Annual report [Section 13 and 15(d), not S-K Item 405]

Debt And Derivatives

v3.25.3
Debt And Derivatives
 12 Months Ended
Sep. 30, 2025
Debt Disclosure [Abstract]  
Debt And Derivatives DEBT AND DERIVATIVES
Our principal debt agreement is with J.P. Morgan Chase Bank, N.A. (the Credit Agreement). It is available for general corporate purposes, including the funding of working capital, capital expenditures and business acquisitions. The Credit Agreement has three components.
•A Term Loan A facility (the TLA), which matures on May 30, 2029. Interest rates on this facility are variable, based upon a combination of a Secured Overnight Financing Rate (SOFR) and a margin based on our leverage, varying between 1.0% and 2.0%.
•A Term Loan B facility (the TLB), which matures on May 30, 2031. The interest rates are based upon SOFR, subject to a floor of 0.5%, plus a fixed 2.0% margin.
•A revolving credit facility (the Revolver), which enables us to borrow or utilize up to $750.0 million. The interest on this facility is generally based upon the same rates as those used for the TLA. In addition, we are charged a commitment fee between 0.125% and 0.30% on unused funds, which is based upon our leverage. Commitment fees are recorded as interest expense on the consolidated statements of operations.
In addition to the Credit Agreement, we hold revolving credit facilities in Canada and the United Kingdom. These facilities are intended to allow our businesses to meet any short-term working capital needs.
Table 6.1: Details of Debt
As of September 30,
2025 2024
(in thousands)
Term Loan A (TLA) $ 853,125  $ 641,875 
Term Loan B (TLB) 493,750  498,750 
Subsidiary loan agreements —  5,194 
Total debt principal 1,346,875  1,145,819 
Less: Unamortized debt-issuance costs and discounts (12,602) (13,726)
Total debt 1,334,273  1,132,093 
Less: Current portion of long-term debt (52,680) (40,139)
Long-term debt $ 1,281,593  $ 1,091,954 
As a result of the divestiture of the our Australian operations in fiscal year 2025, the subsidiary loan agreement totaling $5.2 million as of September 30, 2024 was extinguished, and we are no longer subject to the associated borrowing agreements or covenants.
In addition to the borrowings above, our Credit Agreement has issued letters of credit totalling $3.0 million as of both September 30, 2025 and 2024.
Our credit agreements require us to comply with a number of covenants, including leverage and interest coverage ratios. At September 30, 2025, we were in compliance with all covenants. We do not believe that the covenants represent a significant restriction on our ability to successfully operate the business or to pay dividends.
The Credit Agreement is, subject to customary exceptions, secured by substantially all of our assets and all of the assets of our wholly owned material domestic subsidiaries, and guaranteed by each of our wholly owned material domestic subsidiaries.
Costs incurred in establishing the Credit Agreement were recorded as a reduction to the gross debt balance and will be amortized over the respective lives of the arrangements. Costs incurred in amending the Credit Agreement were deferred or expensed depending upon the nature of the costs. All costs deferred as of the date of an amendment are amortized prospectively over the new lives of the amended arrangements.
Table 6.2: Details of Future Minimum Principal Payments Due
Amount Due
(in thousands)
Year ended September 30, 2026 $ 55,625 
Year ended September 30, 2027 72,500 
Year ended September 30, 2028 78,125 
Year ended September 30, 2029 666,875 
Year ended September 30, 2030 5,000 
Thereafter 468,750 
Total Payments $ 1,346,875 
Interest Rate Derivative Instruments
We utilize interest rate swaps that are designed to reduce our risk from changes in interest rates, which we have designated as cash flow hedges. The following table presents our interest rate swaps:
Table 6.3: Interest Rate Derivative Instruments
As of September 30, 2025
Debt Principal Hedged Notional Amount Fixed Interest Rate Effective Expiry
(in thousands)
Term Loan A $ 500,000  2.31  % Present May 2026
Term Loan B $ 75,000  3.72  % Present September 2026
Term Loan B $ 75,000  3.62  % Present September 2027
Term Loan A $ 150,000  3.14  % June 2026 September 2027
Term Loan A $ 150,000  3.28  % June 2026 September 2028
In addition to the arrangements above, we had an arrangement for a notional amount of $150 million, which hedged a SOFR component of our TLA to a fixed amount of 4.38%. This arrangement expired in September 2024. We also had an arrangement for a notional amount of $75 million, which hedged a SOFR component of our TLB to a fixed amount of 4.09%. This arrangement expired in September 2025.
