Note 9 - Debt

9 Months Ended

Sep. 30, 2020

Notes to Financial Statements

Debt Disclosure [Text Block]

9.  DEBT

The Company has a Credit and Security Agreement with KeyBank National Association (as amended, the "credit agreement" or the "CSA").  The CSA consists of (i) a term loan, with outstanding borrowings of $104.8 million and $113.0 million at September 30, 2020 and December 31, 2019, respectively, and (ii) a $75 million revolving credit facility (“Revolver”), with $22.0 million and $32.0 million in outstanding borrowings at  September 30, 2020 and  December 31, 2019, respectively.  The CSA has a maturity date of December 11, 2022.  At September 30, 2020 and December 31, 2019, the carrying value of the debt on the condensed consolidated balance sheet is reflected net of $1.4 million and $1.3 million, respectively, of deferred financing costs. 

On February 18, 2020, the Company further amended its credit agreement whereby the Company voluntarily prepaid a portion of its term loan under the credit agreement in the amount of $8.2 million. The amendment also served to modify the interest rate and fees applicable to the loans under the credit agreement and change certain covenants related to matters including acquisitions, share repurchases and financial ratios.  During the third quarter of 2020, the Company repaid $10.0 million toward its Revolver balance.  Subsequent to the September 30, 2020 balance sheet date, the Company made an incremental voluntary payment toward its Revolver balance of $10.0 million during October.

The weighted-average interest rate in effect was 2.44% at September 30, 2020 and 3.31% at December 31, 2019 and consisted of LIBOR plus the Company’s credit spread, as determined per the terms of the CSA.  The Company incurred $1.2 million and $1.3 million of interest expense during the three months ended September 30, 2020 and September 30, 2019, respectively.  The Company incurred $3.8 million and $4.1 million of interest expense during the nine months ended September 30, 2020 and September 30, 2019, respectively.

The CSA contains customary representations and warranties, covenants and events of default and financial covenants that measure (i) the ratio of the Company's total funded indebtedness, on a consolidated basis, to the amount of the Company’s consolidated EBITDA, as defined (“Leverage Ratio”) and (ii) the ratio of the amount of the Company’s consolidated EBITDA to the Company’s consolidated fixed charges ("Fixed Charge Coverage Ratio"). If an event of default occurs, the lenders under the CSA would be entitled to take various actions, including the acceleration of amounts due thereunder and all actions permitted to be taken by a secured creditor.  At September 30, 2020, the Company was in compliance with its debt covenants, including its most restrictive covenant, the Leverage Ratio.