EFTA00791821.pdf

EDGAR-pro WORLD ACCEPTANCE CORP FORM 10-O (Quarterly Report) Filed 08/09/18 for the Period Ending 06/30/18 Address 108 FREDRICK STREET GREENVILLE, SC, 29607 Telephone CIK Symbol WRLD SIC Code 6141 - Personal Credit Institutions Industry Consumer Lending Sector Financials Fiscal Year 03/31 lowered BY EDGARbnline http./Avww.edgar.online.com O Copyright 2018. EDGAR Online, a division of Donnelley Financial Solutions. All Rights Reserved. Distribution and use of this document restricted under EDGAR Online, a division of Donnelley Financial Solutions. Terms of Use. EFTA00791821  UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 Form I 0-Q (Mark One) riS QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2018 OR o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF TIIE SECURITIES EXCHANGE ACT of 1934 For the transition period from to Commission File Number. WORLD ACCEPTANCE CORPORATION (Exact name of registrant as specified in its charter.) South Carolina 57-0425114 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification Number) 108 Frederick Street Greenville, South Carolina 29607 (Address of principal executive offices) (Zip Code) (864) 298-9800 (registrant's telephone number, including area code) Indicate by check mark whether the registrant (I) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for shorter period than the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes NI No O Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes II3 No ❑ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer." "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check One): EFTA00791822  Large Accelerated filer ❑ Accelerated filer Non-accelerated filer O Smaller reporting company O (Do not check if smaller reporting company) Emerging growth company O If an emerging growth company. indicate by check mark if registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. Indicate by check mark whether the registrant is a shell company (as defined in Rule 126-2 of the Exchange Act). Yes O No Ditl The number of outstanding shares of the issuer's no par value common stock as of August 2, 2018 was 9,143,267 . EFTA00791823  WORLD ACCEPTANCE CORPORATION Form 10-Q Table of Contents Item No. Ears PART I - FINANCIAL INFORMATION Consolidated Financial Statements (unaudited): 4 Consolidated Balance Sheets as of Lune 30. 2018 and March 31. 2018 4 Consolidated Statements of Onerations for the three months ended June 30.2018 and June 30.2017 Condensed Consolidated Statements of Comprehensive Income for the three months ended hate 30 2018 and Tune irk 1 2017 Consolidated Statements of Shareholders' Fruity for the year ended March 31 7018 and the three months ended tun• 30 2018 Consolidated Statements of Cash Flows for the three months ended June 30.2018 and June 30 2017 2 Notes to Consolidated Financial Statements IdgEggement's Discussion and Analysis of Financial Condition and Results of °petitions 16 3. Quantitative and Qualitative Disclosures about Market Risk 34 4. Controls and Procedures 15 PART II - OTHER INFORMATION Legal Proceedings 36 IA. Risk Factors 36 2. Unregistered Sales of Equity Securities and Use of Proceeds 36 3. Defaults Upon Senior Securities 36 4. Mine Safety Disclosure* 5. Other Information 6. 3/ EXIIIBIT INDEX al SIGNATURES 38 Introductory Note: As used herein, the "Company," "we," "our," "us," or similar formulations include World Acceptance Corporation and each of its subsidiaries, unless otherwise expressly noted or the context otherwise requires that it include only World Acceptance Corporation. All references in this report to "fiscal 2019 " are to the Company's fiscal year ending March 31,2019; all references in this report to "fiscal 2018 " are to the Company's fiscal year ended March 31, 2018 ; and all references to "fiscal 2017 " are to the Company's fiscal year ended March 31, 2017 . 3 EFTA00791824 Table of Contents PART I. FINANCIAL INFORMATION WORLD ACCEPTANCE CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Unaudited) June 30, 2018 March 31, 2018 ASSETS Cash and cash equivalents 10,262,901 $ 12,473,833 Gross loans receivable 1,062,673,177 1,004,233,159 Less: Unearned interest. insurance and fees (280.886,555) (258,991,492) Allowance for loan losses (68,029,622) (66,088,139) Loans receivable, net 713.757,000 679.153,528 Property and equipment, net 23,254,500 22,785,951 Deferred income taxes, net 19.807,871 20,175,148 Other assets, net 12,467,496 13,244,416 Goodwill 7.034,463 7,034,463 Intangible assets, net 6,380,849 6,644,301 Assets held for sale (Note 2) 19.012,674 79,475,397 Total assets $ 811,977,754 5 840,987,037 LIABILITIES & SHAREHOLDERS' EQUITY Liabilities: Senior notes payable $ 239,840,000 S 244.900,000 Income taxes payable 17,846.549 14,097,419 Accounts payable and accrued expenses 30.600.024 33,503,335 Liabilities held for sale (Note 2) 6,418,506 7,378,431 Total liabilities 294,705,079 299,879,185 Commitments and contingencies (Note II) Shareholders' equity: Preferred stock, no par value Authorized 5,000,000, no shares issued or outstanding Common stock, no par value Authorized 95,000,000 shares; issued and outstanding 9,140,273 and 9.119,443 shares at lune 30, 2018 and March 31, 2018, respectively Additional paid-in capital 178,791,182 175,887,227 Retained earnings 369,772,411 391,275,705 Accumulated other comprehensive loss (31,290,918) (26,055,080) Total shareholders' equity 517,272,675 541,107,852 Total liabilities and shareholders' equity 811,977,754 S 840,987,037 See accompanying notes to consolidated financial statements. 