Long-term Debt, Line of Credit and Derivatives

The Company entered into a syndicated credit agreement (the "Credit Agreement") on August 5, 2015 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, Branch Banking & Trust Company, Frost Bank, Bank Midwest, a division of NBH Bank, N.A., IBERIABANK, KeyBank NA, Trustmark National Bank, and First Tennessee Bank NA. The primary purpose of the Credit Agreement was to finance the acquisition of TAS, to provide a revolving line of credit, and to provide financing to extinguish all prior indebtedness with Wells Fargo Bank, National Associates, as administrative agent, and Wells Fargo Securities, LLC.

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 $50.0 million and a term loan with a commitment amount of $135.0 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. The rate for all loans at the time of loan origination was 4.75%. 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 August 5, 2020.

The quarterly weighted average interest rate for the Credit Facility as of September 30, 2017 was 3.80%.

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



	September 30, 2017							December 31, 2016
	Principal		Debt Issuance Costs⁽¹⁾			Total		Principal		Debt Issuance Costs⁽¹⁾			Total
Revolving line of credit	$	—	$	—		$	—	$	8,000	$	(252	)	$	7,748
Term loan - current	13,500		(422		)	13,078		11,813		(373		)	11,440
Total current debt	13,500		(422		)	13,078		19,813		(625		)	19,188
Term loan - long-term	68,625		(2,144		)	66,481		84,750		(2,673		)	82,077
Total debt	$	82,125	$	(2,566	)	$	79,559	$	104,563	$	(3,298	)	$	101,265

(1) Total debt issuance costs, include underwriter fees, legal fees and syndication fees and fees related to the execution of the First and Second Amendment 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 $50.0 million. 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, August 5, 2020, or the date the outstanding balance is permanently reduced to zero. The Company has the intent and ability to repay the amounts outstanding on the revolving line of credit within one year, therefore, any outstanding balance will be classified as current. There is no outstanding balance on the revolving line of credit as of September 30, 2017.

As of September 30, 2017, there was no outstanding balance on the revolving line of credit. There was $0.9 million in outstanding letters of credit as of September 30, 2017, which reduced the maximum borrowing availability on the revolving line of credit to $49.1 million. The Company made payments of $15.0 million on the outstanding revolving balance during the third quarter of 2017. Subsequent to the third quarter, the Company drew $20.0 million on the revolving line of credit.

Provisions of the term loan

The original principal amount of $135.0 million for the term loan commitment is paid off in quarterly installment payments (as stated in the Credit Agreement). At September 30, 2017, the outstanding term loan component of the Credit Facility totaled $82.1 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:



2017	$	3,375
2018	13,500
2019	15,188
2020	50,062
	$	82,125

During the three months ended September 30, 2017, the Company made the scheduled quarterly principal payment of $3.4 million, and an additional principal paydown of $3.0 million, which reduced the outstanding principal balance to $82.1 million as of September 30, 2017. The current portion of debt is $13.5 million and the non-current portion is $68.6 million. As of September 30, 2017, the term loan was designated as an Adjusted LIBOR Rate Loan with an interest rate of 3.75%.

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:

-Closing Date through and including December 31, 2015, to not exceed 3.25 to 1.00;

-Fiscal Quarter Ending March 31, 2016, to not exceed 4.00 to 1.00;

-Fiscal Quarter Ending June 30, 2016, to not exceed 3.75 to 1.00;

-Fiscal Quarter Ending September 30, 2016, to not exceed 3.25 to 1.00;

-Fiscal Quarter Ending December 31, 2016, to not exceed 3.00 to 1.00;

-Fiscal Quarter Ending March 31, 2017, to not exceed 2.75 to 1.00;

-Fiscal Quarter Ending June 30, 2017, to not exceed 2.75 to 1.00;

-Fiscal Quarter Ending September 30, 2017 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 third quarter of 2017, the Company initiated discussions with the lead bank due to concerns it would not be in compliance with financial covenants. A third amendment to the Credit Agreement was executed during November 2017, which was effective as of September 30, 2017. The Leverage Ratio was adjusted beginning with the quarter ended September 30, 2017 through each fiscal quarter thereafter, as reflected above. The Fixed Charge Coverage Ratio was unchanged. With the execution of the aforementioned amendment, the Company was in compliance with all financial covenants as of September 30, 2017.

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. 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 September 30, 2017 is $0.3 million, which is reflected in the balance sheet as a liability. The fair market value of the swaps as of September 30, 2017 is $0.4 million. See Note 8 for more information regarding the fair value of the Company's derivative instruments.