Long-Term Debt and Revolving Line of Credit

3 Months Ended

Mar. 31, 2024

Debt Disclosure [Abstract]

Long-Term Debt and Revolving Line of Credit

Long-Term Debt and Revolving Line of Credit

The Company has been a party to a Credit Agreement since August 2017 that provides for a senior secured term loan and commitments under a revolving credit facility. The Company and the lenders most recently modified the Credit Agreement on June 17, 2021, which provides for, among other things, (i) the extension of the termination date applicable to the revolving credit commitments to August 2025, (ii) the extension of the maturity date applicable to the term loans under the Credit Agreement to August 2026, and (iii) an increase of approximately $80,000 in commitments available under the revolving line of credit (resulting in an aggregate amount of commitments of $100,000). The term loan under this Amendment has substantially the same terms as the existing term loans and revolving credit commitments. The Credit Agreement is collateralized by substantially all U.S. assets and stock pledges for the non-U.S. subsidiaries and contain various financial and nonfinancial covenants.

Borrowings under the Credit Agreement are subject to a variable interest rate at LIBOR plus a margin. The applicable margins were based on achieving certain levels of compliance with financial covenants. In response to the discontinuation of LIBOR, the Company executed a LIBOR transition amendment on June 26, 2023, formalizing the replacement of LIBOR with the Secured Overnight Funding Rate (“SOFR”). As part of this modification, a Credit Spread Adjustment (“CSA”) was introduced to align SOFR with LIBOR in terms of the overall interest rate earned by lenders under the Credit Agreement. The CSA varied depending on the selected interest period.

As of March 31, 2024 and December 31, 2023, available borrowings under the revolving lines of credit were $100,000.

The effective interest rate was 9.24% and 8.03% for the three months ended March 31, 2024 and 2023 for the term loan debt. As discussed previously, the Company entered into interest rate swap agreements to mitigate the interest risk.

Interest incurred on the Credit Agreement with respect to the term loan amounted to $6,798 and $5,974 for the three months ended March 31, 2024 and 2023, respectively. Accrued interest payable on the Credit Agreement with respect to the term loan amounted to $2,382 and $2,400 at March 31, 2024 and December 31, 2023, respectively, and is included in accrued expenses. Interest incurred on the Credit Agreement with respect to the revolving line of credit was $63 for both the three months ended March 31, 2024 and 2023, respectively. There was $2 accrued interest payable on the revolving line of credit each at March 31, 2024 and December 31, 2023, respectively.

Long-term debt consists of the following:

	MARCH 31, 2024		DECEMBER 31, 2023
	(In thousands)
Term loans	$	293,695	$	294,450
Revolving line of credit	—		—
Less: debt issuance costs	(2,903)		(3,213)
Total	290,792		291,237
Current portion of long-term debt	(3,020)		(3,020)
Long-term debt, net of current portion and debt issuance costs	$	287,772	$	288,217

The principal amount of long-term debt outstanding as of March 31, 2024 matures in the following years:

	Remainder of 2024		2025		2026		TOTAL
	(In thousands)
Maturities	$	2,265	$	3,020	$	288,410	$	293,695

The Credit Agreement requires the Company to make an annual mandatory prepayment as it relates to the Company’s Excess Cash Flow calculation. For the year ended December 31, 2023, the Company was not required to make a mandatory prepayment on the term loan. The Company is required to make a quarterly principal payment of $755 on the term loan.

The fair values of the Company’s variable interest term loan and revolving line of credit are not significantly different than their carrying value because the interest rates on these instruments are subject to change with market interest rates.