4 EFTA00791825 Table of Contents WORLD ACCEPTANCE CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) Three months ended June 30, 2018 2017 Continuing operations Revenues: Interest and fee income 108.444,378 S 103,367,484 Insurance income, net and other income 14.345.607 13,270,882 Total revenues 122,789,985 116,638,366 Expenses: Provision for loan losses 30,590,619 27,709,627 General and administrative expenses: Personnel 41,569347 41,043,803 Occupancy and equipment 10,052,103 9,527,884 Advertising 4,850.085 4,637,456 Amortization of intangible assets 263,452 185,822 Other 11,042368 10.813,221 Total general and administrative expenses 67,777,355 66,208,186 Interest expense 4,225,001 4,246,702 Total expenses 102,592,975 98.164,515 Income from continuing operations before income taxes 20,197,010 18,473,851 Income taxes 4,559,345 7,265,3% Income from continuing operations 15,637,665 11,208,455 Discontinued operations (Note 2) Income from discontinued operations before impairment loss and income taxes 2,341,825 2,431,723 Impairment loss 39,006,544 Income taxes 476,240 572,492 Income (loss) from discontinued operations (37,140.959) 1.859,231 Net income (loss) (21.501294 s 13(167.686 Net income per common share from continuing operations: Basic 5 1.73 $ I,N Diluted 5 1.69 S 1.17 Net income (loss) per common share from discontinued operations: Basic 5 (4.10) S o.21 Diluted S (4.01) S () 21 5 EFTA00791826 Table of Contents Net income (loss) per common share: Basic $ (237) $ 1.50 Diluted (232) 1.48 Weighted average common shares outstanding: Basic 9,054,793 8,687,195 Diluted 9,253,226 8,626,595 See accompanying notes to consolidated financial statements. 6 EFTA00791827 Table or Contents WORLD ACCEPTANCE CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) Three months ended June 30, 2018 2017 Net income (loss) $ (21,503,294) 5 13,067,686 Foreign currency translation adjustments (5,235,838) 2,478,619 Comprehensive income (loss) $ (26,739,132) 5 15,546,305 See accompanying notes to consolidated financial statements. 7 EFTA00791828 Table of Contents WORLD ACCEPTANCE CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Unaudited) Additional Paid-in Accumulated Other Total Shareholders' Capital Retained Earnings Comprehensive Loss Equity Balances at March 31, 2017 5 144,241,105 344,605,347 (27,782,875) 461,063,577 Proceeds from exercise of stock options (389,888 shares) 25,323,531 25,323,531 Common stock repurchases (58,728 shares) (4,614,331) (4,614,331) Restricted common stock expense under stock option plan, net of cancellations (51,517,357) 1,564,048 1,564,048 Stock option expense 2,353,214 2,353,214 ASU 2016-09 adoption 2,405,329 (2,405,329) Other comprehensive income 1,727,795 1,727,795 Net income 53,690,018 53,690,018 Balances at March 31. 2018 5 175,887,227 391,275,705 (26,055,080) 541,107,852 Proceeds from exercise of stock options (20,830 shares) 1,428,938 1.428,938 Restricted common stock expense under stock option plan 950,790 950,790 Stock option expense 524,227 524,227 Other comprehensive loss (5.235,838) (5,235,838) Net loss (21,503,294) (21,503,294) Balances at June 30, 2018 S 178.791.182 369.772,411 (31.290,918) 517.272.675 See accompanying notes to consolidated financial statements. EFTA00791829 Table of Contents WORLD ACCEPTANCE CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Three months ended June 30, 2018 2017 Cash flow from operating activities: Net income (loss) (21,503,294) S 13,067,686 Adjustments to reconcile net income (loss) to net cash provided by operating activities: Impairment of assets held for sale 39,006,544 Amortization of intangible assets 263,452 185,822 Amortization of debt issuance costs 208,921 238,963 Provision for loan losses 32,399,678 30,840,058 Depreciation 1,833,309 1,791,453 Loss on sale of property and equipment 89,673 61,639 Deferred income tax expense (benefit) 413,750 (985,424) Compensation related to stock option and restricted stock plans, net of taxes and adjustments 1,475.017 1,132,077 Change in accounts: Other assets, net 739376 2,579,191 Income taxes payable 3,560,469 2,449,633 Accounts payable and accrued expenses (3,033.131) (1,272,161) Net cash provided by operating activities 55,453,764 50,088,937 Cash flows front investing activities: Increase in loans receivable, net (64,053,964) (51,779,690) Net assets acquired from branch acquisitions, primarily loans (2,309,245) Increase in intangible assets from acquisitions (521,342) Purchases of property and equipment (2,267,431) (2,015,900) Proceeds from