Debt

3 Months Ended

Dec. 31, 2020

Debt consists of:


	December 31, 2020		September 30, 2020
Revolving credit agreement	$	9,147	$	12,870
Foreign subsidiary borrowings	7,883		5,759
Finance lease obligations	70		80
Other, net of unamortized debt issuance costs $(18) and $(20), respectively	5,685		5,911



Total debt	22,785		24,620

Less – current maturities	(19,299)		(20,014)
Total long-term debt	$	3,486	$	4,606

Credit Agreement and Security Agreement of 2018

The Company's asset-based Credit Agreement ("Credit Agreement"), Security Agreement (“Security Agreement”) and Export Credit Agreement (the "Export Credit Agreement") are secured by substantially all the assets of the Company and its U.S. subsidiaries and a pledge of 66.67% of the stock of its first-tier non-U.S. subsidiaries. The $35,000 Credit Agreement consists of (i) a senior secured revolving credit facility with a maximum borrowing of $30,000, and (ii) a revolving commitment through the Export Credit Agreement of $5,000 which lends amounts to the Company on foreign receivables. The Credit Agreement also has an accordion feature, which allows the Company to increase maximum borrowings by up to $10,000 upon consent of the lender under the Credit Agreement (the "Lender") or upon additional lenders joining the Credit Agreement. The Credit Agreement matures on August 6, 2021.

The Credit Agreement contains affirmative and negative covenants and events of defaults. As set forth in the Credit Agreement, the Company is required to maintain a fixed charge coverage ratio ("FCCR") of 1.1:1.0 any time the availability is equal to or less than 12.5% of the revolving commitment. In the event of a default, the Company may not be able to access the revolver, which could impact the ability to fund working capital needs, capital expenditures and invest in new business opportunities. The total collateral at December 31, 2020 and September 30, 2020 was $26,724 and $26,964, respectively and the revolving commitment was $35,000 for both periods. Total availability at December 31, 2020 and September 30, 2020 was $16,767 and $13,284, respectively, which exceed both the collateral and total commitment threshold. Since the availability was greater than the 12.5% of the revolving commitment as of December 31, 2020 and September 30, 2020, the FCCR calculation was not required.

Borrowings will bear interest at the Lender's established domestic rate or LIBOR, plus the applicable margin as set forth in the Credit Agreement. The revolver has a rate based on LIBOR plus 1.5%, which was 1.7% at December 31, 2020 and September 30, 2020, respectively, and the Export Credit Agreement has a rate based on LIBOR plus 1.00% spread, which was 1.2% at December 31, 2020 and September 30, 2020, respectively. The Company also has a commitment fee of 0.25% under the Credit Agreement to be incurred on the unused balance of the revolver.

The Company's Credit Agreement is set to mature in less than twelve months. As such, the Company’s plan is to refinance. However, there are no guarantees that the refinance will be with similar terms to the current Credit Agreement, and if the refinance does not occur, the Company would not be able to meet its debt obligations.

Foreign subsidiary borrowings

Foreign debt consists of:


	December 31, 2020		September 30, 2020
Term loan	$	2,783	$	2,670
Short-term borrowings	3,018		2,620
Factor	2,082		469
Total debt	$	7,883	$	5,759

Less – current maturities	$	(5,892)	(3,544)
Total long-term debt	$	1,991	$	2,215

Receivables pledged as collateral	$	955	$	1,859

Interest rates on foreign borrowings are based on Euribor rates which range from 1.0% to 4.2%.

The Company factors receivables from one of its customers. The Company accounts for the pledge of receivables under this agreement as short-term debt and continues to carry the receivables on its consolidated condensed balance sheets.

Debt issuance costs

The Company incurred debt issuance costs as it pertains to the Credit Agreement in the amount of $212, and incurred additional costs in fiscal 2019 of $75 related to the First and Second Amendments, which is included in the consolidated condensed balance sheets as a deferred charge in other current assets, net of amortization of $229 and $205 at December 31, 2020 and September 30, 2020, respectively.

Other

On April 10, 2020, the Company entered into an unsecured promissory note under the Paycheck Protection Program (the “PPP Loan”). The PPP Loan to the Company was made through JPMorgan Chase Bank, N.A., a national banking association and the Company’s existing lender. The note has an aggregate principal amount of approximately $5,025, of which $261 was repaid in fiscal 2020 and has a two year term. The interest rate on the PPP Loan is 0.98%, which was deferred for the first six months of the term of the loan. The promissory note evidencing the PPP Loan contains customary events of default. The occurrence of an event of default may result in the repayment of all amounts outstanding, collection of all amounts owed from the Company, and/or filing suit and obtaining judgment against the Company. The loan proceeds were received on April 10, 2020 and were used for payroll, interest on mortgage obligations, rents on leases and utility payments. As of December 31, 2020 and September 30, 2020, the PPP loan balance was $4,764.

PPP Loan recipients can apply for and potentially be granted forgiveness for all or a portion of loans granted under the Paycheck Protection Program. Such forgiveness will be determined, subject to limitations, based on the use of loan proceeds for payroll costs and mortgage interest, rent or utility costs and the maintenance of employee and compensation levels. Although the Company intends to file for forgiveness, no assurance is provided that the Company will obtain forgiveness of the PPP Loan in whole or in part. As of December 31, 2020, the Company continues to wait for further guidance regarding application for the forgiveness for all or a portion of the PPP loan.