Annual report pursuant to Section 13 and 15(d)

Debt

v3.23.3
Debt
 12 Months Ended
Sep. 30, 2023
Debt Disclosure [Abstract]  
Debt Debt
The Company maintains credit facilities to finance acquisitions, to fund the purchase of real estate, construction equipment, plants and other fixed assets, and for general working capital purposes. Debt at September 30, 2023 and 2022 consisted of the following (in thousands):
September 30,
2023 2022
Long-term debt:
Term Loan $ 283,750  $ 271,875 
Revolving Credit Facility 93,100  105,100 
Total long-term debt 376,850  376,975 
Deferred debt issuance costs, net (1,110) (1,409)
Current maturities of long-term debt (15,000) (12,500)
Long-term debt, net of current maturities and debt issuance costs $ 360,740  $ 363,066 

Since 2017, the Company and each of its subsidiaries have been parties to a credit agreement with PNC Bank, National Association (successor in interest to BBVA USA) and certain other lenders party from time to time thereto (as amended, the “Credit Agreement”). The Credit Agreement has been amended and restated on multiple occasions since its inception in order to provide for changes in the economic terms of the credit facility and developments at the Company. The obligations of the Company and its subsidiaries under the Credit Agreement are secured by a first priority security interest in substantially all of the Company’s assets.
The Credit Agreement provides for (i) a term loan facility in an initial aggregate principal amount of $250.0 million (the “Term Loan”) the full amount of which was drawn at closing, (ii) a revolving credit facility in an initial aggregate principal amount of $325.0 million, (the “Revolving Credit Facility”), and (iii) a delayed draw term loan facility in an initial aggregate principal amount of $50.0 million (the “Delayed Draw Term Loan” and together with the Term Loan, the “Term Loans”).
At September 30, 2023 and 2022, there was $283.8 million and $271.9 million, respectively, of principal outstanding under the Term Loans, $93.1 million and $105.1 million, respectively, of principal outstanding under the Revolving Credit Facility, and availability of $222.1 million and $208.6 million, respectively, under the Revolving Credit Facility, including a reduction for outstanding letters of credit.
All outstanding advances under the Term Loans and Revolving Credit Facility are due and payable in full on June 30, 2027 (the “Maturity Date”). The Term Loan (commencing on September 30, 2022) and the Delayed Draw Term Loan (commencing on
September 30, 2023) will amortize in quarterly installments in an amount (subject, in each case, to adjustments for prior mandatory and voluntary prepayments of principal) equal to: (a) 1.25% of the original principal and continuing on each of the following eleven quarter-end payment dates; (b) 1.875% of the original principal on each of the next eight quarter-end payment dates; and (c) all remaining principal of the Term Loans are due and payable in full on the Maturity Date. The annual interest rates applicable to advances will be calculated, at the Company’s option, by using either a base rate, Daily Simple SOFR plus 0.10%, or Term SOFR plus 0.10%, and in each case, plus an applicable margin percentage that corresponds to the Company’s consolidated net leverage ratio. Subject to various requirements, the Company generally may (and, under certain circumstances, must) prepay all or a portion of the outstanding balance of the advances, together with accrued interest thereon, prior to their contractual maturity.
The Credit Agreement contains customary negative covenants for agreements of this type, including, but not limited to, restrictions on the Company’s ability to make acquisitions, make loans or advances, make capital expenditures and investments, pay dividends, create or incur indebtedness, create liens, wind up or dissolve, consolidate, merge or liquidate, or sell, transfer or dispose of assets. The Credit Agreement also requires the Company to satisfy certain financial covenants, including a minimum fixed charge coverage ratio of 1.20-to-1.00 and a maximum consolidated leverage ratio of 3.50-to-1.00, subject to certain adjustments. At September 30, 2023 and 2022, the Company’s fixed charge coverage ratio was 2.56-to-1.00 and 2.56-to-1.00, respectively, and the Company’s consolidated leverage ratio was 1.72-to-1.00 and 2.79-to-1.00, respectively. At both September 30, 2023 and 2022, the Company was in compliance with all covenants under the Credit Agreement.
From time to time, the Company has entered into interest rate swap agreements to hedge against the risk of changes in interest rates. At September 30, 2023 and 2022, the aggregate notional value of these interest rate swap agreements was $300.0 million and the fair value was $26.9 million and $24.7 million, respectively, which is included within other assets on the Company’s Consolidated Balance Sheets.
The scheduled contractual repayment terms of long-term debt at September 30, 2023 are as follows:
Fiscal Year Amount
2024 15,000 
2025 18,750 
2026 22,500 
2027 320,600 
Total 376,850 
Interest expense was $18.7 million, $7.9 million and $2.5 million for the fiscal years ended September 30, 2023, 2022 and 2021, respectively. Amortization of deferred debt issuance costs included in interest expense was $0.3 million, $0.2 million and $0.3 million for the fiscal years ended September 30, 2023, 2022 and 2021, respectively.