Annual report pursuant to Section 13 and 15(d)

Debt

v3.21.2
Debt
 12 Months Ended
Sep. 30, 2021
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, 2021 and 2020 consisted of the following (in thousands):

September 30,
2021 2020
Long-term debt:
Term Loan $ 197,500  $ 92,850 
Revolving Credit Facility 20,000  — 
Total long-term debt 217,500  92,850 
Deferred debt issuance costs (1,325) (797)
Current maturities of long-term debt (10,000) (13,000)
Long-term debt, net of current maturities $ 206,175  $ 79,053 

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 and restated, 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 Credit Agreement provides for a credit facility consisting of a term loan (the “Term Loan”) and a revolving credit facility (the “Revolving Credit Facility”). 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.
In June 2021, the Credit Agreement was amended and restated to provide for a Term Loan in an initial aggregate principal amount of $200 million and a Revolving Credit Facility in an initial aggregate principal amount of $225 million. Among other things, the proceeds of the Term Loan were used to refinance indebtedness of the Company that was outstanding immediately prior to the restatement. The Term Loan, inclusive of any incremental borrowings made in the form of a term loan, will amortize in quarterly installments commencing on September 30, 2021 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 amount of the Term Loan on September 30, 2021 and on each of the following eleven quarter-end payment dates, and (b) 1.875% of the original principal amount of the Term Loan on each of the next seven quarter-end payment dates. The annual interest rates applicable to advances will be calculated, at the Company’s option, by using either a base rate or LIBOR, in each case plus an applicable margin percentage that corresponds to the Company’s consolidated net leverage ratio. Upon the occurrence of certain triggering events relating to the end of the LIBOR reference rate, a different benchmark rate will be selected to replace LIBOR as the reference rate for interest accruing on certain advances. All outstanding advances under the Term Loan and Revolving Credit Facility are due and payable in full on June 24, 2026. 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.
At September 30, 2021 and 2020, there was $197.5 million and $92.9 million, respectively, of principal outstanding under the Term Loan, $20.0 million and $0.0 million, respectively, of principal outstanding under the Revolving Credit Facility, and availability of $193.7 million and $39.3 million, respectively, under the Revolving Credit Facility, including a reduction for outstanding letters of credit.
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 3.00-to-1.00, subject to certain adjustments. At September 30, 2021 and 2020, the Company’s fixed charge coverage ratio was 3.29-to-1.00 and 2.85-to-1.00, respectively, and the Company’s consolidated leverage ratio was 1.99-to-1.00 and 1.08-to-1.00, respectively. At both September 30, 2021 and 2020, 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, 2021 and 2020, the aggregate notional value of these interest rate swap agreements was $198.3 million and $46.5 million, respectively, and the fair value was $(0.8) million and $(1.7) million, respectively, which is included within other current liabilities or other long-term liabilities on the Company’s Consolidated Balance Sheets.
The scheduled contractual repayment terms of long-term debt at September 30, 2021 are as follows:
Fiscal Year Amount
2022 $ 10,000 
2023 10,000 
2024 11,250 
2025 15,000 
2026 171,250 
Total $ 217,500 
Interest expense was $2.5 million, $3.6 million and $3.3 million for the fiscal years ended September 30, 2021, 2020 and 2019, respectively. Amortization of deferred debt issuance costs and debt discounts included in interest expense was $0.3 million, $0.2 million and $0.1 million for the fiscal years ended September 30, 2021, 2020 and 2019, respectively.