Quarterly report pursuant to Section 13 or 15(d)

Debt and Credit Arrangements

v3.20.2
Debt and Credit Arrangements
9 Months Ended
Sep. 30, 2020
Debt Disclosure [Abstract]  
Debt and Credit Arrangements Debt and Credit Arrangements
    We have a Credit Agreement with JP Morgan Chase Bank ("JP Morgan"), Citibank, NA (“Citibank”), and Wells Fargo Bank, National Association (“Wells Fargo”). During the third quarter of 2020 we amended the terms of the Credit Agreement to extend the maturity date of the original agreement, reduce the aggregate value of the revolving facility, and amend certain covenants. The amended Credit Agreement provides for an aggregate $150.0 million of secured revolving credit facility. The Credit Agreement contains covenants, including covenants relating to maintenance of books and records, financial reporting and notification, compliance with laws, maintenance of properties and insurance, and limitations on guaranties, investments, issuance of debt, lease obligations and capital expenditures, and is secured by virtually all of our assets. The Credit Agreement provides for events of default, including failure to pay any principal or interest when due, failure to perform or observe covenants, bankruptcy or insolvency events and the occurrence of the event has a material adverse effect. We have no other significant credit facilities.
    In addition to the customary restrictive covenants listed above, the Credit Agreement also contains financial covenants that require us to maintain a certain leverage ratio and fixed charge coverage ratio, each as defined in the Credit Agreement:
Leverage Ratio, as defined, to be no higher than 3.25 to 1.00.
Interest Coverage Ratio, as defined, to be at least 1.75 to 1.00 at all times.
    At September 30, 2020, we were in compliance with the Leverage Ratio and the Interest Coverage Ratio covenants as defined in the Credit Agreement.
    During the first quarter of 2020 we drew an additional $60.0 million on our credit line as a precaution to ensure we have the necessary capital to continue to reliably serve our customers during an extended period of uncertainty. At September 30, 2020, we had $67.0 million outstanding under the Credit Agreement.
    Pursuant to the terms of the Credit Agreement, the outstanding principal balance will bear interest at either (a) a fluctuating rate per annum equal to the Applicable Rate, as defined in the Credit Agreement, depending on our leverage ratio plus the higher of (i) the federal funds rate plus one-half of one percent per annum; (ii) the prime rate in effect on such a day; and (iii) the LIBOR rate plus one percent, or (b) a fluctuating rate per annum of LIBOR Rate plus the Applicable Rate, which ranges between 2.25% to 3.50%. The effective interest rate during the nine months ended September 30, 2020 was 3.04%. The Credit Agreement matures on September 25, 2023, at which time all principal amounts outstanding under the Credit Agreement will be due and payable. As of September 30, 2020, we have classified $40.0 million of the $67.0 million outstanding as short-term on our balance sheet due to our intent to repay this portion over the next twelve months.
    Long-term debt consists of (in thousands):

  September 30, 2020 December 31, 2019
Revolving credit facility $ 67,000  $ 55,000 
Debt issuance costs (1,303) (335)
Less: current portion of long-term debt 40,000  35,000 
Total long-term debt $ 25,697  $ 19,665 
    
Maturities of long-term debt as of September 30, 2020 are as follows (in thousands):
  September 30, 2020 December 31, 2019
2020 $ —  $ — 
2021 —  55,000 
2022 —  — 
Thereafter 67,000  — 
Total $ 67,000  $ 55,000 
    
As of September 30, 2020, the carrying value of total debt approximated fair market value.