Quarterly report pursuant to Section 13 or 15(d)

Note 6 - Borrowings

v3.10.0.1
Note 6 - Borrowings
 3 Months Ended
Sep. 30, 2018
Notes to Financial Statements  
Debt Disclosure [Text Block]
(
6
)
Borrowings
 
Total debt obligations at
September 30, 2018
and
June 30, 2018
consist of the following (in thousands):
 
   
September 30,
    
June 30,
  
   
2018
    
2018
  
                 
Capital leases
   $
1,479
     $
1,680
  
Total debt
    
1,479
      
1,680
  
Less current maturities
    
552
      
584
  
Total long-term
   $
927
     $
1,096
  
 
The Company entered into a
five
year,
$150
million senior secured revolving credit and term loan facility on
October 21, 2014,
as amended (the “Facility”). The Company intends to use the Facility for working capital and general corporate purposes, including dividend payments and share repurchases. The Facility, which expires on
October 21, 2019,
provided a single-draw term loan of
$35
million and a revolving credit line of up to
$115
million, subject to borrowing base availability. We incurred financing costs of
$1.5
million under the Facility, which are being amortized by the interest method, over the remaining life of the Facility.
 
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
1.5%
to
1.75%,
or (b) the higher of (i) the prime rate, (ii) the federal funds effective rate plus
0.50%,
or (iii) LIBOR plus
1.0%
plus in each case
0.5%
to
0.75%.
 
The Company pays a commitment fee of
0.15%
to
0.25%
per annum on the unused portion of the Facility, and fees on issued letters of credit at an annual rate of
1.5%
to
1.75%
based on the average availability. Certain payments are restricted if the availability under the revolving credit line falls below
20%
of the total revolving credit line, and the Company is subject to pro forma compliance with the fixed charge coverage ratio if applicable.
 
In fiscal
2018
the Company repaid the remaining balance of
$13.8
million on the term loan with excess operating cash.
 
The Facility is secured by all property owned, leased or operated by the Company in the United States and includes certain real property owned by the Company and contains customary covenants which
may
limit the Company’s ability to incur debt; engage in mergers and consolidations; make restricted payments (including dividends and share repurchases); sell certain assets; and make investments.
 
The Facility includes a covenant that requires the Company to maintain a minimum fixed charge coverage ratio of
1.1
to
1.0
at all times unless the outstanding term loan is less than
$17.5
million and the fixed charge coverage ratio equals or exceeds
1.25
to
1.0,
in which case the fixed charge coverage ratio ceases to apply and thereafter is only triggered if average monthly availability is less than
15%
of the amount of the revolving credit line. The Company has met the exemption conditions and is currently exempt from the fixed charge coverage ratio covenant.
 
At both
September 30, 2018
and
June 30, 2018,
there was
$6.2
million of standby letters of credit outstanding under the Facility. Total availability under the Facility was
$108.8
million at both
September 30, 2018
and
June 30, 2018.
 
At both
September 30, 2018
and
June 30, 2018,
we were in compliance with all the covenants under the Facility.
 
The following table summarizes, as of
September 30, 2018,
the timing of cash payments related to our outstanding long-term debt obligations for the remaining
nine
months of fiscal
2019,
and each of the
five
fiscal years subsequent to
June 30, 2019,
and thereafter (in thousands).
 
Periods ending June 30,
  
2019
   $
413
  
2020
    
550
  
2021
    
437
  
2022
    
59
  
2023
    
20
  
2024 and thereafter
    
-
  
Total scheduled debt payments
   $
1,479