Transfers and Servicing

12 Months Ended

Dec. 31, 2023

Transfers and Servicing [Abstract]

Transfers and Servicing of Financial Assets

ACCOUNTS RECEIVABLE PURCHASE PROGRAM

On January 19, 2023, we entered into a revolving $150 million uncommitted receivables purchase agreement with Bank of The West ("BOW"), which was subsequently acquired by BMO in February 2023. This agreement provided for a less expensive form of capital. The discount rate applied to the sold receivables equals a rate per annum equal to the sum of (i) an applicable margin of 1.75%, plus (ii) Term SOFR for a period equal to the discount period which is calculated with respect to the payment terms of the specific receivable. The accounts receivable sold have payment terms ranging between 30 and 60 days, and are related to customer accounts with good credit history. The transfer of the purchased accounts receivable under the agreement is intended to be an absolute and irrevocable transfer constituting a true sale as the transferred receivables have been isolated beyond the reach of the Company and our creditors, even in bankruptcy or other receivership. We do not retain effective control over the sold receivables and BOW has the right upon purchase to pledge and/or exchange the transferred assets without restrictions. The Company acts as collection agent for BOW and collection services are undertaken by our accounts receivable personnel in their normal course of business and collected funds are remitted to BOW. We do not have any continuing involvement with the sold receivables other than the collection services which does not provide us with more than a trivial benefit. The discount rate has been negotiated net of consideration for the collection services, the cost of collection is immaterial to the Company; therefore, we did not separately record any related servicing assets or liabilities related to the sold receivables.

For the year ended December 31, 2023, the carrying value of trade receivables sold to BOW in connection with the purchase program was $629.1 million. In exchange for the sale of trade receivables, we received cash of $625.3 million. For the year ended December 31, 2023, the sale of the receivables resulted in a loss of $3.7 million, recorded in other expense, net in our consolidated statement of operations. For the year ended December 31, 2023, we have collected and remitted $553.2 million in cash to BOW. As of December 31, 2023, cash remaining to be collected on behalf of BOW was $75.9 million, which has been removed from our consolidated balance sheet as of December 31, 2023 and is reflected as cash provided by operating activities in the consolidated statement of cash flows. There were no such balances at December 31, 2022. The carrying value of the sold receivables approximated the fair value at December 31, 2023.