sale of property and equipment 93,700 70,752 Net cash used in investing activities (66,227,695) (56,555,425) Cash flow from financing activities: Borrowings front senior notes payable 55,390,000 61,343,800 Payments on senior notes payable (60,450,000) (55,930,000) Debt issuance costs associated with senior notes payable (240.000) (420,000) Proceeds from exercise of stock options 1,428,938 5,334,886 Repurchase of common stock (4,614,331) Net cash provided by (used in) financing activities (3,871,062) 5,714,355 Effects of foreign currency fluctuations on cash and cash equivalents (765.404) 94,234 Net change in cash and cash equivalents (15,410,397) (657,899) Cash and cash equivalents at beginning of period, excluding held for sale 12,473,833 11,581,936 Cash and cash equivalents held for sale at beginning of period 19,612,471 3,618,474 Cash and cash equivalents at end of period 16,675,907 14,542,511 Cash and cash equivalents held for sale at end of period 6.413.006 2,397,709 Cash and cash equivalents at end of period, excluding held for sale 10.26...901 12,144,802 Supplemental Disclosures: Interest paid during the period 3,896,463 3,883,860 Income taxes paid during the period 1.291,884 6,375,281 9 EFTA00791830 Table of Contents See accompanying notes to consolidated financial statements. 10 EFTA00791831 Table of Contents WORLD ACCEPTANCE CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) NOTE I — BASIS OF PRESENTATION The consolidated financial statements of the Company at June 30, 2018 , and for the three months then ended were prepared in accordance with the instructions for Form 10-Q and are unaudited; however, in the opinion of management all adjustments (consisting only of items of a normal, recurring nature) necessary for a fair presentation of the financial position at June 30, 2018 , and the results of operations and cash flows for the periods ended June 30, 2018 and 2017 , have been included. The results for the interim periods are not necessarily indicative of the results that may be expected for the full year or any other interim period. The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles ("GAAP") requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent liabilities at the date of the consolidated financial statements and the reported amount of revenue and expenses during the reporting period. Actual results could differ from those estimates. The consolidated financial statements do not include all disclosures required by GAAP and should be read in conjunction with the Company's audited consolidated financial statements and related notes for the fiscal year ended March 31, 2018 , included in the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2018 , as filed with the U.S. Securities and Exchange Commission ("SEC"). NOTE 2 — FIELD-FOR-SALE AND DISCONTINUED OPERATIONS Subsequent to the current period's balance sheet date of June 30, 2018 the Company and its affiliates approved the sale of the Company's Mexico operating segment in its entirety. The Company completed the sale on August 3, 2018, with a July I, 2018 effective date. Pursuant to the terms of the stock purchase agreement, the Company will provide limited accounting assistance to the purchasers of the Mexico operating segment, as requested, for a period of 90 days after the sale's effective date. The Company will have no other involvement with the Mexico operating segment subsequent to the sale's effective date. Refer to Note 12 — Subsequent Events of this Quarterly Report on Form 10-Q for more information surrounding the sale of the Company's Mexico operating segment. II EFTA00791832 Table of Contents The following table reconciles the major classes of assets and liabilities held for sale to the amounts presented in the Consolidated Balance Sheets: June 30, 2018 March 31, 2018 Assets held for sale: Cash and cash equivalents 6.413,006 S 19,612,471 Loans receivable, net 39,160,944 46,027,200 Property and equipment, net 2,349,870 2,805,467 Deferred income taxes, net 9,146,469 10,064,489 Other assets, net 948.929 965,770 Accumulated impairment losses (39,006,544) Total assets held for sale 19.012.674 S 79,475,397 Liabilities held for sale: Income taxes payable 206,045 437,551 Accounts payable and seemed expenses 6,212,461 6,940,880 Total liabilities held for sale S 6,418,506 S 7,378,431 The following table reconciles the major classes of line items constituting pre-tax profit (loss) of discontinued operations to the amounts presented in the Consolidated Statements of Operations: Three months ended June 30, 2018 2017 Revenues S 9.693.367 S 12,271,057 Provision for loan losses 1,809,059 3,130,431 Geneml and administrative expenses 5542,483 6.708,903 Income from discontinued operations before impairment loss and income taxes 2,341,825 2,431,723 Impairment loss 39.006,544 Income taxes 476,240 572,492 Income (loss) from discontinued operations S (37.140.959) S 1.859.231 The following table presents operating, investing and financing cash flows for the Company's discontinued operations: Three months