Note 8 - Debt
|9 Months Ended|
Mar. 31, 2019
|Notes to Financial Statements|
|Debt Disclosure [Text Block]||
Total debt obligations at
March 31, 2019and
June 30, 2018consist of the following (in thousands):
Revolving Credit Facility
December 21, 2018,the Company and most of its domestic subsidiaries (the “Loan Parties”) entered into a Second Amended and Restated Credit Agreement (the “Facility”). The Facility amends and restates the existing Amended and Restated Credit Agreement, dated as of
October 21, 2014,as amended. The Facility provides a revolving credit line of up to
$165million, subject to borrowing base availability, and extends the maturity of the Facility to
December 21, 2023.We incurred financing costs of
$0.6million under the Facility, which are being amortized over the remaining life of the Facility using the effective interest method.
At the Company’s option, revolving loans under the Facility bear interest, based on the average availability, at an annual rate of either (a) the London Interbank Offered rate (“LIBOR”) plus
2.0%,or (b) the higher of (i) the prime rate, (ii) the federal funds effective rate plus
0.5%,or (iii) LIBOR plus
1.0%plus in each case
The availability of credit at any given time under the Facility will be constrained by the terms and conditions of the Facility, including the amount of collateral available, a borrowing base formula based upon numerous factors including the value of eligible inventory and eligible accounts receivable, and other restrictions contained in the Facility. All obligations under the Facility are secured by assets of the Loan Parties including inventory, receivables and certain types of intellectual property.
under the Facility
To fund a portion of the special cash dividend paid to shareholders in
January 2019,we borrowed
$16.0million from the Facility having a maturity date of
December 21, 2023.By
March 31, 2019,we had repaid
$8.0million of the total borrowed from cash generated from operating activities. The debt bears interest on the outstanding principal amount at a rate equal to the
one-month LIBOR rate of
2.5%plus a spread using a debt leverage pricing grid currently at
1.5%.Interest on the loan outstanding is payable monthly in arrears and on the maturity date.
The outstanding borrowing amount of
$8.0million is reported as
Long-term debtwithin the consolidated balance sheet at
March 31, 2019.For the
March 31, 2019,we recorded interest expense of
$0.1million on our outstanding debt amount. The principal balance is payable in full on the maturity date.
The following table summarizes, as of
March 31, 2019,the timing of cash payments related to our outstanding long-term debt obligations for the remaining
threemonths of fiscal
2019,and each of the
fivefiscal years subsequent to
June 30, 2019,and thereafter (in thousands).
Covenants and Other Ratios
The Facility contains various restrictive and affirmative covenants, including required financial reporting, limitations on the ability to grant liens, make loans or other investments, incur additional debt, issue additional equity, merge or consolidate with or into another person, sell assets, pay dividends or make other distributions or enter into transactions with affiliates, along with other restrictions and limitations similar to those frequently found in credit agreements of this type and size. Loans under the Facility
maybecome immediately due and payable upon certain events of default (including failure to comply with covenants, change of control or cross-defaults) as set forth in the Facility.
The Facility does
notcontain any significant financial ratio covenants or coverage ratio covenants other than a fixed charge coverage ratio covenant based on the ratio of (a) EBITDA, plus cash Rentals, minus Unfinanced Capital Expenditures to (b) Fixed Charges, as such terms are defined in the Facility (the “FCCR Covenant”). The FCCR Covenant only applies in certain limited circumstances, including when the unused availability under the Facility drops below
$18.5million. The FCCR Covenant ratio is set at
1.0and measured on a trailing
March 31, 2019and
June 30, 2018,there was
million of standby letters of credit outstanding under the Facility. Total availability under the Facility was
March 31, 2019and
June 30, 2018.At both
March 31, 2019and
June 30, 2018,we were in compliance with all the covenants under the Facility.
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://fasb.org/us-gaap/role/ref/legacyRef
No definition available.