Note 8 - Bank Debt

3 Months Ended

Mar. 31, 2024

Notes to Financial Statements

Long-Term Debt [Text Block]

8.  BANK DEBT 

The Company is party to a Credit Agreement with JPMorgan Chase Bank, N.A. as lender (as amended, the “Credit Agreement”).

The Company entered into a sixth amendment to the Credit Agreement on   June 12, 2023. The most significant change in the amended Credit Agreement was the discontinued use of LIBOR as a reference rate, with the adoption of the Federal Reserve Bank of New York's Secured Overnight Financing Rate (SOFR) as the primary reference rate. This change was anticipated and aligns with the US Dollar LIBOR panel ceasing on   June 30, 2023.  

The Company entered into a seventh amendment to the Credit Agreement on  November 27, 2023. The Seventh Amendment to the Credit Agreement, among other things, (a) extends the maturity date of the underlying credit facility from  June 1, 2024 to  June 1, 2027, (b) increases the maximum annual amount that the Company and its subsidiaries  may pay in dividends or other restricted payments to $2,000,000 from $1,250,000, and (c) permits the repurchase by the Company and its subsidiaries of up to $7,000,000 of Company equity prior to  June 30, 2024, subject to compliance with certain financial covenants under the Credit Agreement.

The revolving facility under the Credit Agreement includes a $3 million sublimit for the issuance of letters of credit thereunder. Interest for borrowings under the revolving facility accrues at a per annum rate equal to Prime Rate or SOFR (previously LIBOR) plus applicable margins of (i) (0.25%) for Prime Rate loans and (ii) 1.75% for SOFR (previously LIBOR) loans. The Credit Agreement includes a commitment fee on the unused portion of the revolving facility of 0.25% per annum payable quarterly.

The obligations of the Company and other borrowers under the Credit Agreement are secured by a blanket lien on all the assets of the Company and its subsidiaries. The Credit Agreement also includes customary representations and warranties and applicable reporting requirements and covenants. The financial covenants under the Credit Agreement include a minimum fixed charge coverage ratio, a maximum senior funded debt to EBITDA ratio and a maximum total funded debt to EBITDA ratio.

Bank debt balances consist of the following:

	March 31,		December 31,
	2024		2023
Term debt	$	-	$	-
Revolving debt		10,621,130		5,112,187
Total Bank debt		10,621,130		5,112,187
Less: current portion		-		-
Non-current bank debt		10,621,130		5,112,187
Less: unamortized debt costs		7,758		15,515
Net non-current bank debt	$	10,613,372	$	5,096,672

The Company had $19.4 million and $24.9 million available to borrow on the revolving credit facility at March 31, 2024 and  December 31, 2023, respectively. The increase in borrowings on the revolving credit facility during the period ended March 31, 2024 is related to the acquisition of Heany Industries for $6.6 million.