Debt

12 Months Ended

Dec. 31, 2024

Debt Disclosure [Abstract]

Debt

Debt

Certain debt instruments of the Company contain restrictive and financial covenants and cross-default provisions. In order to borrow under the debt instruments, the Company must be in compliance with the applicable covenants and certain other conditions, all of which management believes the Company, as applicable, was in compliance with as of December 31, 2024. In the event the Company does not comply with the applicable covenants and other conditions, it would be in default on its agreements and alternative sources of funding may need to be pursued.

Long-Term Debt

Long-term debt outstanding was as follows:

	Weighted Average Interest Rate as of December 31, 2024		As of December 31, 2024
	(In percentage)		(In thousands)
Term loan due on October 31, 2029	6.84	%	$	300,000
Less: unamortized debt issuance costs			4,352
Total debt			295,648
Less: current maturities			15,000
Total long-term debt			$	280,648

Term Loan and Revolving Credit Facility

On October 31, 2024, the Company entered into a five-year senior secured credit agreement (“Credit Agreement”), which provides for a $300.0 million term loan (“Term Loan”) and a $225.0 million revolving credit facility (“Revolving Credit Facility”). The Revolving Credit Facility includes letters of credit available under the Credit Agreement in an aggregate amount of up to $50.0 million. The Company drew $40.0 million under the Revolving Credit Facility on the Separation date for projected working capital needs.

On November 29, 2024, the Company repaid the $40.0 million outstanding balance, plus accrued interest, under the Revolving Credit Facility. As of December 31, 2024, there was no outstanding balance under the Revolving Credit Facility, but there were $15.6 million of outstanding standby letters of credit. As a result, the Company had a borrowing capacity of $209.4 million under the Revolving Credit Facility.

The Company incurred $4.4 million and $3.5 million of debt issuance costs for the Term Loan and Revolving Credit Facility, respectively. The costs associated with the Term Loan were capitalized and classified as a reduction to Long-term debt and the costs associated with the Revolving Credit Facility were capitalized and recorded as Other noncurrent assets. Each will be amortized to Interest expense over the term of the Credit Agreement.

The Company incurred $4.1 million of Interest expense related to the Credit Agreement for the year ended December 31, 2024, consisting of $3.7 million of interest on outstanding borrowings, $0.3 million of debt issuance costs amortization and $0.1 million of unused commitment fees. The Company did not incur any Interest expense related to the Credit Agreement for the years ended December 31, 2023 and 2022 as the agreement had not yet commenced during these periods. Refer to Note 15 – Related-Party Transactions for additional information on related-party interest expense pertaining to periods prior to the Separation.

The Term Loan requires quarterly amortization payments of 5.00% per annum of the original principal amount thereof. The Credit Agreement also requires mandatory prepayments in connection with certain asset sales, subject to certain exceptions.

Borrowings under the Credit Agreement bear interest equal to, at the Company’s option, at an annual rate equal to (a) adjusted term SOFR, defined in a customary manner (“Term SOFR”) plus an applicable rate of 2.00% to 2.75%, based on the Company’s total net leverage ratio, or (b) the base rate (determined by reference to the highest of (x) the prime rate, (y) the greater of (i) the federal funds effective rate and (ii) the overnight bank funding rate, in each case, plus 0.50% and (z) the one-month adjusted Term SOFR rate plus 1.00% per annum, subject to customary floors (clauses (x) through (z), the “Base Rate”)) plus an applicable rate of 1.00% to 1.75%, based on the Company’s total net leverage ratio. Undrawn commitment fees under the Revolving Credit Facility range from 0.30% to 0.45% based on the Company’s consolidated total net leverage ratio.

The Credit Agreement provides for incremental revolving and term facilities at the Company’s request and at the discretion of the lenders or other persons providing such incremental facilities, and also permits the Company to incur other secured or unsecured debt, in all cases subject to conditions and limitations on the amount of such incremental facility or other debt as specified in the Credit Agreement.

The Credit Agreement contains certain limitations with respect to indebtedness, liens, acquisitions and other investments, fundamental changes, restrictive agreements, dividends and redemptions or repurchases of stock, prepayments of certain subordinated indebtedness, dispositions of assets and transactions with affiliates, in each case subject to certain exceptions.

The Credit Agreement contains financial covenants requiring the Company to maintain a maximum consolidated total net leverage ratio of 3.00 to 1.00 and a minimum interest coverage ratio of 3.00 to 1.00, each determined as of the end of each fiscal quarter. The consolidated total net leverage ratio may be increased at the Company’s option to 3.50 to 1.00 in connection with certain qualifying material acquisitions. The covenants also include restrictions on the sale of certain assets, loans and investments.

Schedule of Debt Maturities

The amounts of scheduled long-term debt maturities, excluding unamortized debt issuance costs, for the five years following December 31, 2024, aggregate as follows:

	2025		2026		2027		2028		2029		Total
	(In thousands)
Long-term debt maturities, including current portion	$	15,000	$	15,000	$	15,000	$	15,000	$	240,000	$	300,000