Transfers and Servicing

3 Months Ended

Mar. 31, 2024

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, 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 BMO has the right upon purchase to pledge and/or exchange the transferred assets without restrictions. The Company acts as collection agent for BMO and collection services are undertaken by our accounts receivable personnel in their normal course of business and collected funds are remitted to BMO. 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.

The following table presents information in connection with the purchase program (in thousands):

	Three months ended March 31,
	2024		2023
Trade receivables sold(1)	$	175,692	$	139,606
Cash received in exchange for trade receivables sold(2)	174,600		138,829
Loss on sale of receivables(3)	1,092		777

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(1)    Represents carrying value of trade receivables sold to BMO.

(2)    Cash proceeds received from BMO.

(3) Reflected in other expense, net in our condensed consolidated statement of operations.

As of March 31, 2024 and December 31, 2023, cash remaining to be collected on behalf of BMO was $63.0 million and $75.9 million, respectively, which has been removed from our condensed consolidated balance sheets as of March 31, 2024 and December 31, 2023, respectively and is reflected as cash provided by operating activities in the condensed consolidated statement of cash flows in each respective period. The carrying value of the sold receivables approximated the fair value at March 31, 2024.