Floor Plan Financing

6 Months Ended

Jun. 30, 2023

Debt Disclosure [Abstract]

Floor Plan Financing

Note 6: 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 June 30, 2023, the Company was in compliance with these covenants.

The amounts owed under floor plan payables are summarized as follows:

(in $000s)	June 30, 2023		December 31, 2022
Trade:
Daimler Truck Financial	$	93,236	$	105,447
PACCAR Financial Services	46,487		31,187
Trade floor plan payables	$	139,723	$	136,634
Non-trade:
PNC Equipment Finance, LLC	$	366,092	$	293,536
Non-trade floor plan payables	$	366,092	$	293,536

Interest on outstanding floor plan payable balances is due and payable monthly. Floor plan interest expense was $8.1 million and $14.9 million for the three and six months ended June 30, 2023, respectively, and $2.2 million, and $3.9 million for the three and six months ended June 30, 2022, respectively.

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. Amounts borrowed against this line of credit incur interest at a rate of U.S. Prime Rate minus 0.6%. 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 June 30, 2023, provides the Company with a $370.0 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%. On May 26, 2023, the Company notified PNC Equipment Finance, LLC of the Company’s intent to renew the Loan Agreement by an additional two years.

Note 8: Long-Term Debt

Debt obligations and associated interest rates consisted of the following:

(in $000s)	June 30, 2023		December 31, 2022		June 30, 2023	December 31, 2022
ABL Facility	$	492,411	$	437,731	7.3%	6.1%
2029 Secured Notes	920,000		920,000		5.5%	5.5%
2023 Credit Facility	13,800		—		5.8%	—
Notes payable	27,600		31,661		3.1%-5.0%	3.1%-5.0%
Total debt outstanding	1,453,811		1,389,392
Deferred financing fees	(25,144)		(27,686)
Total debt net of deferred financing fees	1,428,667		1,361,706
Less: current maturities	(3,550)		(6,940)
Long-term debt	$	1,425,117	$	1,354,766

As of June 30, 2023, borrowing availability under the ABL Facility was $254.5 million, and outstanding standby letters of credit were $3.1 million.

ABL Facility

As of March 27, 2023, the ABL Facility was amended to change the London Interbank Offered Rate (“LIBOR”) rate to the SOFR rate. Borrowings under the ABL Facility bears interest at a floating rate, which, at Buyer’s election, could be (a) in the case of U.S. dollar denominated loans, either (i) SOFR plus an applicable margin or (ii) the base rate plus an applicable margin; or (b) in the case of Canadian dollar denominated loans, the CDOR rate plus an applicable margin. The applicable margin varies based on Average Availability (as defined in the ABL Credit Agreement) from (a) with respect to base rate loans, 0.50% to 1.00% and (b) with respect to SOFR loans and CDOR rate loans, 1.50% to 2.00%.

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.