Notes Payable |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Notes Payable |
The components of notes payable at December 31, 2015 and 2014 are as follows:
Principal payments of debt for years subsequent to 2015 are as follows (in thousands):
Revolving Credit Agreement On December 29, 2015, the Company entered into a Loan Agreement (the “Loan Agreement”) with Frost Bank (“Frost”). The Loan Agreement provides two separate revolving credit facilities to the Company. The first facility (“Facility A”) provides the Company with a $4.00 million revolving line of credit with a two-year term maturing December 29, 2017, subject to a maximum loan amount (the “Borrowing Base”) based on a formula related to the value of certain of the Company’s accounts, inventories and equipment totaling $3.58 million at December 31, 2015. Under Facility A, the Company may borrow, repay and reborrow, up to the Borrowing Base. Facility A also allows the issuance of standby letters of credit. As of December 31, 2015, we had no letters of credit outstanding. Facility A requires a period of not less than 30 consecutive days during each calendar year that the entire outstanding principal amount of the revolving credit facility is paid. Upon Facility A’s maturity date, all outstanding principal and unpaid accrued interest is due and payable. The Company borrowed $1.04 million under Facility A upon initiation of the Loan Agreement. As of December 31, 2015, we had $2.54 million of additional borrowing capacity. The second facility (“Facility B”) provides the Company with a $4.50 million declining revolving line of credit. The Company may be borrow, repay and reborrow from the line. The amount available to borrow under Facility B declines from the initial $4.50 million by $0.15 million each six months. Facility B’s maturity date is December 29, 2020 when all outstanding principal and unpaid accrued interest is due and payable. The Company was advanced $4.50 million under Facility B upon the initiation of the Loan Agreement which was to pay off the remaining balance on the facility from JP Morgan Chase Bank N.A. (“Chase”) and as of December 31, 2015, the outstanding balance is $4.50 million. Under the Loan Agreement, the interest rate on both facilities is LIBOR (0.61% at December 31, 2015) plus 2.75% per year. The Loan agreement also provides for usual and customary covenants and restrictions including that the borrower must maintain a fixed charge coverage ratio of no less than 1.25 to 1.00, and will not permit the ratio of consolidated total liabilities to consolidated net worth to exceed 1.25. Additionally, the Company’s obligations under Facility A are secured by: 1. All our accounts receivable, whether now owned or hereafter acquired. 2. All our inventory, whether now owned or hereafter acquired. 3. All our machinery and equipment, whether now owned or hereafter acquired. 4. A collateral assignment on all future distributions from joint ventures. The Company’s obligations under Facility B are secured by: 1. Our fee simple interest in certain real estate and improvements in Beaumont, Texas. 2. Any parking, utility and ingress/egress easements on the foregoing property. 3. A collateral assignment on all future distributions from joint ventures. The Company’s subsidiaries, M&I Electric Industries, Inc. and South Coast Electric Systems, LLC are additional obligors on the Loan Agreement.
The Company had $5.54 million of borrowings outstanding under the Frost credit agreement at December 31, 2015 and $4.00 million at December 31, 2014. The Company had additional borrowing capacity of $2.54 million and $3.20 million at December 31, 2015 and December 31, 2014 respectively. |