Quarterly report pursuant to Section 13 or 15(d)

Debt

v3.24.3
Debt
 9 Months Ended
Sep. 30, 2024
Debt Disclosure [Abstract]  
Debt

NOTE 4. DEBT

Debt is comprised of the following:

 

 

September 30,
2024

 

 

December 31,
2023

 

ProFrac Holding Corp.:

 

 

 

 

 

 

2029 Senior Notes

 

$

596.2

 

 

$

520.0

 

2022 ABL Credit Facility

 

 

163.0

 

 

 

117.4

 

Equify Notes (1)

 

 

14.6

 

 

 

18.6

 

Finance lease obligations

 

 

6.9

 

 

 

8.6

 

Other

 

 

12.4

 

 

 

10.2

 

ProFrac Holding Corp. principal amount

 

 

793.1

 

 

 

674.8

 

Less: unamortized debt discounts, premiums, and issuance costs

 

 

(16.1

)

 

 

(17.4

)

Less: current portion of long-term debt

 

 

(85.8

)

 

 

(46.2

)

ProFrac Holding Corp. long-term debt, net

 

 

691.2

 

 

 

611.2

 

 

 

 

 

 

 

 

Alpine Subsidiary:

 

 

 

 

 

 

Alpine 2023 Term Loan

 

 

355.0

 

 

 

365.0

 

Monarch Note

 

 

21.9

 

 

 

54.7

 

Other

 

 

0.8

 

 

 

—

 

Finance lease obligations

 

 

8.7

 

 

 

2.1

 

Alpine principal amount

 

 

386.4

 

 

 

421.8

 

Less: unamortized debt discounts, premiums, and issuance costs

 

 

(16.0

)

 

 

(22.0

)

Less: current portion of long-term debt

 

 

(77.9

)

 

 

(71.6

)

Alpine long-term debt, net

 

 

292.5

 

 

 

328.2

 

 

 

 

 

 

 

 

Flotek Subsidiary:

 

 

 

 

 

 

Flotek ABL credit facility

 

 

1.4

 

 

 

7.5

 

Flotek other

 

 

0.1

 

 

 

0.2

 

Flotek principal amount

 

 

1.5

 

 

 

7.7

 

Less: current portion of long-term debt

 

 

(1.5

)

 

 

(7.6

)

Flotek long-term debt, net

 

 

—

 

 

 

0.1

 

 

 

 

 

 

 

 

Other Subsidiaries:

 

 

 

 

 

 

Revolving credit facility

 

 

5.3

 

 

 

—

 

Finance lease obligations

 

 

6.4

 

 

 

—

 

Other

 

 

13.0

 

 

 

3.6

 

Other subsidiaries principal amount

 

 

24.7

 

 

 

3.6

 

Less: unamortized debt discounts, premiums, and issuance costs

 

 

(0.4

)

 

 

—

 

Less: current portion of long-term debt

 

 

(6.7

)

 

 

(1.0

)

Other subsidiaries long-term debt, net

 

 

17.6

 

 

 

2.6

 

 

 

 

 

 

 

 

Consolidated:

 

 

 

 

 

 

Total principal amount

 

 

1,205.7

 

 

 

1,107.9

 

Less: unamortized debt discounts, premiums, and issuance costs

 

 

(32.5

)

 

 

(39.4

)

Less: current portion of long-term debt

 

 

(171.9

)

 

 

(126.4

)

Total long-term debt, net

 

$

1,001.3

 

 

$

942.1

 
(1)
Related party debt agreements.

Senior Secured Notes Due 2029

In June 2024, ProFrac Holdings II, LLC, a Texas limited liability company and an indirect wholly-owned subsidiary of ProFrac Holding Corp., issued an additional $120 million aggregate principal amount of its 2029 Senior Notes at par to Beal Bank and Beal Bank USA in connection with our acquisition of AST. These notes were issued as additional notes pursuant to the original indenture as amended. These new notes and the notes previously issued under the indenture will be treated as a single series of securities under the indenture and the new notes will have substantially identical terms, other than the issue date, issue price and first payment date, as the existing notes and be secured by a security interest in the same collateral.

During the nine months ended September 30, 2024, we made principal payments of $43.8 million on our 2029 Senior Notes.

ABL Credit Facility

As of September 30, 2024, the maximum availability under the ABL Credit Facility was limited to our eligible borrowing base of $266.4 million with $163.0 million of borrowings outstanding and $14.7 million of letters of credit outstanding, resulting in approximately $88.7 million of remaining availability.

Monarch Note

During the nine months ended September 30, 2024, we made principal payments of $32.8 million on the Monarch Note.

Equify Note

During the nine months ended September 30, 2024, we made principal payments of $4.0 million on the Equify Notes.

Other Subsidiary Debt

In connection with our acquisition of BPC, we assumed debt related to a revolving credit facility of $5.0 million, finance lease obligations for real estate of $6.5 million, and a note payable for real estate of $9.4 million.

Debt Compliance

Both the 2029 Senior Notes and the ABL Credit Facility contain certain customary representations and warranties and affirmative and negative covenants. As of September 30, 2024, we were in compliance with these covenants and expect to be compliant for at least the next twelve months.

The Alpine 2023 Term Loan originally contained a covenant commencing with the fiscal quarter ending September 30, 2024, requiring Alpine not to exceed a maximum Total Net Leverage Ratio (as defined in the Alpine Term Loan Credit Agreement) of 2.00 to 1.00. This ratio is generally the consolidated total debt of Alpine divided by Alpine's adjusted EBITDA. In the second quarter of 2024, this covenant was amended to commence testing compliance with the Total Net Leverage Ratio with the fiscal quarter ending on September 30, 2025. As a result of Alpine’s lower than expected operating results in 2024, Alpine is closely monitoring its forthcoming compliance obligations with this covenant. While there can be no assurance, Alpine believes that it will be able to meet, modify, or further defer this debt covenant.

Restricted Assets

Our Alpine 2023 Term Loan requires us to segregate collateral associated with our Alpine subsidiary, which comprises our proppant production segment, and limits our ability to use Alpine's cash or assets to satisfy our obligations or the obligations of our other subsidiaries. We also have limited ability to provide Alpine with liquidity to satisfy its obligations. See “Note 12. Business Segments” for certain financial information for Alpine.