Note 14 - Debt

12 Months Ended

Dec. 31, 2017

Notes to Financial Statements

Long-term Debt [Text Block]

(

14

)       

Debt

Long-term obligations consists of the following (in thousands):

	December 31,
	2017			2016
Current:
Current portion of capital lease obligations	$	829		$	208
Long Term:
Note payable – related party	$	6,500		$	6,500
Capital lease obligations		3,397			2,950
Less unamortized debt issuance and modification costs		(65	)		(125	)
Long term debt and capital lease obligations, net of unamortized debt costs	$	9,832		$	9,325

The weighted average interest rate for outstanding borrowings at

December

 

31,

 

2017

and

2016

was

8.0%

.

The weighted average interest rates for borrowings during the years ended

December 

31,

 

2017

and

2016

were

8.0%

and

10.4%,

respectively. The Company had

no

capitalized interest in

2017

or

2016.

Interest paid during the years ended

December 

31,

 

2017

and

2016

totaled approximately

$526,000

and

$3,579,000,

respectively.

Note Payable

– Related Party

The Company

has received the benefit of cash infusions from GFCM in the form of secured promissory note obligations totaling

$6,500,000

in principal as of

December 

31,

 

2017

and

2016.

GFCM is an entity controlled by the Company’s chairman, president and chief executive officer, Jeffrey T. Gill and

one

of our directors, R. Scott Gill. GFCM, Jeffrey T. Gill and R. Scott Gill are significant beneficial stockholders of the Company. The promissory note bears interest at a rate of

8.0%

per year until

March 31, 2019

and, thereafter, at the greater of

8.0%

or

500

basis points above the

five

-year Treasury note average during the preceding

90

-day period, in each case, payable.

During the

fourth

quarter of

2017,

the Company amended its secured promissory note with GFCM to, among other things: (i) extend the maturity dates for

$2,500,000

of the obligation to

April

 

1,

 

2021,

$2,000,000

to

April 1, 

2023

and the balance to

April 

1,

 

2025,

(ii) adjust the interest rate beginning on

April 

1,

 

2019

and on each

April 1

thereafter, to reflect the greater of

8.0%

or

500

basis points above the

five

-year Treasury note average during the previous

90

-day period, (iii) allow for up to an

18

-month deferral of payment for up to

60%

of the interest due on the notes maturing in

April

of

2021

and

2023,

and (iv) provide for a

first

security interest in substantially all assets, including those in Mexico.

Capital Lease Obligation

s

On

March 9, 2016,

the Company completed the sale of its

24

-acre Toluca property for

215,000,000

Mexican Pesos, or approximately

$12,182,000

in U.S. dollars. Simultaneously, the Company entered into a

ten

-year lease of the

9

acres and buildings currently occupied by the Company and needed for its ongoing business in Toluca (see Note

5

). As a result of the Toluca Sale-Leaseback, the Company has a capital lease obligation of

$2,949,000

for the building as of

December 

3,

 

2017.

In

January 2018,

the Company entered into a

36

-month capital lease for

$1,277,000

for new production equipment installed at its Sypris Electronics facility during

2017.

The future minimum payments for capital lease

s as of

December 

31,

2017

are as follows (in thousands):

2018	$	1,214
2019		927
2020		881
2021		580
2022		548
Thereafter		1,691
Total future payments		5,841
Less: Amount representing interest		(1,615	)
Present value of future minimum payments		4,226
Less: Current portion		(829	)
Long term portion	$	3,397