Note 8 - Revolving Line of Credit and Long-term Debt

9 Months Ended

Mar. 31, 2017

Notes to Financial Statements

Debt Disclosure [Text Block]

NOTE

8

  -  REVOLVING LINE OF CREDIT AND LONG-TERM DEBT

In

February,

2017

the Company amended its line of credit to increase it to a

$100

million secured revolving line of credit, increased from the

$30

million line of credit that was previously in place. The increased credit line was required for the funding of the acquisition of Atlas Lighting Products, Inc. The line of credit expires in the

third

quarter of fiscal

2022.

Interest on the revolving line of credit is charged based upon an increment over the LIBOR rate as periodically determined, or at the bank’s base lending rate, at the Company’s option.  The increment over the LIBOR borrowing rate, as periodically determined, fluctuates between

125

and

250

basis points depending upon the ratio of indebtedness to earnings before interest, taxes, depreciation and amortization (“EBITDA”), as defined in the line of credit agreement. The increment over LIBOR borrowing rate will remain at

175

basis points for the next

twelve

months.  The fee on the unused balance of the

$100

million committed line of credit is

15

basis points.  Under the terms of this line of credit, the Company has agreed to a negative pledge of real estate assets and is required to comply with financial covenants that limit the ratio of indebtedness to EBITDA and require a minimum fixed charge coverage ratio. As of

March

31,

2017,

there was

$55.0

million borrowed against the line of credit, and

$45.0

million was available as of that date. Based on the terms of the line of credit and the final principal due date, the debt has been classified as long term. The line of credit closing fees and legal fees of

$199,000

have been recorded as a long term asset and are being amortized over the term of the line of credit.

The Company is in compliance with all of its loan covenants as of

March

31,

2017

.