Credit Facilities

9 Months Ended

Jun. 30, 2023

Debt Disclosure [Abstract]

Credit Facilities

Credit FacilitiesA summary of our credit facilities as of June 30, 2023 and September 30, 2022 is as follows (in millions):

June 30, 2023				September 30, 2022
Arrangement	Loan Balance		Interest	Arrangement	Loan Balance		Interest
Secured term loan (a) due December 8, 2027	$	179.3	SOFR* + 4.2%	Secured term loan due September 30, 2025	$	22.0	LIBOR + 2.5%
Secured revolving line of credit (b) due December 8, 2027	$	16.4	SOFR* + 4.2%	Secured Revolving line of Credit due September 20, 2025	$	—	LIBOR + 2.5%

*Secured Overnight Financing Rate ("SOFR") as of June 30, 2023 was 5.2%.

On September 30, 2019, we executed a floating-to-fixed interest rate swap with First National Bank ("FNB") as counter-party. The notional amount in the floating-to-fixed interest rate swap as of June 30, 2023 is $16.2 million matures in 2024, and the fixed rate is 1.61%. On January 31, 2023, we executed an additional floating-to-fixed interest rate swap with FNB; the notional amount as of June 30, 2023 is $96.0 million, it matures in January 2026, and the fixed rate is 4.10% The total floating-to-fixed swap balance as of June 30, 2023 is $112.2 million. As a result of entering these agreements, for the nine months ended June 30, 2023, interest expense has been decreased by approximately $0.6 million.

(a) Represents the principal amounts payable on our term loan, which is secured by liens on substantially all of the assets of the Company. The principal of the term loan is payable in quarterly installments with the remaining balance due on December 8, 2027.

The Credit Agreement requires compliance with a number of financial covenants and contains restrictions on our ability to engage in certain transactions. Among other matters, we must comply with limitations on the following: granting liens; incurring other indebtedness; maintenance of assets; investments in other entities and extensions of credit; mergers and consolidations; and changes in nature of business. The loan agreement also requires us to comply with certain quarterly financial covenants including: (i) a minimum fixed charge coverage ratio of at least 1.25 to 1.00, and (ii) a total leverage ratio not exceeding the ratio of 4.50:1.0 to 2.00:1.0 through maturity. The total leverage ratio is calculated by dividing the Company's total interest-bearing debt by net income adjusted to exclude (i) interest and other expenses, (ii) provision for or benefit from income taxes, if any, (iii) depreciation and amortization, and (iv) non-cash charges, losses or expenses, including stock-based compensation, and (v) non-recurring charges, losses or expenses to include transaction and non-cash equity expense. We are in compliance with all loan covenants and restrictions.

We are required to pay quarterly amortization payments, which commenced in December 2022. The annual amortization amounts are $14.3 million each for fiscal years 2023 and 2024, $19.0 million each for fiscal years 2025 and 2026, and $23.8 million for fiscal year 2027, with the remaining unpaid loan balance due at maturity in December 2027. The quarterly payments are equal installments. The Company made a mandatory prepayment of $3.6 million during the quarter ended June 30, 2023 bringing the outstanding principal balance on the secured term loan to $179.3 million. We have satisfied mandatory principal amortization until June 30, 2023.

In addition to quarterly payments of the outstanding indebtedness, the loan agreement also requires annual payments of a percentage of excess cash flow, as defined in the loan agreement. The loan agreement states that an excess cash flow recapture payment must be made equal to (a) 75% of the excess cash flow for the immediately preceding fiscal year in which the total leverage ratio is greater than or equal to 2.50:1.0; (b) 50% of the excess cash flow for the immediately preceding fiscal year in which the total leverage ratio is less than 2.50:1.0 but greater than or equal to 1.5:1.0; or (c) 0% of the excess cash flow for the immediately preceding fiscal year in which the total leverage ratio is less than 1.5:1.0. In addition, the Company must make additional mandatory prepayment of amounts outstanding based on proceeds received from asset sales and sales of certain indebtedness. For additional information regarding the schedule of future payment obligations, please refer to Note 11. Commitments and Contingencies.

(b) The secured revolving line of credit has a ceiling of up to $70.0 million; as of June 30, 2023 we had unused borrowing capacity of $32.9 million, which is net of outstanding letters of credit. Borrowing on the line of credit is secured by liens on substantially all of the assets of the Company. The Company accessed funds from the revolving credit facility during the quarter and had an outstanding balance at June 30, 2023 of $16.4 million.

The Company's total borrowing availability, based on eligible accounts receivable at June 30, 2023, was $32.9 million. As part of the revolving credit facility, the lenders agreed to a sublimit of $10.0 million for letters of credit for the account of the Company, subject to applicable procedures.The revolving line of credit has a maturity date of December 8, 2027 and is subject to loan covenants as described above. The Company is fully compliant with those covenants.