Note 13 - Debt

12 Months Ended

Jun. 30, 2018

Notes to Financial Statements

Debt Disclosure [Text Block]

13.

DEBT

Debt is comprised of the following (in thousands):

	June 30, 2018		June 30, 2017
Short-term and current maturities
Loan and Security Agreement	$	1,688	$	11,514
Other loans		1,967		-
Long-term debt
Loan and Security Agreement, net of current portion		17,307		6,095
Total debt	$	20,962	$	17,609

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

Fiscal Year
2019	$	3,655
2020		1,765
2021		14,747
2022		795
2023		-
Thereafter		-
Total	$	20,962

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

January 30, 2018

in order to extend the maturity date of the Line of Credit.  Borrowings under the Line of Credit

may

not

exceed

$23.0

million.  The maturity date is now

April 30, 2021

and it has an interest rate of LIBOR plus

1.5%.

  The effective interest rate under the agreement for fiscal

2018

was

3.33%.

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, 2018,

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, 2018,

$6.1

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, 2018,

the Company had borrowings of

$12.9

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, 2018,

the Company has approximately

$9.2

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. 

In

December 2017,

the Company’s Brazilian subsidiary entered into

two

short-term loans with local banks in order to support the Company’s strategic initiatives.  The loans backed by the entity’s US dollar denominated export receivables were made with Santander Bank and Bradesco Bank and totaled

$3.5

million.  The Santander loan of

$1.5

million has a term of

180

days and a rate of

4.19%

and the Bradesco loan of

$2.0

million has a term of

360

days and a rate of

4.75%.

As of

June 30, 2018,

the outstanding balance on these loans was

$2.0

million.