Debt and Shareholders' Equity

3 Months Ended

Mar. 31, 2023

Debt [Abstract]

Debt Disclosure [Text Block]

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 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, share repurchases, dividends, acquisitions, and other business activities. Under the revolving loan agreement, the Company is required to maintain specific amounts 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. On November 8, 2022, the revolving loan agreement was amended to increase the ratio of funded debt to EBITDA. The amendment is in effect for four quarters commencing in the third quarter of 2022 and includes an increase in the funded debt to EBITDA ratio for those four quarters ranging from a low of 4.75 to 1 to a high of 5.75 to 1. The amendment also increases the interest rate from SOFR +1.75% up to a high of SOFR + 2.35% on a basis that varies on a quarterly basis with the funded debt to EBITDA ratio. As of March 31, 2023, the Company was in compliance with the covenants under the revolving loan agreement, as amended.

As of March 31, 2023 and December 31, 2022, the Company had outstanding borrowings of $40,135,000 and $49,916,000, 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, 2023 and December 31, 2022, long-term debt related to the mortgage consisted of the following (amounts in ‘000’s):

	March 31, 2023			December 31, 2022
Mortgage payable - HSBC Bank N.A.	$	11,133		$	11,233
Less debt issuance costs		(131	)		(134	)
		11,002			11,099
Less current maturities		405			405
Long-term mortgage payable less current maturities	$	10,597		$	10,694

During the three months ended March 31, 2023, the Company issued a total of 5,000 shares of common stock and received aggregate proceeds of $61,350 upon exercise of employee stock options. Also, during the three months ended March 31, 2023, the Company issued 2,546 shares of common stock to optionees who had elected a net share settlement of certain of their respective options.