Our effective interest rate as of September 30, 2025 was 5.37%.
At September 30, 2025 and September 30, 2024, we had assets of $5.5 million and $12.6 million, respectively, related to these interest rate swaps. At September 30, 2025 and September 30, 2024, we had liabilities of $1.7 million and $3.4 million, respectively, related to these interest rate swaps. These instruments were recorded as "other assets" and "other liabilities" within our consolidated balance sheets. As these instruments are considered effective cash flow hedges, gains and losses based upon interest rate fluctuations are recorded within "accumulated other comprehensive income (AOCI)" within our consolidated financial statements.
Table 6.4: Gains/(Losses) on Derivatives
For the Year Ended September 30,
2025 2024 2023
(in thousands)
Gain/(loss) recognized in AOCI on derivatives, net of tax $ 4,561  $ (3,681) $ 8,558 
Amounts reclassified to earnings from accumulated other comprehensive income (8,487) (12,423) (8,837)
Net current period other comprehensive loss $ (3,926) $ (16,104) $ (279)
Counterparty Risk
We are exposed to credit losses in the event of nonperformance by the counterparty to our derivative instrument. Our counterparty has investment-grade credit ratings; accordingly, we anticipate that the counterparty will be able to fully satisfy its obligations under the contracts. Our agreements outline the conditions upon which we or the counterparty are required to post collateral. As of September 30, 2025 and 2024, there was no collateral posted with our counterparty related to the derivatives.
Debt And Derivatives DEBT AND DERIVATIVES
Our principal debt agreement is with J.P. Morgan Chase Bank, N.A. (the Credit Agreement). It is available for general corporate purposes, including the funding of working capital, capital expenditures and business acquisitions. The Credit Agreement has three components.
•A Term Loan A facility (the TLA), which matures on May 30, 2029. Interest rates on this facility are variable, based upon a combination of a Secured Overnight Financing Rate (SOFR) and a margin based on our leverage, varying between 1.0% and 2.0%.
•A Term Loan B facility (the TLB), which matures on May 30, 2031. The interest rates are based upon SOFR, subject to a floor of 0.5%, plus a fixed 2.0% margin.
•A revolving credit facility (the Revolver), which enables us to borrow or utilize up to $750.0 million. The interest on this facility is generally based upon the same rates as those used for the TLA. In addition, we are charged a commitment fee between 0.125% and 0.30% on unused funds, which is based upon our leverage. Commitment fees are recorded as interest expense on the consolidated statements of operations.
In addition to the Credit Agreement, we hold revolving credit facilities in Canada and the United Kingdom. These facilities are intended to allow our businesses to meet any short-term working capital needs.
Table 6.1: Details of Debt
As of September 30,
2025 2024
(in thousands)
Term Loan A (TLA) $ 853,125  $ 641,875 
Term Loan B (TLB) 493,750  498,750 
Subsidiary loan agreements —  5,194 
Total debt principal 1,346,875  1,145,819 
Less: Unamortized debt-issuance costs and discounts (12,602) (13,726)
Total debt 1,334,273  1,132,093 
Less: Current portion of long-term debt (52,680) (40,139)
Long-term debt $ 1,281,593  $ 1,091,954 
As a result of the divestiture of the our Australian operations in fiscal year 2025, the subsidiary loan agreement totaling $5.2 million as of September 30, 2024 was extinguished, and we are no longer subject to the associated borrowing agreements or covenants.
