Debt and Shareholders' Equity

3 Months Ended

Mar. 31, 2024

Debt [Abstract]

Debt and Shareholders' Equity

4. Debt and Shareholders’ Equity

Long-term debt consists of (i) borrowings under the Company’s revolving loan agreement with HSBC Bank, N.A.(“HSBC”) and (ii) amounts outstanding under the fixed rate mortgage on the Company’s manufacturing and distribution facilities in Rocky Mount, NC and Vancouver, WA. The revolving loan agreement provides for borrowings of up to $65 million at an interest rate of Secured Overnight Financing Rate (“SOFR”) plus a margin of +1.75%; interest is payable monthly. The credit facility has an expiration date of May 31, 2026. The Company must pay a facility fee, payable quarterly, in an amount equal to one eighth of one percent (.125%) per annum of the average daily unused portion of the revolving credit line. The facility is intended to provide liquidity for growth, acquisitions, dividends, share repurchases, and other operating activities. Under the revolving loan agreement, the Company is required to maintain a specific ratio of funded debt to EBITDA, a fixed charge coverage ratio and must have annual net income greater than $0, measured as of the end of each fiscal year. As of March 31, 2024, the Company was in compliance with the covenants under the revolving loan agreement as then in effect.

As of March 31, 2024 and December 31, 2023, the Company had outstanding borrowings of $23,347,000 and $13,165,000, excluding deferred financing costs of $53,000 and $60,000, respectively, under the Company’s revolving loan agreement with HSBC.

The Company’s manufacturing and distribution facilities in Rocky Mount, NC and Vancouver, WA were financed by a fixed rate mortgage with HSBC at a fixed interest rate of 3.8%. The Company entered into the agreement on December 1, 2021. Commencing on January 1, 2022, payments of principal and interest are due monthly, with all amounts outstanding due on maturity on December 1, 2031. As of March 31, 2024 and December 31, 2023, long-term debt related to the mortgage consisted of the following (amounts in ‘000’s):

	March 31, 2024			December 31, 2023
Mortgage payable - HSBC Bank N.A.	$	10,719		$	10,823
Less debt issuance costs		(116	)		(120	)
		10,603			10,703
Less current maturities		424			419
Long-term mortgage payable less current maturities	$	10,179		$	10,284

During the three months ended March 31, 2024, the Company issued a total of 14,438 shares of common stock and received aggregate proceeds of $323,000 upon exercise of employee stock options. Also, during the three months ended March 31, 2024, the Company issued 2,242 shares of common stock to optionees who had elected a net share settlement of certain of their respective options. During the three months ended March 31, 2024, the Company paid approximately $296,000 to optionees who had elected a net cash settlement of certain of their respective options.