Long-Term Debt
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Jun. 30, 2013
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Long-Term Debt |
NOTE 6 - Long-Term Debt
As
of June 30, 2013, long-term debt consisted of a revolving credit
facility of $11,000,000 (the “Revolving Credit
Facility”) which expires in June 2017 and two term loans, one
for $6,000,000 which expires in June 2019, and one for $6,500,000
which expires in June 2017 (the “Term Loans”).
Repayment of the Terms Loans commenced on September 30, 2012. The
$6,000,000 Term Loan is being repaid with 28 equal, quarterly
payments of $75,000 and the remaining balance of $3,900,000 due on
or before the expiration date. The $6,500,000 Term Loan is being
repaid in 20 equal, quarterly payments of $325,000.
Outstanding
balances and interest rates as of June 30, 2013 and June 30, 2012
are as follows:
The
Revolving Credit Facility and Term Loans (collectively the
“Agreement”) also provides for a LIBOR-based interest
rate option of LIBOR plus 2.0% to 2.75%, depending on the ratio of
outstanding debt to EBITDA, which is to be measured and adjusted
quarterly, a prime rate-based option of the prime rate plus 0.25%
and other terms and conditions as more fully described in the
Agreement. In addition, the Agreement provides for availability
under the Revolving Credit Facility to be limited to the lesser of
$11,000,000 or the result of a borrowing base formula based upon
the Company’s Accounts Receivables and Inventory values net
of certain deductions. The Company’s obligations under the
Agreement continue to be secured by all of its assets, including
but not limited to, deposit accounts, accounts receivable,
inventory, the Company’s corporate headquarters in
Amityville, NY, equipment and fixtures and intangible assets. In
addition, the Company’s wholly-owned subsidiaries, with the
exception of the Company’s foreign subsidiaries, have issued
guarantees and pledges of all of their assets to secure the
Company’s obligations under the Agreement. All of the
outstanding common stock of the Company’s domestic
subsidiaries and 65% of the common stock of the Company’s
foreign subsidiaries has been pledged to secure the Company’s
obligations under the Agreement.
The
Agreement contains various restrictions and covenants including,
among others, restrictions on payment of dividends, restrictions on
borrowings and compliance with certain financial ratios, as defined
in the Agreement.
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