Note 5 - Debt
|9 Months Ended|
Oct. 01, 2017
|Notes to Financial Statements|
|Debt Disclosure [Text Block]||
(a) Revolving credit
and long-term debt
The Company borrows money under a Revolving Credit and Security Agreement with PNC Bank, National Association (“PNC”) which governs the
PNC Revolving Credit Facility and a Long-Term Debt Facility (“PNC Facilities”). The PNC Facilities have a term ending on
January 2, 2021.Advances made under the PNC Revolving Credit Facility bear interest at the U.S. base rate plus
0.75%.The applicable interest rate for the Long-Term Debt Facility is U.S. base rate plus
1.25%.The base commercial lending rate should approximate prime rate. The weighted average interest rate increased to
October 1, 2017
, the funds available to borrow under the PNC Revolving Credit Facility after deducting the current borrowing base conditions was
January 1, 2017 -
$7,377). The maximum amount of funds that could be available under the PNC Revolving Credit Facility is
$30,000.However, availability under the PNC Revolving Credit Facility is subject to certain conditions, including borrowing base conditions based on eligible inventory and accounts receivable, and certain conditions as determined by the lender. The Company is required to use a “lock-box” arrangement for the PNC Revolving Credit Facility, whereby remittances from customers are swept daily to reduce the borrowings under this facility.
May 15, 2017,the Company entered into the Twelfth Amendment (“Twelfth Amendment”) of the Revolving Credit and Security Agreement, which was initially entered into on
September 14, 2011with PNC Bank, National Association, as agent for the Lender.
Pursuant to the Twelfth Amendment, the Lender has modified the definition of EBITDA (as defined in the Twelfth Amendment) to include additional exclusions and limits.
In addition, the Lender has increased the interest rates by
0.25%during the quarter in accordance with the Twelfth Amendment; however if the Company maintains a specified fixed charge coverage ratio for a predetermined period of time and maintains its compliance with the terms of the PNC Facilities, interest rates will be reduced to the U.S. base rate plus
0.25%on advances made under the PNC Revolving Credit Facility and U.S. base rate plus
0.75%on advances made under the Long-Term Debt Facility.
The PNC Long-Term Debt Facility
consists of a term loan of
$10,000that matures on
January 2, 2021with quarterly principal payments of
$500with the remaining balance due at maturity.
January 1, 2017 -
$2,731) was outstanding under the PNC Revolving Credit Facility and is classified as a current liability based on the requirement to hold a “lock-box” under the terms of the PNC Revolving Credit Facility. At
October 1, 2017,
January 1, 2017 –
$10,000) was outstanding under the PNC Long-Term Debt Facility.
The PNC Facilities are a joint and several obligations of the Company and its subsidiaries that are borrowers under the facilities and are jointly and severally guaranteed by other subsidiaries of the Company. Repayment under the PNC Facilities is collateralized by the assets of the Company and each of its subsidiaries.
Revolving Credit and Security Agreement contains certain financial and non-financial covenants.
As defined under the Twelfth Amendment, the Company
was required to maintain a minimum EBITDA for the
July 2, 2017and the
October 1, 2017.Subsequent thereafter, the financial covenant relating to a minimum consolidated fixed charge coverage ratio is in effect for the
December 31, 2017,
April 1, 2018,
July 1, 2018,
September 30, 2018and thereafter on a rolling
twelvemonth basis until
January 2, 2021.The financial covenants also require that the Company limit unfunded capital expenditures (all as defined in the credit agreement governing the PNC Facilities).
The Company is in compliance with the financial covenants included in the PNC Facilities as of
October 1, 2017.
The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.
Reference 1: http://www.xbrl.org/2003/role/presentationRef