Note 4 - Financing Arrangements

6 Months Ended

Jun. 30, 2019

Notes to Financial Statements

Debt Disclosure [Text Block]

NOTE

4.

FINANCING ARRANGEMENTS

We have a credit agreement with Bank of America which was entered into on

June 15, 2017

and amended effective

December 29, 2017

and provides for a line of credit arrangement of

$16,000

that expires on

June 

15,

2022.

The credit arrangement also has a

$5,000

real estate term note outstanding with a maturity date of

June 15, 2022.

Under the Bank of America credit agreement, both the line of credit and real estate term notes are subject to variations in the LIBOR rate. Our line of credit bears interest at a weighted-average interest rate of

5.8%

and

4.5%

as of

June 30, 2019

and

2018,

respectively. We had borrowings on our line of credit of

$12,297

and

$9,264

outstanding as of

June 30, 2019

and

December 31, 2018,

respectively. There are

no

subjective acceleration clauses under the credit agreement that would accelerate the maturity of our outstanding borrowings.

The line of credit and real estate term notes with Bank of America contain certain covenants which, among other things, require us to adhere to regular reporting requirements, abide by annual shareholder dividend limitations, maintain certain financial performance, and limit the amount of annual capital expenditures. The availability under our line is subject to borrowing base requirements, and advances are at the discretion of the lender. The line of credit is secured by substantially all of our assets.

The BofA credit agreement as amended provides for, among other things, a fixed charge coverage ratio of

not

less than (i) 

1.0

to

1.0

for each period of

four

fiscal quarters, commencing with the period of

four

fiscal quarters ending

December 31, 2018.

As of

June 30, 2019

we did

not

meet the fixed charge coverage ratio which was waived by BofA in the

second

amendment to the credit agreement received on

August 13, 2019.

The availability under the line is subject to borrowing base requirements, and advances are at the discretion of the lender. At

June 30, 2019,

we had unused availability under our line of credit of

$3,703,

supported by our borrowing base. The line is secured by substantially all of our assets.

As part of the

July 1, 2015

Devicix acquisition we entered into

two

unsecured subordinated promissory notes payable to the seller in the principal amounts of

$1,000

and

$1,300,

which was fully paid off during the

three

months ended

June 30, 2019.

In the

second

quarter of

2019,

our China operations entered into a line of credit arrangement with China Construction Bank which provides for a line of credit arrangement of

6,000,000

Renminbi (RMB) that expires on

April 3, 2021.

This line of credit bears an interest rate of

6%

and we had borrowings of

3,006,204

RMB (

$437

) at

June 30, 2019.

Long-term debt at

June 30, 2019

and

December 30, 2018

consisted of following:

	June 30,			December 31,
	2019			2018
Real estate term notes bearing interest at one-month LIBOR + 2.25% (4.8% as of June 30, 2019 and December 31, 2018) maturing June 15, 2022 with monthly payments of approximately $41 plus interest secured by substantially all assets.	$	4,004		$	4,253
China letter of credit arrangement		437			-
Devicix Acquistion Note 1 payable to DeLange Holdings bears interest rate of 4.0% per annum, maturing July 1, 2019		-			156
Devicix Acquistion Note 2 payable to DeLange Holdings bears interest rate of 4.0% per annum, maturing July 1, 2019		-			203
		4,441			4,612
Discount on Devicix Notes Payable		-			(23	)
Debt issuance Costs		(162	)		(185	)
Total long-term debt		4,279			4,404
Current maturities of long-term debt		(878	)		(780	)
Long-term debt - net of current maturities	$	3,401		$	3,624