Debt and Credit Agreements

12 Months Ended

Dec. 31, 2024

The Company's long-term debt consists of the following:



(In thousands)	December 31 2024		December 31 2023
Senior Secured Credit Facilities (a):
Term Loan with an interest rate of 6.72% and 7.72% at December 31, 2024 and 2023, respectively	$	482,500	$	487,500


Revolving Credit Facility with an average interest rate of 6.49% and 8.12% at December 31, 2024 and 2023, respectively	407,000		422,000
5.75% Senior Notes	475,000		475,000
Other financing payable (including finance leases) in varying amounts due principally through 2030 with a weighted-average interest rate of 7.14% and 6.11% at December 31, 2024 and 2023, respectively	79,917		44,469
Total debt obligations	1,444,417		1,428,969
Less: deferred financing costs	(12,695)		(11,974)
Total debt obligations, net of deferred financing costs	1,431,722		1,416,995
Less: current maturities of long-term debt	(21,004)		(15,558)
Long-term debt	$	1,410,718	$	1,401,437

(a) The current portion of long-term debt related to the Senior Secured Credit Facilities was $5.0 million with the remainder reflected as Long-term debt at December 31, 2024 and 2023.

The maturities of long-term debt for the four years following December 31, 2025 are as follows:


(In thousands)
2026	$	50,019
2027	494,421
2028	480,873
2029	387,026

Cash payments for interest on debt were $109.5 million, $101.5 million and $73.4 million in 2024, 2023 and 2022, respectively.

On February 14, 2025, the Company entered into an amendment to the credit agreement to reset the levels of its covenants, among other changes. The Company obtained the amendment because its forward-looking projections indicated that it may not meet the minimum level required by the interest coverage ratio. As a result of this amendment, the total Net Debt to Consolidated Adjusted EBITDA ratio covenant was set to 4.75x for the quarters ended December 31, 2024 and March 31, 2025, 5.00x for the quarters ended June 30, 2025 and September 30, 2025, and then decreases every six months by 0.25x until reaching 4.00x for the quarter ended June 30, 2027 and thereafter. The interest coverage ratio was set at 2.75x for the quarter ended December 31, 2024 and 2.50x for each quarter after. The Company continues to expect that it will continue to maintain compliance with the amended covenants.

In September 2024, the Company amended its Senior Secured Credit Facilities to, among other things, extend the term of the Revolving Credit Facility to September 5, 2029 and adjust the limit to $625.0 million. In addition, the Company retained $50.0 million of its existing revolving commitments which mature on March 10, 2026. The extended Revolving Credit Facility bears interest at a rate, depending on total net leverage, ranging from 75 to 125 basis points over base rate or 175 to 225 basis points over SOFR and the existing Revolving Credit Facility bears interest at a rate, depending on total net leverage, ranging from 50 to 175 basis points over base rate or 150 to 275 basis points over SOFR, in each case, subject to zero floor. The Company expensed $0.3 million of previously recorded deferred financing costs and capitalized $4.4 million of fees incurred related to the amendment.

Also as a result of this amendment, the net debt to consolidated adjusted EBITDA ratio covenant is 4.75x for the quarter ended September 30, 2024, and decreases to 4.50x for the quarter ended June 30, 2025, 4.25x for the quarter ended December 31, 2025 and 4.00x thereafter. The Company's required coverage of consolidated interest charges is set at a minimum of 2.75x through the end of 2024 and increases to 3.00x beginning with the first quarter of 2025.

At December 31, 2024, the Company was in compliance with all covenants for its Senior Secured Credit Facilities, as amended in February 2025, as the total Net Debt to Consolidated Adjusted EBITDA ratio was 4.07x and the total interest coverage ratio was 3.05x. Based on balances and covenants in effect at December 31, 2024, the Company could increase Net Debt by $227.6 million and still be in compliance with these debt covenants. Alternatively, Consolidated Adjusted EBITDA could decrease by $33.1 million or interest expense could increase by $12.1 million and the Company would remain in compliance with these covenants.

The Company believes it will continue to maintain compliance with these amended covenants based on its current outlook. However, the Company's estimates of compliance with these covenants could change in the future with a deterioration in economic conditions, higher than forecasted interest rates, the timing of working capital including the collection of receivables, an inability to realize increased pricing and implement cost reduction initiatives, principally in CE, that mitigate the impacts of inflation and other factors that may adversely impact its compliance with covenants.

The Company's Credit Agreement imposes certain restrictions including, but not limited to, restrictions as to types and amounts of debt of liens that may be incurred by the Company; limitations on increases in dividend payments; limitations on repurchases of the Company's stock and limitations on certain acquisitions by the Company.

With respect to the Senior Secured Credit Facilities, the obligations of the Company are guaranteed by substantially all of the Company’s current and future wholly-owned domestic subsidiaries (“Guarantors”). All obligations under the Senior Credit Facility, and the guarantees of those obligations, are secured, subject to certain exceptions, by substantially all of the Company’s assets and the assets of the Guarantors.

The Credit Agreement requires certain mandatory prepayments of the Term Loan, subject to certain exceptions, based on net cash proceeds of certain sales or distributions of assets, as well as certain casualty and condemnation events, in some cases subject to reinvestment rights and certain other exceptions; net cash proceeds of any issuance of debt, excluding permitted debt issuances; and a percentage of excess cash flow, as defined by the Credit Agreement, during a fiscal year.

Facility Fees and Debt-Related Income (Expense)

The components of the Consolidated Statements of Operations caption Facility fees and debt-related income (expense) were as follows:


	Years Ended December 31
(In thousands)	2024		2023		2022
Gain (loss) on extinguishment of debt	$	(325)	$	—	$	2,254
Unused debt commitment and amendment fees	—		(12)		(1,696)
Securitization and factoring fees	(10,940)		(10,750)		(3,514)
Facility fees and debt-related income (expense)	$	(11,265)	$	(10,762)	$	(2,956)

Revolving Credit Facility

The following table shows the amount outstanding under the Revolving Credit Facility and available credit at December 31, 2024.



	December 31, 2024
(In thousands)	Facility Limit		Outstanding Balance		Outstanding Letters of Credit		Available Credit
Revolving Credit Facility	$	675,000	$	407,000	$	29,846	$	238,154

Other

Short-term borrowings totaled $8.1 million and $14.9 million at December 31, 2024 and 2023, respectively. At December 31, 2024 and 2023, Short-term borrowings consisted primarily of bank overdrafts and other third-party debt. The weighted-average interest rate for short-term borrowings at December 31, 2024 and 2023 was 6.09% and 6.10%, respectively.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

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+ Details

ENVIRI Corp 10-K