LONG-TERM DEBT AND LONG-TERM OBLIGATIONS |
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| Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| LONG-TERM DEBT AND LONG-TERM OBLIGATIONS | LONG-TERM DEBT AND LONG-TERM OBLIGATIONS Senior Secured Credit Facilities
As of December 31, 2020, the Company had (i) no outstanding borrowings under the senior secured revolving credit facility (the “Revolving Facility”) and (ii) approximately $46.6 million in borrowings outstanding under the senior secured term loan facility (the “Term Loan Facility” and, together with the Revolving Facility, the “Credit Facilities”), in each case, provided by the amended and restated credit agreement, dated as of October 1, 2014 (as amended, the “ARC Agreement”), entered into by TOCCO, SHR, GSPL and TC (SHR, GSPL and TC collectively the “Guarantors”). As of December 31, 2020, the Company had approximately $52.4 million of availability under our Revolving Facility (which has aggregate commitments of $75.0 million under the ARC Agreement). TOCCO’s ability to make additional borrowings under the Revolving Facility at December 31, 2020 was limited by, and in the future may be limited by, the Company’s obligation to maintain compliance with the covenants contained in the ARC Agreement (including maintenance of a maximum Consolidated Leverage Ratio and minimum Consolidated Fixed Charge Coverage Ratio (each as defined in the ARC Agreement)).
The maturity date for the ARC Agreement is July 31, 2023. Subject to the lenders acceptance of any increased commitment and other conditions, TOCCO has the option, at any time, to request an increase to the commitment under the Revolving Facility and/or the Term Loan Facility by an additional amount of up to $50.0 million in the aggregate.
Borrowings under each of the Credit Facilities bear interest on the outstanding principal amount at a rate equal to LIBOR plus an applicable margin of 1.25% to 2.50% or, at our option, the Base Rate plus an applicable margin of 0.25% to 1.50%, in each case, with the applicable margin being determined based on the Consolidated Leverage Ratio of TOCCO. A commitment fee between 0.20% and 0.375% is also payable quarterly on the unused portion of the Revolving Facility. As of December 31, 2020, the year to date effective interest rate for the Credit Facilities was 2.63%. Borrowings under the Term Loan Facility are subject to quarterly amortization payments based on a commercial style amortization method over a twenty year period; provided, that the final principal installment will be paid on the maturity date and will be in an amount equal to the outstanding borrowings under the Term Loan Facility on such date.
On May 8, 2020, TOCCO and the Guarantors entered into a Seventh Amendment to the ARC Agreement. Pursuant to the Seventh Amendment, certain amendments were made to the terms of the ARC Agreement, including, among other things, to (a) permit the incurrence of additional indebtedness in the form of loans (the “PPP Loans”) under the United States Small Business Administration Paycheck Protection Program (the “PPP”) and (b) exclude the PPP Loans from the calculation of the Consolidated Leverage Ratio until such time that any portion of the PPP Loans are not forgiven in accordance with the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”).
As of the end of each fiscal quarter, TOCCO must maintain a maximum Consolidated Leverage Ratio of 3.50 to 1.00 (subject to temporary increase following certain acquisitions). TOCCO’s Consolidated Leverage Ratio was 1.65 and 2.20 as of December 31, 2020 and December 31, 2019, respectively. Additionally, TOCCO must maintain a minimum Consolidated Fixed Charge Coverage Ratio as of the end of any fiscal quarter of 1.15 to 1.00. TOCCO’s Consolidated Fixed Charge Coverage Ratio was 1.80 and 2.56 as of December 31, 2020 and December 31, 2019, respectively. As noted above, the Consolidated Leverage Ratio specifically excludes the PPP Loans until such time that any portion of the PPP Loans are not forgiven in accordance with the CARES Act. The Company used a portion of the approximately $60 million in net proceeds from the Share Sale, discussed in Note 6, to prepay outstanding borrowings of $30 million under the Term Loan Facility of the Company’s ARC Agreement in September 2020.
The ARC Agreement contains a number of customary affirmative and negative covenants and the Company was in compliance with those covenants as of December 31, 2020.
Debt Issuance Costs
Debt issuance costs of approximately $0.9 million were incurred in connection with the fourth amendment to the ARC Agreement and the remaining debt issuance costs of $0.3 million from the previous agreements were expensed and are shown as a loss on the extinguishment of debt on the consolidated statements of operations for the year ended December 31, 2018. Unamortized debt issuance costs of approximately $0.5 million and $0.6 million for the years ended December 31, 2020 and December 31, 2019, have been netted against outstanding loan balances.
PPP Loans
On May 6, 2020, SHR and TC (collectively, the “Borrowers”) received loan proceeds from the PPP Loans in an aggregate principal amount of approximately $6.1 million under the PPP. The PPP Loans are evidenced by unsecured promissory notes each payable to Bank of America, N.A. The Borrowers fully utilized the PPP Loans to cover payroll and benefits costs in accordance with the relevant terms and conditions of the CARES Act. The PPP Loans mature on May 6, 2022, and bear interest at a stated rate of 1.0% per annum. The Company is pursuing and expects to receive full forgiveness of the PPP Loans in accordance with the provisions of the CARES Act.
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