BANK BORROWINGS

12 Months Ended

Dec. 31, 2023

Bank Borrowings

Bank Borrowings

9.   BANK BORROWINGS

The Company has a $50,000 credit facility collateralized by its account receivables that expires March 31, 2025. This facility can be increased, at the Company’s option, to $80,000 for permitted acquisitions or other uses authorized by the lender on substantially the same terms. Amounts outstanding under this facility bear interest at the daily Bloomberg Short-Term Bank Yield Index, or BSBY Rate, plus a spread based on the Company’s funded debt ratio, or in the absence of BSBY Rate, the prime rate (8.50% at December 31, 2023). The credit facility includes various customary financial ratios and operating covenants, including minimum net worth and maximum funded debt ratio requirements, and default acceleration provisions. The credit facility does not include restrictions on future dividend payments. Funded debt ratio is the ratio of average outstanding advances under the credit facility to Adjusted Earnings Before Interest Expense, Taxes, Depreciation, Amortization, and Special Charges, or Adjusted EBITDA. The maximum allowable funded debt ratio under the agreement is 2.0 to 1.0. Decreases in the Company’s consolidated twelve months Adjusted EBITDA could limit its potential borrowing capacity under the credit facility. As of December 31, 2023, the Company was in compliance with the covenants of the credit facility.

Cash receipts are automatically applied against any outstanding borrowings. During the years ended December 31, 2023 and 2022, the Company borrowed incremental amounts that were each repaid in full. These borrowings for the years ended December 31, 2023 and 2022 totaled $88,198 and $36,463, respectively; however, at no time were the outstanding borrowings greater than the $50,000 limit under the credit facility. The Company had no outstanding borrowings under the credit facility as of December 31, 2023 or 2022, and accordingly, the entire $50,000 credit facility was available for borrowings on such date.