Note 5 - Notes Payable and Long-term Debt

12 Months Ended

Dec. 31, 2016

Notes to Financial Statements

Debt Disclosure [Text Block]

5.

NOTES PAYABLE AND LONG-TERM DEBT

On

September

18,

2015,

we executed a Promissory Note and Business Loan Agreement with BOKF, NA dba Bank of Texas (“BOKF”), which provides us with a line of credit facility of up to

$6,000,000

and is secured by our inventory. On

August

25,

2016,

this line of credit was amended to extend the maturity from

September

18,

2017

to

September

18,

2018.

The Business Loan Agreement contains covenants that we will maintain a funded debt to EBITDA ratio of no greater than

1.5

to

1

and that we will maintain a Fixed Charge Coverage Ratio greater than or equal to

1.2

to

1.

Both ratios are calculated quarterly and are based on a trailing

four

quarter basis.

Also on

September

18,

2015,

we executed a Promissory Note with BOKF, which provides us with a line of credit facility of up to

$10,000,000

for the purpose of purchasing our common stock. On

August

25,

2016,

this line of credit was amended to increase the availability from

$10,000,000

to

$15,000,000

for the purchase of shares of our common stock through the earlier of

August

25,

2017

or the date on which the entire amount is drawn. During this time period, we will make monthly interest-only payments. At the end of this time period, the principal balance will be rolled into a

4

-year term note. This Promissory Note is secured by a Deed of Trust on the real estate located at

1900

SE Loop

820,

Fort Worth, Texas. During the year ended

December

31,

2016,

we drew approximately

$3.7

million on this line of credit which was used to purchase approximately

520,500

shares of our common stock. At

December

31,

2016,

the unused portion of the line of credit was approximately

$7.6

million.

Amounts drawn under either Promissory Note accrue interest at the London interbank Eurodollar market rate for U.S. dollars (commonly known as “LIBOR”) plus

1.85%

(2.557%

and

2.263%

at

December

31,

2016

and

December

31,

2015,

respectively).

On

July

31,

2007,

we entered into a Credit Agreement and Line of Credit Note with JPMorgan Chase Bank, N.A., pursuant to which the bank agreed to provide us with a credit facility of up to

$5,500,000

to facilitate our purchase of real estate consisting of a

191,000

square foot building situated on

30

acres of land located at

1900

SE Loop

820

in Fort Worth, Texas. Proceeds in the amount of

$4,050,000

were used to fund the purchase of the property that is our corporate headquarters. On

April

30,

2008,

the principal balance was rolled into a

10

-year term note with an interest rate of

7.10%

per annum. We paid this note in full in

September

2015

and as a result of the early payoff, we incurred a prepayment penalty in the amount of

$200,000

which was included in interest expense in the

third

quarter of

2015.

On

July

12,

2012,

we executed a Line of Credit Note with JPMorgan Chase Bank, N.A., for a revolving credit facility of up to

$4

million, which was subsequently increased to

$6

million. The note expired on

September

30,

2015.

There was no balance owed on the line of credit at the expiration date.

At

December

31,

the amount outstanding under the above agreements consisted of the following:

	2016		2015
Business Loan Agreement with BOKF, NA – collateralized by real estate; payable as follows:
Line of Credit Note, as amended, in the maximum principal amount of $15,000,000 with features as more fully described above – interest due monthly at LIBOR plus 1.85%; matures September 18, 2021	$	7,371,729	$	3,711,225
Line of Credit Note, as amended, in the maximum principal amount of $6,000,000 with revolving features as more fully described above – interest due monthly at LIBOR plus 1.85%; matures September 18, 2018		-		-
	$	7,371,729	$	3,711,225
Less current maturities		614,311		231,952
	$	6,757,419	$	3,479,273

The terms of the above lines of credit contain various covenants for which we were in compliance as of

December

31,

2016

and

2015.

Scheduled maturities of the Company’s notes payable and long-term debt are as follows:

2017	$	614,311
2018		1,842,932
2019		1,842,932
2020		1,842,932
2021		1,228,622
	$	7,371,729