Debt

3 Months Ended

Sep. 30, 2021

Debt Disclosure [Abstract]

Debt

DebtDebt is comprised of the following (in thousands):

	9/30/2021		6/30/2021
Short-term and current maturities
Loan and Security Agreement (Line of Credit)	12,409		9,153
Loan and Security Agreement (Term Loan)	1,494		1,509
Brazil Loans	8,094		5,297
	21,997		15,959
Long-term debt (net of current portion)
Loan and Security Agreement (Term Loan)	5,540		6,010
	$	27,537	$	21,969

On June 25, 2020, the Borrowers and TD Bank entered into an amendment and restatement (the “Amendment and Restatement”) of the Loan Agreement. The Amendment and Restatement waived the fixed charge coverage ratio for the quarter ended June 30, 2020. In addition, the Amendment and Restatement clarifies that certain non-cash adjustments to the definition of EBITDA are permitted under the Loan Agreement, as amended. In addition, the Amendment and Restatement increases the permitted borrowings from a foreign bank from $5.0 million to $15.0 million and permits the Company to draw the remainder of the outstanding balance under the Loan Agreement.

Pursuant to the terms of the Company’s Amended and Restated Loan and Security Agreement of June 25, 2020, the “First Amendment” to this loan agreement was executed on September 17, 2020, which include, among other things, (i) pause testing of the Fixed Charge Coverage Ratio until September 30, 2021 and (ii) establishment of a new minimum cumulative EBITDA and minimum liquidity covenants in lieu thereof. TD Bank updated its security interests in the Company’s U.S. based assets, increased the maximum interest charged on the Line Of Credit from and annual interest rate of 2.25% plus LIBOR to 3.50% plus Libor, and amended the borrowing base for the line of credit from 80% of Qualified AR and 50% of the lower of Cost or Market of US inventory values to 80% of qualified AR plus 85% of the Net Orderly Liquidation Value (NOLV) of US Inventory plus 62.5% of total appraised US real estate values. As a result of this change, the Company is projected to maintain its current borrowing capacity of $25,000,000 under the Line of Credit. The Company underwent a series of appraisals and field exams in all US locations as part of restructuring this agreement and will provide additional reporting supporting the borrowing base and covenants certifications. This minimum adjusted EBITDA covenant was based on the Company’s plan for a slow pandemic recovery throughout FY21 and the impact of the Company’s restructuring plan initiatives. The Company has applied certain proceeds from the sale of US real estate assets against the principle balance of the term loans under the TD Bank loan agreement. The Company will also apply certain proceeds from certain future sales against the principle balance of the term loans under the TD Bank loan agreement. The Agreement has reverted to the existing covenant package for the quarter ending September 30, 2021 and every quarter thereafter. The Company was compliant with the minimum liquidity requirement and the minimum adjusted cumulative EBITDA required bank covenants as of September 30, 2021.

On December 31, 2019, the Company entered into the Tenth Amendment of its Loan and Security Agreement (“Tenth Amendment”). Under the revised agreement, the credit limit for the Revolving Loan was increased from $23.0 million to $25.0 million. In addition, the Company entered into a new $10.0 million 5-year Term Loan with a fixed interest rate of 4.0%. The new Term Loan will require interest only payments for 12 months and will convert to a term loan requiring both interest and principal payments commencing January 1, 2021. Also, under the Tenth Amendment, the credit limit for external borrowing was increased from $2.5 million to $5.0 million.

Total debt increased $5.6 million during the three months ending September 30, 2021.  Availability under the Line of Credit remains subject to a borrowing base comprised of accounts receivable and inventory. The Company believes that the borrowing base will consistently produce availability under the Line of Credit of $25.0 million. A 0.25% commitment fee is charged on the unused portion of the Line of Credit.

The Company’s Brazilian subsidiary incurs short-term loans with local banks in order to support the Company’s strategic initiatives. The loans are backed by the entity’s US dollar denominated export receivables. The Company’s Brazilian subsidiary has the following loans of September 30, 2021 (in thousands):

Lending Institution	Interest Rate		Beginning Date	Ending Date	Outstanding Balance
Bradesco	2.37	%	December 2020	December 2021	$	595
Bradesco	4.74	%	December 2020	December 2021	551
Santander	5.98	%	February 2021	February 2022	1,250
Brazil Bank	2.80	%	May 2021	May 2022	1,398
Bradesco	1.88	%	July 2021	July 2022	1,300
Bradesco	2.05	%	August 2021	July 2022	400
Santander	2.15	%	August 2021	July 2022	1,200
Brazil Bank	2.10	%	August 2021	August 2022	1,400
					$	8,094