Quarterly report [Sections 13 or 15(d)]

Note 7 - Long-term Debt and Revolving Lines of Credit

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Note 7 - Long-term Debt and Revolving Lines of Credit
 3 Months Ended
Jan. 31, 2025
Notes to Financial Statements  
Debt Disclosure [Text Block]

Note 7. Long Term Debt and Revolving Lines of Credit

 

The table below is a summary of the composition of the Company’s debt balances as of  January 31, 2025 and October 31, 2024:

 

             

January 31,

    

October 31,

  

(in thousands)

  

Interest Rates

  

Maturities

  

2025

    

2024

  

ABL Facility - short term

  

Varies

  

September 2029

   $ -     $ 20  

Senior notes due 2026 - all long term

    

6.000%

  

February 2026

    

-

      

375,000

  

Senior notes due 2032 - all long term

    

7.500%

  

February 2032

    

425,000

      

-

  

Total debt, gross

               425,000       375,020  

Less: Unamortized deferred financing costs offsetting long term debt

               (7,945 )     (1,740 )

Less: Current portion

               -       (20 )

Long term debt, net of unamortized deferred financing costs

             $ 417,055     $ 373,260  

 

On January 31, 2025, Brundage-Bone Concrete Pumping Holdings Inc., a Delaware corporation (the "Issuer") and a wholly-owned subsidiary of the Company, closed its private offering of $425.0 million in aggregate principal amount of senior secured second lien notes due 2032 (the “2032 Notes”), issued pursuant to an indenture, among the Issuer, the Company, the other Guarantors (as defined below), Deutsche Bank Trust Company Americas, as trustee and as collateral agent (the "Indenture"). The 2032 Notes were issued at par and bear interest at a fixed rate of 7.500% per annum. The Issuer’s obligations under the 2032 Notes are jointly and severally guaranteed on a senior secured basis by the Company, Concrete Pumping Intermediate Acquisition Corp. and each of the Issuer’s domestic, wholly-owned subsidiaries that is a borrower or a guarantor under the ABL Facility (collectively, the "Guarantors"). The proceeds from the 2032 Notes were used to pay the redemption price for all of the Company's outstanding 6.000% senior secured second lien notes due 2026 (the “2026 Notes”) and to pay related fees and expenses thereto. In addition, the remainder of the net proceeds, together with cash on hand, were used to pay a special cash dividend of $1.00 per share of common stock of the Company on February 3, 2025.

 

The pay-off of the 2026 Notes was treated as a debt extinguishment. In accordance with debt extinguishment accounting rules, the Company recorded $1.4 million in debt extinguishment costs related to the write-off of all unamortized deferred debt issuance costs that were related to the 2026 Notes and capitalized $7.9 million of debt issuance costs related to the 2032 Notes.

 

Summarized terms of the 2032 Notes are as follows:

 

 

●

 Provides for an original aggregate principal amount of $425.0 million;
  ● The 2032 Notes will mature and be due and payable in full on February 1, 2032;
  ● The 2032 Notes bear interest at a rate of 7.500% per annum, payable on February 1st and August 1st of each year;
  ● The Notes are jointly and severally guaranteed on a senior secured basis by the Company, Concrete Pumping Intermediate Acquisition Corp. (“Intermediate Holdings”) and each of the Issuer’s domestic, wholly-owned subsidiaries (the “Guarantors”) that is a borrower under or guarantees the ABL Facility. The Notes and the guarantees will be secured on a second-priority basis by all the assets of the Issuer and the Guarantors that secure the obligations under the ABL Facility, subject to certain exceptions. The Notes and the guarantees will be the Issuer’s and the Guarantors’ senior secured obligations, will rank equally with all of the Issuer’s and the Guarantors’ existing and future senior indebtedness and will rank senior to all of the Issuer’s and the Guarantors’ existing and future subordinated indebtedness. The Notes will be structurally subordinated to all existing and future indebtedness and liabilities of the Company’s subsidiaries that do not guarantee the Notes.
  ● The Indenture contains certain covenants applicable to the Issuer and its restricted subsidiaries. These covenants limit, among other things, the Issuer’s ability and the ability of its restricted subsidiaries to: incur additional indebtedness and issue certain preferred stock; make certain investments, distributions and other restricted payments; create or incur certain liens; merge, consolidate or transfer all or substantially all assets; enter into certain transactions with affiliates; and sell or otherwise dispose of certain assets. These covenants are subject to important exceptions and qualifications.

 

The outstanding principal amount of the 2032 Notes as of January 31, 2025 was $425.0 million and as of that date, the Company was in compliance with all covenants under the Indenture.

 

On September 6, 2024, the ABL Facility was amended to, among other changes, (1) increase the maximum revolver borrowings available to be drawn thereunder from $225.0 million to $350.0 million, (2) increase the letter of credit sublimit from $22.5 million to $32.5 million and (3) extend the maturity of the ABL Facility to the earlier of (a) September 6, 2029 or (b) the date that is 180 days prior to (i) the final stated maturity date of the 2032 Notes or (ii) the date the 2032 Notes become due and payable. The ABL Facility also provides for an uncommitted accordion feature under which the borrowers under the ABL Facility can, subject to specified conditions, increase the ABL Facility by up to an additional $25.0 million. Of the $125.0 million in incremental commitments, $75.0 million was provided by Bank of America, N.A. and $50.0 million was provided by PNC Bank, N.A. The amended ABL Facility was treated as a debt modification. The Company capitalized an additional $1.2 million of debt issuance costs related to the September 6, 2024 ABL Facility amendment. The preexisting unamortized deferred costs of $1.4 million and the additional costs of $1.2 million will be amortized from September 6, 2024 through September 6, 2029.

 

There was no outstanding balance under the ABL Facility as of  January 31, 2025 and as of that date, the Company was in compliance with all debt covenants. Borrowings are generally in the form of short-term fixed rate loans that can be extended to mature on the earlier of (a) September 6, 2029 or (b) the date that is 180 days prior to (i) the final stated maturity date of the 2032 Notes or (ii) the date the 2032 Notes become due and payable. Amounts borrowed may be repaid at any time, subject to the terms and conditions of the agreement.

 

The Company utilizes the ABL Facility to support its working capital arrangement.

 

In addition, as of January 31, 2025 the Company had $1.1 million in credit line reserves and a letter of credit balance of $13.9 million.

 

As of January 31, 2025 we had $324.5 million of available borrowing capacity under the ABL Facility. Debt issuance costs related to revolving credit facilities are capitalized and reflected as an asset in deferred financing costs in the accompanying condensed consolidated balance sheets. The Company had debt issuance costs related to the revolving credit facilities of $2.4 million as of January 31, 2025.