Long-term Debt, Line of Credit and Derivatives

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.

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. During the fourth quarter of 2018, the Company executed the Fifth Amendment and additional costs were incurred of approximately $0.7 million.

The quarterly weighted average interest rate for the Credit Facility as of March 31, 2019 was 4.92%.

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



	March 31, 2019							December 31, 2018
	Principal		Debt Issuance Costs⁽¹⁾			Total		Principal		Debt Issuance Costs⁽¹⁾			Total
Term loan - current	$	3,000	$	(50	)	$	2,950	$	3,000	$	(54	)	$	2,946
Total current debt	3,000		(50		)	2,950		3,000		(54		)	2,946
Revolving line of credit	23,000		(372		)	22,628		22,000		(213		)	21,787
Term loan - long-term	54,750		(886		)	53,864		55,500		(1,168		)	54,332
Total long-term debt	77,750		(1,258		)	76,492		77,500		(1,381		)	76,119
Total debt	$	80,750	$	(1,308	)	$	79,442	$	80,500	$	(1,435	)	$	79,065

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

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 March 31, 2019, the outstanding balance for all borrowings under the revolving line of credit was $23.0 million and was designated as an Adjusted LIBOR Rate Loan at a rate of 5.25%. There were also $0.8 million in outstanding letters of credit as of March 31, 2019, which reduced the maximum borrowing availability on the revolving line of credit to $41.2 million as of March 31, 2019. During the three months ended March 31, 2019 , the Company drew down $11.0 million and made payments of $10.0 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 March 31, 2019, the outstanding term loan component of the Credit Facility totaled $57.8 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	2,250
2020	3,750
2021	4,500
2022	5,250
2023	42,000
	$	57,750

During the three months ended March 31, 2019, the Company made the scheduled quarterly principal payment of $0.8 million, which reduced the outstanding principal balance to $57.8 million as of March 31, 2019. The current portion of debt is $3.0 million and the non-current portion is $54.8 million. As of March 31, 2019, the term loan was designated as an Adjusted LIBOR Rate Loan with an interest rate of 5.25%.

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.

During the first quarter of 2019, the Company initiated discussions with the lead bank due to concerns that it would not be in compliance with financial covenants and executed the Sixth Amendment during May 2019. With the execution of the aforementioned amendment, the Company obtained a waiver on the financial covenants as of March 31, 2019.

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.

The Company expects to meet its future internal liquidity and working capital needs, and maintain or replace its equipment fleet through capital expenditure purchases and major repairs, from funds generated by its operating activities for at least the next 12

months. The Company believes that its cash position and available borrowings together with cash flow from its operations is

adequate for general business requirements and to service its debt.

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, 2023. On December 6, 2018, the Company entered into 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 (loss) income 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 March 31, 2019 is $0.3 million, which is reflected in the balance sheet as a liability in Other non-current liabilites on the Consolidated Balance Sheets. The fair market value of the swaps as of March 31, 2019 is $(0.4) million. See Note 8 for more information regarding the fair value of the Company's derivative instruments.