Quarterly report pursuant to Section 13 or 15(d)

Note 5 - Debt

Note 5 - Debt
3 Months Ended
Apr. 01, 2018
Notes to Financial Statements  
Debt Disclosure [Text Block]
(a) Revolving credit and long-term debt facilities
The Company borrows money under a Revolving Credit and Security Agreement with PNC Bank, National Association (“PNC”) which governs the terms of a revolving credit facility (the “PNC Revolving Credit Facility”) and a long-term debt facility (the “Long-Term Debt Facility” and, together with the PNC Revolving Credit Facility, the “PNC Facilities”). The PNC Facilities have terms ending on
January 2, 2021.
Advances made under the PNC Revolving Credit Facility bear interest at the U.S. base rate plus
The applicable interest rate for the Long-Term Debt Facility is U.S. base rate plus
The base commercial lending rate should approximate prime rate.  
The maximum amount of funds available under the PNC Revolving Credit Facility is
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 the PNC Revolving Credit Facility. As at
April 1, 2018
the funds available to borrow under the PNC Revolving Credit Facility after deducting the current borrowing base conditions was
December 31, 2017 -
March 28, 2018,
the Company entered into the Thirteenth Amendment (“Thirteenth Amendment”) of the Revolving Credit and Security Agreement, which was initially entered into on
September 14, 2011
with PNC.
Pursuant to the Thirteenth Amendment, the Lender has made a facility available to fund the purchase of equipment to a maximum amount of
(the “Equipment Facility”). Loans advanced for the purchase of equipment in Mexico specifically shall
in aggregate. All such advances under the Equipment Facility shall
percent (
) of the net cost of the equipment being purchased. The Equipment Facility has been available to the Company during the period commencing on the
March 28, 2018
and ending on
December 31, 2018 (
the “Borrowing Period”). At the end of the Borrowing Period, the Company will be required to repay the Equipment Facility over a
) year period, payable monthly. The Thirteenth Amendment sets the applicable interest rate margins (which margins are added to an interest rate based upon LIBOR or the U.S. base rate, as applicable, to determine the applicable interest rate) based on U.S. base rate plus
The Equipment Facility is governed by the terms and conditions of the PNC Facilities and as such has a term ending on
January 2, 2021.
The PNC Long-Term Debt Facility of
matures on
January 2, 2021
with quarterly principal payments of
with the remaining balance due at maturity.
April 1, 2018,
December 31, 2017 -
) 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.
April 1, 2018,
December 31, 2017 –
) was outstanding under the PNC Long-Term Debt Facility.
April 1, 2018,
was outstanding under the PNC Equipment Loan.
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.
(b) Covenants
The PNC Facilities agreement contains certain financial and non-financial covenants.
The financial covenants require the Company to maintain minimum consolidated fixed charge coverage ratio and limit unfunded capital expenditures (all as defined in the credit agreement governing the PNC Facilities).  The Company must maintain a minimum fixed charge coverage ratio is in effect for the
months ended
April 1, 2018,
months ended
July 1, 2018,
months ended
September 30, 2018
and thereafter on a rolling
month basis until
January 2, 2021.
The Company is in compliance with the financial covenants included in the PNC Facilities as of
April 1, 2018.