Debt and Financing Arrangements

3 Months Ended

Mar. 31, 2018

Debt Disclosure [Abstract]

Debt and Financing Arrangements

Debt and Financing Arrangements

On September 27, 2013, the Company entered into a Credit Agreement (“Credit Agreement”) with certain banks and agents.

Pursuant to the Credit Agreement, the Company is the borrower under a $150 million senior revolving credit facility (“Revolver”) and a $150 million term loan facility (“Term Loan”). Under the terms of the Credit Agreement, the Company is entitled, to further request an additional aggregate principal amount of up to $75 million, subject to the satisfaction of certain conditions. In addition, the Company is entitled to the benefit of swing loans from amounts otherwise available under the Revolver in the aggregate principal amount of up to $20 million and to request Letters of Credit from amounts otherwise available under the Revolver in the aggregate principle amount up to $20 million, both subject to certain conditions. The obligations of the Company under the Credit Agreement are not secured, but are subject to certain covenants. The Revolver expires and the Term Loan matures on September 27, 2018. 

During the three months ended March 31, 2018, the Company made principal repayments of $28.0 million, plus accrued interest, on the Term Loan and Revolver. The aforementioned payments include a payment made by the Company of $26.1 million on the Term Loan during the first quarter of 2018, which was in addition to scheduled amounts due. The Company used cash and cash equivalents to fund the payments. As of March 31, 2018, there was no outstanding balance on the Revolver. Under current terms of the Term Loan, the Company is required to make principal repayments of  $7.5 million annually. As of March 31, 2018, $50.0 million was outstanding under the Term Loan.

As of March 31, 2018, the borrowing rate on both its Term Loan and Revolver are derived from the one month LIBOR, and based on the Company's leverage ratio as of March 31, 2018 the interest rate on its borrowings is equal to 2.88%. Interest expense is netted within the "Other, net" section of the Condensed Consolidated Statements of Income, and interest expense associated with the Term Loan and Revolver was $0.5 million during the three months ended March 31, 2018, and $0.9 million during the three months ended March 31, 2017, respectively.

The Credit Agreement contains customary representations and warranties and certain covenants that place certain limitations on the Company.

As of  March 31, 2018, the Company was in compliance with its covenants under the Credit Agreement.