Floor Plan Financing

3 Months Ended

Mar. 31, 2023

Debt Disclosure [Abstract]

Floor Plan Financing

Note 7: Floor Plan Financing

Floor plan payables represent financing arrangements to facilitate the Company’s purchase of new and used trucks, cranes, and construction equipment inventory. All floor plan payables are collateralized by the inventory financed. These payables become due and payable upon the sale, transfer, or reclassification of each unit of inventory. Certain floor plan arrangements require the Company to satisfy various financial ratios consistent with those under the ABL Facility. As of March 31, 2023, the Company was in compliance with these covenants.

The amounts owed under floor plan payables are summarized as follows (in thousands):

(in $000s)	March 31, 2023		December 31, 2022
Trade:
Daimler Truck Financial	$	113,916	$	105,447
PACCAR Financial Services	45,113		31,187
Trade floor plan payables	$	159,029	$	136,634
Non-trade:
PNC Equipment Finance, LLC	$	312,470	$	293,536
Non-trade floor plan payables	$	312,470	$	293,536

Interest on outstanding floor plan payable balances is due and payable monthly. Floor plan interest expense was $6.8 million and $1.7 million for the three months ended March 31, 2023 and March 31, 2022.

Trade Floor Plan Financing:

Daimler Truck Financial

The Wholesale Financing Agreement with Daimler Truck Financial (the “Daimler Facility”) bears interest at a rate of U.S. Prime plus 0.80% after an initial interest free period of up to 150 days. The total borrowing capacity under the Daimler Facility is $175.0 million. The Daimler agreement is evergreen and is subject to termination by either party through written notice.

PACCAR

The Company has an Inventory Financing Agreement with PACCAR Financial Corp that provides the Company with a line of credit of $75.0 million to finance inventory purchases of new Peterbilt and/or Kenworth trucks, tractors, and chassis. Effective during the first quarter of 2023, amounts borrowed against this line of credit incur interest at a rate of U.S. Prime Rate minus 0.6%. Previously, amounts borrowed against this line of credit incur interest at a rate of LIBOR plus 2.4%. The PACCAR agreement extends automatically each April and is subject to termination by either party through written notice. References to the prime rate in the foregoing agreements represent the rate as published in The Wall Street Journal.

Non-Trade Floor Plan Financing:

PNC Equipment Finance, LLC

The Company has an Inventory Loan, Guaranty and Security Agreement (the “Loan Agreement”) with PNC Equipment Finance, LLC. The Loan Agreement as of March 31, 2023, provides the Company with a $315.0 million revolving credit facility, which matures on August 25, 2023 and bears interest at a three-month term secured overnight financing rate (“SOFR”) plus 3.25%. The facility was increased from $315.0 million to $370.0 million on April 17, 2023.

Note 9: Long-Term Debt

Debt obligations and associated interest rates consisted of the following:

(in $000s)	March 31, 2023		December 31, 2022		March 31, 2023	December 31, 2022
ABL Facility	$	462,400	$	437,731	6.5%	6.1%
2029 Secured Notes	920,000		920,000		5.5%	5.5%
2023 Credit Facility	13,725		—		5.8%	—
Notes payable	29,716		31,661		3.1%-5.0%	3.1%-5.0%
Total debt outstanding	1,425,841		1,389,392
Deferred financing fees	(26,559)		(27,686)
Total debt excluding deferred financing fees	1,399,282		1,361,706
Less: current maturities	(5,243)		(6,940)
Long-term debt	$	1,394,039	$	1,354,766

As of March 31, 2023, borrowing availability under the ABL Facility was $284.5 million, and outstanding standby letters of credit were $3.1 million.

2023 Credit Facility

On January 13, 2023, the Company entered into a new credit agreement allowing for borrowings of up to $18.0 million (the “2023 Credit Facility”). Proceeds from the credit agreement were used to finance a portion of the Company’s acquisition of real property from a related party in December 2022. A portion of the loan proceeds will be used to finance improvements to the property. In connection with entering into the agreement, the Company received net proceeds of $13.7 million with the ability to draw an additional $4.2 million upon completion of certain construction milestones. Borrowings bear interest at a fixed rate of 5.75% per

annum and are required to be repaid monthly in an amount of approximately $0.1 million with a balloon payment due on the maturity date of January 13, 2028. Borrowings are secured by the real property and improvements.