ended June 30, 2018 2017 Cash provided by operating activities: 3,553,854 S 5,356,127 Cash provided by (used in) investing activities: 1,138,084 (6,671,126) Cash provided by (used in) financing activities: S (17,126,000) S NOTE 3 —SUMMARY OF SIGNIFICANT POI irws Nature ofOperations The Company is a small-loan consumer finance company headquartered in Greenville, South Carolina that offers short-term small loans, medium-term larger loans, related credit insurance products and ancillary products and services to individuals who have 12 EFTA00791833 Table of Contents limited access to other sources of consumer credit. In U.S. branches, the Company offers income tax return preparation services to its loan customers and other individuals. Seasonality The Company's loan volume and corresponding loans receivable follow seasonal trends. The Company's highest loan demand generally occurs from October through December. its third fiscal quarter. Loan demand is generally lowest and loan repayment highest from January to March, its fourth fiscal quarter. Loan volume and average balances remain relatively level during the remainder of the year. Consequently, the Company experiences significant seasonal fluctuations in its operating results and cash needs. Operating results for the Company's third fiscal quarter are generally lower than in other quarters and operating results for its fourth fiscal quarter are generally higher than in other quarters. Recently Adopted Accounting Standards Scope ofModification Accounting In May 2017, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2017-09, Scope of Modification Accounting. The amendments in this Update provide guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. According to ASU 2017-09 an entity should account for the effects of a modification unless all the following are met: I. The fair value of the modified award is the same as the fair value of the original award immediately before the original award is modified. 2. The vesting conditions of the modified award are the same as the vesting conditions of the original award immediately before the original award is modified. 3. The classification of the modified award as an equity instrument or a liability instrument is the same as the classification of the original award immediately before the original award is modified. The amendments in this Update are effective for all entities for annual periods, and interim periods within those annual periods, beginning after December 15, 2017. The Company adopted ASU 2017-09 on its effective date, April I, 2018. Management has reviewed the provisions of ASU 2017-09 and has determined that them is no financial statement impact during the period since this is a clarification to current guidance. The Company will apply the clarified guidance on any future change to terms and conditions of share-based payment awards. Revenuefrom Contracts with Customers: identifying Performance Obligations and Licensing In April 2016, the FASO issued ASU 2016-10, Identifying Performance Obligations and Licensing. The amendments clarify the following two aspects of Topic 606: (a) identifying performance obligations; and (b) the licensing implementation guidance. The amendments do not change the corn principle of the guidance in Topic 606. The effective date and transition requirements for the amendments are the same as the effective date and transition requirements in Topic 606. Public entities should apply the amendments for annual reporting periods beginning after December 15, 2017, including interim reporting periods therein. The Company adopted ASU 2016-10 on its effective date, April 1, 2018. Management has concluded that the new standard did not have a material impact on the Company's consolidated financial statements. Recognition and Measurement ofFinancial Assets and Financial Liabilities In January 2016, the FASB issued ASU 2016-01, which updates certain aspects of recognition, measurement, presentation and disclosure of financial instruments. Public entities should apply the amendments for annual reporting periods beginning after December IS, 2017, including interim reporting periods therein. The Company adopted ASU 2016-01 on its effective date, April I, 2018. The Company's current disclosures around financial instruments reflect the instruments' estimated fair market value or exit price. Based on this, management has determined that the provisions of ASU 2016-01 had no financial statement impact during the period of adoption. Revenuefrom Contracts with Customers In May 2014, the FASO issued ASU 2014-09, which supersedes the revenue recognition requirements Topic 605 (Revenue Recognition), and most industry- specific guidance. ASU 2014-09 is based on the principle that revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments 13 EFTA00791834 Table of Contents and assets recognized from costs incurred to obtain or fulfill a contract. ASU 2014-09, as amended by ASU 2015-14, ASU 2016-20, ASU 2017-13, is effective for fiscal years, and interim periods, beginning