Note 11 - Credit Agreements

9 Months Ended

Sep. 30, 2024

Notes to Financial Statements

Debt Disclosure [Text Block]

11.   Credit Agreements

Short-term borrowings included in the condensed consolidated balance sheets as of September 30, 2024, and December 31, 2023, consisted of borrowings by the Company’s foreign subsidiaries on local lines of credit totaling $65,540 and $81,769, respectively.

Long-term borrowings are included in the condensed consolidated balance sheets as follows:

	September 30,			December 31,
	2024			2023
Tranche A Term Loan Facility	$	721,875		$	745,313
Tranche B Term Loan Facility		500,000			530,000
Original issue discount and capitalized debt fees		(8,853	)		(12,685	)
Revolving Facility		150,000			150,000
Finance lease obligation		90,622			71,308
Other		6,169			9,512
Total		1,459,813			1,493,448
Less: current portion of debt		53,193			42,110
Less: current portion of finance lease obligation		45,983			3,785
Total long-term borrowings and finance lease obligations	$	1,360,637		$	1,447,553

The Tranche A Term Loan Facility and Revolving Facility mature on June 29, 2027. The Tranche A Term Loan Facility is repayable in installments maturing at the end of each quarter commencing September 2023, with a balloon payment due June 2027. The Tranche B Term Loan Facility matures on July 3, 2031, and is repayable in installments maturing at the end of each quarter commencing September 2024, with a balloon payment due July 2031. Maturities of the Company's Tranche A Term Loan Facility, Tranche B Term Loan Facility, and Revolving Facility outstanding on  September 30, 2024, are as follows:

	Tranche A Term Loan Facility		Tranche B Term Loan Facility		Revolving Facility		Total
2024	$	9,375	$	2,500	$	-	$	11,875
2025		46,875		5,000		-		51,875
2026		65,625		5,000		-		70,625
2027		600,000		5,000		150,000		755,000
2028		-		5,000		-		5,000
2029		-		5,000		-		5,000
2030		-		5,000		-		5,000
2031		-		467,500		-		467,500
Total	$	721,875	$	500,000	$	150,000	$	1,371,875

The Company’s credit agreements originally provided for a $1,200,000 Tranche B Term Loan Facility (“original Term Loan B Facility”) and included a $300,000 uncommitted incremental term loan on that facility. After several amendments, the original Term Loan B Facility bore interest at rates based on either a base rate plus an applicable margin of 0.75% or adjusted SOFR rate plus an applicable margin of 1.75%, subject to a SOFR floor of 0.0%, and was scheduled to mature on December 13, 2026. 

In July 2024, the Company extinguished the $530,000 balance then outstanding under the former Tranche B Term Loan Facility and replaced it with a new $500,000 Tranche B Term Loan Facility maturing on July 3, 2031. The new Tranche B Term Loan Facility continues to include a $300,000 uncommitted incremental term loan on that facility. In accordance with ASC 470-50, the Company capitalized $2,991 of debt issuance costs. Additionally, the Company wrote-off the unamortized deferred financing costs related to the former Tranche B Term Loan Facility of $4,236 and expensed $625 of fees paid to creditors as a loss on extinguishment of debt. The new Tranche B Term Loan Facility bears interest at the adjusted SOFR rate plus an applicable margin of 1.75%, subject to a SOFR floor of 0.0%, resulting in a 6.95% combined rate as of September 30, 2024. 

The Tranche B Term Loan Facility does not require an Excess Cash Flow payment if the Company’s net secured leverage ratio is maintained below 3.75 to 1.00. As of September 30, 2024, the Company’s net secured leverage ratio was 1.70 to 1.00, and the Company was in compliance with all covenants of the Tranche B Term Loan Facility. There are no financial maintenance covenants on the Tranche B Term Loan Facility.

In June 2022, the Company amended and restated its existing credit agreements ("Amended Credit Agreement") resulting in a new term loan A facility in an aggregate principal amount of $750,000 ("Tranche A Term Loan Facility"), established a new $1,250,000 Revolving Facility, and replaced all LIBOR provisions with SOFR provisions. The Tranche A Term Loan Facility and the Revolving Facility initially bore interest at a rate based on adjusted SOFR plus an applicable margin of 1.5% through December 31, 2022, subject to a SOFR floor of 0.0%. Beginning on January 1, 2023, the Tranche A Term Loan Facility and the Revolving Facility bear interest at a rate based on adjusted SOFR plus an applicable margin between 1.25% and 1.75%, based on the Company's total leverage ratio and subject to a SOFR floor of 0.0%, resulting in a 6.93% combined interest rate for the Tranche A Term Loan Facility and Revolving Facility as of September 30, 2024. 

The Tranche A Term Loan Facility and the Revolving Facility contain certain financial covenants that require the Company to maintain a total leverage ratio below 3.75 to 1.00 as well as an interest coverage ratio above 3.00 to 1.00. As of September 30, 2024, the Company’s total leverage ratio was 1.79 to 1.00, and the Company's interest coverage ratio was 8.69 to 1.00. The Company was also in compliance with all other covenants of the Amended Credit Agreement as of September 30, 2024. 

The Tranche B Term Loan Facility, Tranche A Term Loan Facility and Revolving Facility are guaranteed by substantially all of the Company’s wholly-owned domestic restricted subsidiaries and are secured by associated collateral agreements which pledge a first priority lien on virtually all of the Company’s assets, including fixed assets and intangibles, cash, trade accounts receivable, inventory, and other current assets and proceeds thereof. 

As of September 30, 2024, there was $150,000 outstanding under the Revolving Facility, leaving $1,099,203 of unused capacity, net of outstanding letters of credit. 

See Note 5, "Derivative Instruments and Hedging Activities" and Item 7A of the Annual Report on Form 10-K for further information on interest rate swaps that are currently outstanding and partially offset the above interest expense on outstanding borrowings.