ROCKY BRANDS, INC. Debt Disclosure

7. LONG-TERM DEBT

 

On  April 26, 2024, we refinanced our existing debt by amending and restating our credit agreement with Bank of America, N.A., as agent, sole lead arranger and sole bookrunner and other lenders party thereto (the "ABL Agreement"). The ABL Agreement consists of a $175.0 million asset-based lending credit facility (the "ABL Facility") and a $50.0 million term loan facility (the "Term Facility"). The ABL Agreement is collateralized by a first-lien on substantially all of the Company's domestic assets. The ABL Facility includes a separate first in, last out (FILO) tranche, which allows the Company to borrow at higher advance rates on eligible accounts receivables and inventory balances. As of  December 31, 2025, we had borrowing capacity of $39.5 million under the ABL Facility. The Term Facility provides for monthly principal payments until the date of maturity, at which date the remaining principal balance is due.

 

The refinance resulted in a $2.6 million expense within Interest Expense and Other - net in the accompanying Consolidated Statements of Operations, consisting of a $1.1 million loss on term loan extinguishment and a $1.5 million term loan prepayment penalty for the twelve months ended December 31, 2024. The $1.1 million loss on term loan extinguishment is included as a noncash adjustment to net income and the $1.5 million prepayment penalty is included within Repayments of long-term debt in the accompanying Consolidated Statements of Cash Flows for the twelve months ended  December 31, 2024.

 

Loans under the ABL Agreement bear interest at a variable rate equal to either (i) the Base Rate (as calculated in the ABL Agreement) or (ii) Term SOFR (as calculated in the ABL Agreement), plus in each case an interest margin determined by the Company's average daily availability as a percentage of the aggregate amount of revolving commitments for revolving loans and term loans, with a range of Base Rate margins and term SOFR margins, as set forth of the following chart: 

 

Revolver Pricing Level	Average Availability as a Percentage of Commitments		Term SOFR Term Loan				Base Rate Term Loan				Term SOFR Revolver Loan				Base Rate Revolver Loan				Term SOFR FILO Loan				Base Rate FILO Loan
I	> 66.7%			2.75	%			1.50	%			1.25	%			0.00	%			1.75	%			0.50	%
II	>33.3% and < or equal to 66.7%			3.00	%			1.50	%			1.50	%			0.00	%			2.00	%			0.50	%
III	< or equal to 33.3%			3.25	%			1.75	%			1.75	%			0.25	%			2.25	%			0.75	%

 

In connection with the ABL Agreement, we paid certain fees that were capitalized and will be amortized over the life of such agreement. 

 

Current and long-term debt under the ABL Agreement consisted of the following as of December 31:

 

		December 31,				December 31,
($ in thousands)		2025				2024
Term Facility that matures in 2029 with an effective interest rate of 7.50% as of December 31, 2025, and 10.47% as of December 31, 2024		$	26,762			$	35,123
ABL Facility that matures in 2029:
SOFR borrowings with an effective interest rate of 5.62% as of December 31, 2025, and 6.24% as of December 31, 2024			94,300				91,300
Prime borrowings with an effective interest rate of 7.16% as of December 31, 2025, and 7.77% as of December 31, 2024			3,321				4,577
Total debt			124,383				131,000
Less: Unamortized debt issuance costs			(1,741	)			(2,263	)
Total debt, net of debt issuance costs			122,642				128,737
Less: Debt maturing within one year			(8,361	)			(8,361	)
Long-term debt		$	114,281			$	120,376

 

Contractual maturities of total debt are as follows: