Note 13 - Debt

12 Months Ended

Jun. 30, 2017

Notes to Financial Statements

Debt Disclosure [Text Block]

13.

DEBT

Debt is comprised of the following (in thousands):

	June 30, 2017		June 30, 2016
Short-term and current maturities
Loan and Security Agreement	$	11,514	$	1,543
Long-term debt
Loan and Security Agreement, net of current portion	$	6,095	$	17,109
Total debt	$	17,609	$	18,652

Future maturities of debt are as follows (in thousands):

Fiscal Year
2018	$	11,514
2019		1,688
2020		1,765
2021		1,846
2022		796
Thereafter		-
Total	$	17,609

The Company completed the negotiations for an amended Loan and Security Agreement which includes a Line of Credit and a term loan and executed the new agreement as of

April 25, 2015.  

Borrowings under the Line of Credit

may

not

exceed

$23.0

million.  The agreement expires on

April 30, 2018

and has an interest rate of LIBOR plus

1.5%.

  The effective interest rate under the agreement for fiscal

2017

was

2.61%.

The material financial covenants of the amended Loan and Security Agreement are:

1

) funded debt to EBITDA, excluding non-cash and retirement benefit expenses (“maximum leverage”), cannot exceed

2.25

to

1;

2

) annual capital expenditures cannot exceed

$15.0

million;

3

) maintain a Debt Service Coverage Rate of a minimum of

1.25

to

1

and

4

) maintain consolidated cash plus liquid investments of

not

less than

$10.0

million at any time. As of

June 30, 2017,

the Company was in compliance with all the covenants. The Company expects to be able to meet the covenants in future periods.

On

November 22, 2011,

in conjunction with the Bytewise acquisition, the Company entered into a new

$15.5

million term loan (the “Term Loan”) under the then existing Loan and Security Agreement.  The Term Loan is a

ten

year loan bearing a fixed interest rate of

4.5%

and is payable in fixed monthly payments of principal and interest of

$160,640.

   As of

June 30, 2017,

$7.7

million of the term loan was outstanding.

Availability under the Line of Credit is 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 in excess of

$23.0

million.  As of

June 30, 2017,

the Company had borrowings of

$9.9

million under this facility. A

0.25%

commitment fee is charged on the unused portion of the Line of Credit.

The Company has

one

standby letter of credit totaling

$0.9

million which reduces the

$23.0

million available Line of Credit to

$22.1

million.  As of

June 30, 2017,

the Company has approximately

$12.2

million available on the Line of Credit.

The obligations under the Credit Facility are unsecured. In the event of certain triggering events, such obligations would become secured by the assets of the Company’s domestic subsidiaries. A triggering event occurs when the Company fails to achieve any of the financial covenants noted above in consecutive quarters.