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Note 6 - Debt
12 Months Ended
Dec. 31, 2017
Notes to Financial Statements  
Debt Disclosure [Text Block]
Note
6
- Debt
 
Credit Facilities
 
On
May 31, 2017,
Ultralife Corporation entered into a Credit and Security Agreement (the “Credit Agreement”) and related security agreements with KeyBank National Association (“KeyBank” or the “Bank”) to establish a
$30,000
senior secured, cash flow-based, revolving credit facility that includes a
$1,500
letter of credit subfacility (the “Credit Facility”). The Credit Agreement provides that the Credit Facility
may
be increased with the Bank
’s concurrence to
$50,000
prior to the last
six
months of the term and is scheduled to expire on
May 30, 2020.
The Credit Facility replaces the Company’s asset-based revolving credit facility with PNC Bank National Association which expired in accordance with its terms on
May 24, 2017 (
the “Prior Credit Agreement”).
 
The Credit Facility provides the Company with an aggregate of up to
$30,000
of loan and letter of credit availability determined based on a borrowing base formula. The Company
may
use advances under the Credit Facility for general working capital purposes, to reimburse drawings under letters of credit and to fund capital expenditures and acquisitions, all subject to the terms of the Credit Agreement. The Company had
no
amounts drawn under the Prior Credit Agreement at the time of its expiration and has
not
borrowed under the Credit Facility.
 
Interest will accrue on outstanding indebtedness under the Credit Agreement at the Overnight LIBOR Rate plus the applicable margin, or at the Base Rate plus the applicable margin, as selected by the Company. During the period beginning
May 31, 2017
and ending
April 1, 2018,
the applicable margin for Overnight LIBOR Loans is
185
basis points, the applicable margin for Base Rate Loans is negative
50
basis points and applicable margin for the Unused Fee is
20
basis points. Beginning
April 2, 2018
and thereafter, the applicable margins will be determined based on the chart below.
 
 
Consolidated Senior Leverage Ratio
 
Applicable Basis
Points for Overnight
LIBOR Loans
   
Applicable Basis
Points for
Base Rate Loans
   
Applicable Basis
Points for Unused
Fee
 
 
Less than 1.50 to 1.00
   
185
     
(50)
     
20
 
 
Greater than or equal to 1.50 to 1.00 but less than 2.50 to 1.00
   
200
     
(25)
     
15
 
 
Greater than or equal to 2.50 to 1.00
   
215
     
0
     
10
 
 
The Company must pay a fee on its unused availability equal to the applicable margin for the Unused Fee and customary letter of credit fees.
 
In addition to the affirmative and negative covenants, the Company must maintain a fixed charge coverage ratio of
1.15
to
1.0,
tested each fiscal quarter for the trailing
four
fiscal quarters, and a minimum tangible net worth of
$40,000,
tested as of the end of each calendar year. The Company was in full compliance with its covenants as of
December 31, 2017.
 
Any outstanding borrowings must be repaid upon expiration of the term of the Credit Facility. Payments must be made during the term to the extent outstanding borrowings exceed the maximum amount then permitted to be drawn as borrowings under the Credit Facility and from the proceeds of certain transactions. Upon the occurrence of an event of default, the outstanding obligations of the Company under the Credit Facility
may
be accelerated in addition to the other remedies available to the Bank under the terms of the Credit Agreement. The Credit Facility is secured by substantially all the assets of the Company.
 
As of
December 31,
201
7,
we had
no
outstanding balance under the Credit Facility and
no
outstanding letters of credit related to the Credit Facility.