after December 15, 2017. The Company adopted this new guidance on its effective date, April 1, 2018, using the modified retrospective method where prior periods are not restated. Management has evaluated revenue from contracts with customers and has concluded that the new standard did not have a material impact on the Company's consolidated financial statements. Recently Issued Accounting Standards Not Yet Adopted Simpltfiing the Testfor Goodwill Impairment In January 2017, the FASD issued ASU 2017-04, Simplifying the Test for Goodwill Impairment. ASU 2017-04 eliminates Step 2 from the goodwill impairment test. Instead, under the amendments in this Update, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. Additionally, an entity should consider income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss. if applicable. ASU 2017-04 also eliminates the requirements for any reporting unit with a zero or negative canying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform Step 2 of the goodwill impairment test. Therefore, the same impairment assessment applies to all reporting units. The amendments in this Update are effective for public entities who are SEC filers for fiscal years beginning after December 15, 2018. Early adoption is permitted. We are currently evaluating the impact the adoption of this guidance will have on our consolidated financial statements. Measurement ofCredit Lasses on Financial instruments In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses. The amendment seeks to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. To achieve this objective, the amendments in this ASU replace the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. For public business entities the amendments are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. We are currently evaluating the impact the adoption of this guidance will have on ow consolidated financial statements. The adoption of this ASU could have a material impact on the provision for loan losses in the consolidated statements of operations and allowance for loan losses in the consolidated balance sheets. Leases In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). The ASU 2016-02, as amended by ASU 2018-01, will require lessees to recognize assets and liabilities on leases with terms greater than 12 months and to disclose information related to the amount, timing and uncertainty of cash flows arising from leases, including various qualitative and quantitative requirements. The amendments of this ASU become effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2018. We are currently evaluating the impact the adoption of this guidance will have on our consolidated financial statements. We expect the standard to have an impact on our assets and liabilities for the addition of right-of-use assets and lease liabilities, but we do not expect it to have a material impact to our results of operations or liquidity. We reviewed all other newly issued accounting pronouncements and concluded that they are either not applicable to our business or are not expected to have a material effect on the consolidated financial statements as a result of future adoption. 14 EFTA00791835 Table of Contents NOTE 4 - FAIR VALUE Fair Value Disclosures The Company may carry certain financial instruments and derivative assets and liabilities measured at fair value on a recurring basis. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. The Company determines the fair values of its financial instruments based on the fair value hierarchy. which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Financial assets and liabilities measured at fair value are grouped in three levels. The levels prioritize the inputs used to measure the fair value of the assets or liabilities. These levels are: • Level I — Quoted prices (unadjusted) in active markets for identical assets or liabilities. • Level 2 — Inputs other than quoted prices that are observable for assets and liabilities, either directly or indirectly. These inputs include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in market that are less active. • Level 3 — Unobservable inputs for assets or liabilities reflecting the reporting entity's own assumptions. The Company's financial instruments measured at fair value on a recurring basis for the periods reported consist of the following: cash and cash equivalents, loans receivable, and senior notes payable. Fair value approximates carrying value for all of these instruments. Loans receivable are originated at prevailing market rates and have an average life of approximately eight months . Given the short-term nature of these loans, they are continually repriced at current market rates. The Company's revolving credit facility has a variable rate based on a margin over LIBOR and reprices with any changes in LIBOR. The Company also considers its creditworthiness in its determination of fair value. The carrying amounts and estimated fair values of amounts the Company measures at fair value on a recurring basis ar