In addition to the borrowings above, our Credit Agreement has issued letters of credit totalling $3.0 million as of both September 30, 2025 and 2024.
Our credit agreements require us to comply with a number of covenants, including leverage and interest coverage ratios. At September 30, 2025, we were in compliance with all covenants. We do not believe that the covenants represent a significant restriction on our ability to successfully operate the business or to pay dividends.
The Credit Agreement is, subject to customary exceptions, secured by substantially all of our assets and all of the assets of our wholly owned material domestic subsidiaries, and guaranteed by each of our wholly owned material domestic subsidiaries.
Costs incurred in establishing the Credit Agreement were recorded as a reduction to the gross debt balance and will be amortized over the respective lives of the arrangements. Costs incurred in amending the Credit Agreement were deferred or expensed depending upon the nature of the costs. All costs deferred as of the date of an amendment are amortized prospectively over the new lives of the amended arrangements.
Table 6.2: Details of Future Minimum Principal Payments Due
Amount Due
(in thousands)
Year ended September 30, 2026 $ 55,625 
Year ended September 30, 2027 72,500 
Year ended September 30, 2028 78,125 
Year ended September 30, 2029 666,875 
Year ended September 30, 2030 5,000 
Thereafter 468,750 
Total Payments $ 1,346,875 
Interest Rate Derivative Instruments
We utilize interest rate swaps that are designed to reduce our risk from changes in interest rates, which we have designated as cash flow hedges. The following table presents our interest rate swaps:
Table 6.3: Interest Rate Derivative Instruments
As of September 30, 2025
Debt Principal Hedged Notional Amount Fixed Interest Rate Effective Expiry
(in thousands)
Term Loan A $ 500,000  2.31  % Present May 2026
Term Loan B $ 75,000  3.72  % Present September 2026
Term Loan B $ 75,000  3.62  % Present September 2027
Term Loan A $ 150,000  3.14  % June 2026 September 2027
Term Loan A $ 150,000  3.28  % June 2026 September 2028
In addition to the arrangements above, we had an arrangement for a notional amount of $150 million, which hedged a SOFR component of our TLA to a fixed amount of 4.38%. This arrangement expired in September 2024. We also had an arrangement for a notional amount of $75 million, which hedged a SOFR component of our TLB to a fixed amount of 4.09%. This arrangement expired in September 2025.
Our effective interest rate as of September 30, 2025 was 5.37%.
At September 30, 2025 and September 30, 2024, we had assets of $5.5 million and $12.6 million, respectively, related to these interest rate swaps. At September 30, 2025 and September 30, 2024, we had liabilities of $1.7 million and $3.4 million, respectively, related to these interest rate swaps. These instruments were recorded as "other assets" and "other liabilities" within our consolidated balance sheets. As these instruments are considered effective cash flow hedges, gains and losses based upon interest rate fluctuations are recorded within "accumulated other comprehensive income (AOCI)" within our consolidated financial statements.
Table 6.4: Gains/(Losses) on Derivatives
For the Year Ended September 30,
2025 2024 2023
(in thousands)
Gain/(loss) recognized in AOCI on derivatives, net of tax $ 4,561  $ (3,681) $ 8,558 
Amounts reclassified to earnings from accumulated other comprehensive income (8,487) (12,423) (8,837)
Net current period other comprehensive loss $ (3,926) $ (16,104) $ (279)
Counterparty Risk
We are exposed to credit losses in the event of nonperformance by the counterparty to our derivative instrument. Our counterparty has investment-grade credit ratings; accordingly, we anticipate that the counterparty will be able to fully satisfy its obligations under the contracts. Our agreements outline the conditions upon which we or the counterparty are required to post collateral. As of September 30, 2025 and 2024, there was no collateral posted with our counterparty related to the derivatives.