Quarterly report pursuant to Section 13 or 15(d)

Debt

v3.24.3
Debt
 9 Months Ended
Sep. 30, 2024
Debt Disclosure [Abstract]  
Debt

8. Debt

Long-term debt consisted of the following as of the periods presented:

 

As of

 

September 30, 2024

 

 

December 31, 2023

 

First lien term loan

$

922,688

 

 

$

901,201

 

Revolving line of credit

 

22,000

 

 

 

-

 

Total debt

 

944,688

 

 

 

901,201

 

Less: unamortized discount and debt issuance costs

 

(4,392

)

 

 

(3,777

)

Less: current maturities of long-term debt

 

(9,250

)

 

 

-

 

Total long-term portion of debt, net

$

931,046

 

 

$

897,424

 

As of September 30, 2024, annual maturities of debt were as follows:

Fiscal Year Ending:

 

 

 

 

2024 (remaining three months)

 

 

$

2,313

 

2025

 

 

 

9,250

 

2026

 

 

 

9,250

 

2027

 

 

 

9,250

 

2028

 

 

 

9,250

 

Thereafter

 

 

 

905,375

 

Total maturities of debt

 

 

$

944,688

 

 

As of September 30, 2024 and December 31, 2023, unamortized discount and debt issuance costs were $6,444 and $4,030, respectively, and accumulated amortization of debt issuance costs was $3,746 and $6,145, respectively.

For the three months ended September 30, 2024 and 2023, the amortization of debt issuance costs in interest expense, net in the consolidated statements of operations was approximately $248 and $428, respectively.

For the nine months ended September 30, 2024 and 2023, the amortization of debt issuance costs in interest expense, net in the consolidated statements of operations was approximately $961 and $1,270, respectively.

Amended and Restated First Lien Credit Agreement

On August 21, 2014, we entered into a Credit Agreement (“Credit Agreement”) which was originally comprised of a term loan (“First Lien Term Loan”) and a revolving commitment (“Revolving Commitment”). The Credit Agreement was collateralized by substantially all personal property (including cash, inventory, property and equipment, and intangible assets), real property, and equity interests owned by us.

First Lien Term Loan

In March 2024, we entered into Amendment No. 5 to the Amended and Restated First Lien Credit Agreement with the lenders party thereto, and Bank of America, N.A. ("BofA") as the successor administrative agent and collateral agent. This amendment further modified the credit agreement by providing $925,000 in first lien term commitments, consisting of $901,201 to refinance outstanding term loans and $23,799 in additional incremental term commitments (collectively, the "2024 Term Loans"). The 2024 Term Loans have an interest rate of Term SOFR or Base Rate, at our option, plus an applicable margin (3.00% for SOFR Loans or 2.00% for Base Rate Loans), subject to step-downs based on the First Lien Net Leverage Ratio. For SOFR Loans, the margin starts at 3.00% and can decrease to 2.75% and 2.50% based on the First Lien Net Leverage Ratio. For Base Rate Loans, the margin begins at 2.00% and can decrease to 1.75% and 1.50%, depending on the First Lien Net Leverage Ratio. The SOFR rate has a floor of 0.00%. Starting September 30, 2024, the loans will be amortized in equal quarterly installments at an annual rate of 1.00% of the original principal amount. As a result of this amendment, the loans are scheduled to mature in March 2031. In connection with Amendment No. 5, we expensed $1,882 of previously unamortized debt issuance costs as a loss on extinguishment of debt in the consolidated statements of operations.

Revolving Commitment

In March 2024, we entered into Amendment No. 5 to our Amended and Restated First Lien Credit Agreement to increase our borrowing capacity from $150,000 to $300,000. The amendment also updates the interest rate for these loans to SOFR or Base Rate, at our option, plus an applicable margin (2.50% for SOFR Loans or 1.50% for Base Rate Loans), subject to step-ups and step-downs based on the First Lien Net Leverage Ratio. Any unused commitment fee is also payable based on the First Lien Net Leverage Ratio. The Credit Agreement requires the Borrower to maintain a Rent Adjusted Total Net Leverage Ratio no greater than 6.50 to 1.00, tested quarterly beginning with the quarter ending September 30, 2024, for the benefit of lenders holding the Revolving Commitments. The Amendment also extends the time in which we can draw revolving loans under the Revolving Commitments until the earliest of March 2029, permanent reduction of commitments to zero or termination of the commitment.

The maximum available borrowing capacity under the Revolving Commitments is reduced by outstanding letters of credit under the Revolving Commitments. As of September 30, 2024 and December 31, 2023, the available borrowing capacity under the Revolving Commitments was $277,785 and $149,193, respectively.

In addition, an unused commitment fee based on our First Lien Net Leverage Ratio is payable on the average of the unused borrowing capacity under the Revolving Commitments. As of September 30, 2024 and December 31, 2023, the unused commitment fee was 0.25%.

Standby Letters of Credit

As of September 30, 2024, we have a letter of credit sublimit of $90,000 under the Revolving Commitments, provided that the total utilization of revolving commitments under the Revolving Commitment does not exceed $300,000. Any letter of credit issued under the Amended and Restated Credit Agreement has an expiration date which is the earlier of (i) no later than 12 months from the date of issuance or (ii) five business days prior to the maturity date of the Revolving Commitments, as amended under Amendment No. 2 to the Amended and Restated First Lien Credit Agreement. Letters of credit under the Revolving Commitments reduce the maximum available borrowing capacity under the Revolving Commitment. As of September 30, 2024 and December 31, 2023, the amounts associated with outstanding letters of credit were $215 and $807, respectively.

Credit Agreement

We were in compliance with all covenants related to our long-term debt as of September 30, 2024.