fees, legal fees and syndication fees were approximately $0.9 million and have been capitalized as non-current deferred charges and amortized using the effective interest rate method over the duration of the loan. Prior unamortized debt issuance costs of $2.2 million for the extinguishment of debt were recognized as interest expense as of July 31, 2018. During the fourth quarter of 2018, the Company executed the Fifth Amendment and additional costs were incurred of approximately $0.7 million. The weighted average interest rate for the Credit Facility as of December 31, 2018 was 4.63%.

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



	December 31, 2018							December 31, 2017
	Principal		Debt Issuance Costs⁽¹⁾			Total		Principal		Debt Issuance Costs⁽¹⁾			Total
Revolving line of credit	$	—	$	—		$	—	$	10,000	$	(317	)	$	9,683
Term loan - current	3,000		(54		)	2,946		13,500		(427		)	13,073
Total current debt	3,000		(54		)	2,946		23,500		(744		)	22,756
Revolving line of credit	22,000		(213		)	21,787		—		—			—
Term loan - long-term	55,500		(1,168		)	54,332		65,250		(2,065		)	63,185
Total long-term debt	$	77,500	$	(1,381	)	$	76,119	$	65,250	$	(2,065	)	$	63,185
Total debt	$	80,500	$	(1,435	)	$	79,065	$	88,750	$	(2,809	)	$	85,941

(1) Total debt issuance costs, include underwriter fees, legal fees, syndication fees, and fees related to the execution of the First, Second, Third, Fourth and Fifth Amendments to the Credit Agreement as previously discussed.

Provisions of the revolving line of credit and accordion

The Company has a maximum borrowing availability under the revolving line of credit and swingline loans (as defined in the Credit Agreement) of $100.0 million. With the execution of the Fifth Amendment, the maximum borrowing availability under the revolving line of credit as of December 31, 2018, was temporarily reduced to $65.0 million and will remain in effect until certain conditions have been met. The letter of credit sublimit is equal to the lesser of $20.0 million and the aggregate unused amount of the revolving commitments then in effect. The swingline sublimit is 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 made in an aggregate minimum amount of $1.0 million and integral multiples of $250,000 in excess of that amount. Swingline loans must be made 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 available to borrow 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.

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. Prior to the fourth quarter of 2018, the Company classified amounts drawn as current liabilities based on an intent and ability to repay the amounts using current assets within the next twelve months. During the fourth quarter of 2018, the Company determined it no longer has the intent to repay amounts drawn within the next twelve months. Therefore, the Company has classified the entire outstanding balance of the revolving line of credit as non-current.

As of December 31, 2018, the outstanding balance for all borrowings under the revolving line of credit was $22.0 million and was designated as an Adjusted LIBOR Rate Loan at a rate of 4.63%. There were also $0.8 million in outstanding letters of credit as of December 31, 2018, which reduced the maximum borrowing availability on the revolving line of credit to $42.2 million as of December 31, 2018. During 2018, the Company drew down $39.9 million, transferred $12.0 million from the term loan and made payments of $39.9 million on the revolving line of credit.

Provisions of the term loan

The original principal amount of $60.0 million for the term loan commitment is paid off in quarterly installment payments (as stated in the Credit Agreement). At December 31, 2018, the outstanding term loan component of the Credit Facility totaled $58.5 million and was secured by specific assets of the Company. The table below outlines the total remaining payment amounts annually for the term loan through maturity of the Credit Facility:



2019	3,000
2020	3,750
2021	4,500
2022	5,250
2023	42,000
	$	58,500

The Company made the scheduled quarterly principal payments of $8.2 million and an additional amount of $12.0 million during 2018 was transferred to the revolving line of credit, which reduced the outstanding principal balance to $58.5 million at December 31, 2018. The current portion of debt is $3.0 million and the non-current portion is $55.5 million. As of December 31, 2018, the term loan was designated as an Adjusted LIBOR Rate Loan with an interest rate of 4.63%.

Financial covenants

Restrictive financial covenants under the Credit Facility include:


•	A consolidated Fixed Charge Coverage Ratio as of the end of any fiscal quarter to not be less than 1.25 to 1.00.


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

-Fiscal Quarter Ending December 31, 2018, to not exceed 3.00 to 1.00;

-Fiscal Quarter Ending March 31, 2019, to not exceed 4.75 to 1.00;

-Fiscal Quarter Ending June 30, 2019, to not exceed 4.75 to 1.00;

-Fiscal Quarter Ending September 30, 2019 and each Fiscal Quarter thereafter, to not exceed 3.00 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 2018, the Company initiated discussions with the lead bank due to concerns it would not be in compliance with financial covenants. The Company executed the Fifth Amendment during March 2019, which was effective as of December 31, 2018. The Leverage Ratio was adjusted beginning with the quarter ended December 31, 2018 through September 30, 2019 and each Fiscal Quarter thereafter, as reflected above. The Fixed Charge Coverage Ratio was unchanged. Additionally with this amendment, for the purpose of calculating the financial covenants, solely with respect to the Fiscal Quarters of the Borrower ending March 31, 2019, June 30, 2019 and September 30, 2019, Consolidated EBITDA to be determined for the Fiscal Quarter of the Borrower ending (A) March 31, 2019 by multiplying the Consolidated EBITDA for such Fiscal Quarter by four (4), (B) June 30, 2019 by multiplying the Consolidated EBITDA for such Fiscal Quarter plus the Consolidated EBITDA for the immediately preceding Fiscal Quarter by two (2) and (C) September 30, 2019 by multiplying the Consolidated EBITDA for such Fiscal Quarter plus the Consolidated EBITDA for the immediately preceding two (2) Fiscal Quarters by four-thirds (4/3). This amendment to the Credit Agreement will increase the cost of the Company's borrowings and will impose additional limitations on certain types of activities, such as acquisitions. With the execution of the aforementioned amendment, the Company was in compliance with all financial covenants as of December 31, 2018.

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 are 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 is scheduled to expire and will 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 a sixth receive-variable, pay-fixed interest rate swaps to hedge the variability of interest payments. The sixth swap will begin with a notional amount of $27.0 million on July 31, 2020 will hedge the variability in the interest payments on 50% of the aggregate scheduled principal amount of the Regions Term Loan outstanding. The sixth swap is scheduled to expire on July 31, 2023. At inception, these interest rate swaps were designated as a cash flow hedge for hedge accounting, and as such, the effective portion of unrealized changes in market value are recorded in accumulated 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 are recognized in current earnings. The change in fair market value of the swaps as of December 31, 2018 is less than $0.1 million, which is reflected in the balance sheet as a liability. The fair market value of the swaps as of December 31, 2018 is less than $0.1 million. See Note 9 for more information regarding the fair value of the Company's derivative instruments.