Credit Facilities and Debt

6 Months Ended

Jun. 30, 2022

Debt Disclosure [Abstract]

Credit Facilities and Debt

10. Credit Facilities and Debt

Debt is summarized as follows:

	June 30, 2022			December 31, 2021
U.S. Credit Facilities	$	46,700		$	12,800
U.S Term Loan		15,000			—
Italy Short-Term Working Capital Borrowings		17,809			15,676
Italy Group Term Loan		11,536			12,472
Other		409			342
Total debt		91,454			41,290
Less: Debt issuance costs		(119	)		(83	)
Debt, net of issuance costs	$	91,335		$	41,207

U.S. Credit Facilities and Term Loan

On April 11, 2022, the Company entered into a Commercial Credit Agreement (the “Credit Agreement”), by and among the Company, the Company’s domestic subsidiaries and Amarillo National Bank. The Credit Agreement provides for a $40,000 revolving credit facility that matures on April 11, 2024, a $30,000 revolving credit facility that matures on April 11, 2024 and a $15,000 term loan that matures on October 11, 2029. Borrowings under the revolving credit facilities and the term loan bear interest at a floating rate equal to the Prime Rate plus 0.5%. The revolving credit facilities require monthly interest payments with the full principal balance coming due at maturity, and the $30,000 revolving credit facility requires quarterly payments in the amount of 3% of the outstanding balance thereunder on a quarterly basis beginning on January 1, 2023. The term loan requires monthly interest payments with quarterly amortization payments beginning on November 11, 2022, with the remaining principal balance coming due at maturity. The unused balance of the revolving credit facilities incurs a 0.125% fee that is payable semi-annually. At June 30, 2022, the Company had $46.7 million in borrowings (less than $0.1 million in debt issuance cost for a net debt of $46.7 million) under the revolving credit facilities. At June 30, 2022, the Company had $15.0 million in borrowings (less $0.1 million in debt issuance cost for a net debt of $14.9 million) under the term loan.

The Credit Agreement requires the Company to maintain a debt service coverage ratio of at least 1.25:1.00 measured on the last day of each calendar quarter, beginning June 30, 2022, and each measurement is based on a rolling 12-month basis. The Credit Agreement also requires the Company to maintain a U.S. net worth of at least $80,000, measured as of the last day of each calendar quarter, beginning June 30, 2022. The Company was in compliance with its covenants under the Credit Agreement as of June 30, 2022.

The Company and its U.S. subsidiaries were parties to a Loan and Security Agreement, as amended (the “Loan Agreement”) with CIBC Bank USA (“CIBC”). The Loan Agreement provided a revolving credit facility with a maturity date of July 20, 2023 in an aggregate amount of $30 million. At December 31, 2021, the Company had $12.8 million in borrowings (less $0.1 million in debt issuance cost for a net debt of $12.7 million). The indebtedness under the Loan Agreement was collateralized by substantially all of the Company’s assets, except for certain assets of the Company’s subsidiaries. On April 11, 2022, the Company repaid in full all outstanding indebtedness and other amounts outstanding of approximately $12.8 million and terminated all commitments and obligations under the Loan Agreement with CIBC in satisfaction of all of the Company’s debt obligations under the Loan Agreement. The Company was not required to pay any pre-payment premiums as a result of the repayment of indebtedness under the Loan Agreement. In connection with the repayment of such outstanding indebtedness by the Company, all security interests, mortgages, liens and encumbrances granted to the lenders under the Loan Agreement were terminated and released.

PM Group Short-Term Working Capital Borrowings

At June 30, 2022 and December 31, 2021, respectively, the PM Group had established demand credit and overdraft facilities with five banks in Italy, one bank in Spain and twelve banks in South America. Under these facilities, as of June 30, 2022 and December 31, 2021 respectively, the PM Group can borrow up to $19,736 and $21,449 for advances against invoices, letter of credit and bank overdrafts. These facilities are divided into two types: working capital facilities and cash facilities. For the six months ended June 30, 2022 and year ended December 31, 2021, respectively, interest on the Italian working capital facilities is charged at the 3-month Euribor plus 175, 200, or 270 basis points and 3-month Euribor plus 450 basis points, respectively. Interest on the PM Group’s South American facilities is charged at a flat rate of points for advances on invoices ranging from 8% - 55%.   

At June 30, 2022, the Italian banks had advanced PM Group $17,553. There were no advances to PM Group from the Spanish bank, and the South American banks had advanced PM Group $179.   At December 31, 2021, the Italian banks had advanced PM Group $14,874. There were no advances to PM Group from the Spanish bank, and the South American banks had advanced PM Group $463.  

Valla Short-Term Working Capital Borrowings

At June 30, 2022 and December 31, 2021, respectively, Valla had established demand credit and overdraft facilities with two Italian banks. Under the facilities, Valla can borrow up to $586 for advances against orders, invoices and bank overdrafts. Interest on the Italian working capital facilities is charged at a flat percentage rate for advances on invoices and orders ranging from 1.67% - 5.75% for both 2022 and 2021. At June 30, 2022 and December 31, 2021, the Italian banks had advanced Valla $77 and $339.

PM Group Term Loans

At June 30, 2022 and December 31, 2021, respectively, the PM Group has a $5,485 and $5,930 term loan that is split into a note and a balloon payment and is secured by the PM Group’s common stock. The term loan is charged interest at a fixed rate of 3.5%, has annual principal payments of approximately $600 per year and has a balloon payment of $3,143 due in 2026.

At June 30, 2022 and December 31, 2021, respectively, the PM Group has unsecured borrowings totaling $6,051 and $6,542, respectively.  The borrowings have a fixed rate of interest of 3.5%.

Annual payments of $1,513 are payable ending in 2025.