Note 10 - Debt

3 Months Ended

Sep. 30, 2019

Notes to Financial Statements

Debt Disclosure [Text Block]

Note

10

:   Debt

Debt is comprised of the following (in thousands):

	0 9 / 3 0 /2019		6/30/201 9
Short-term and current maturities
Loan and Security Agreement	$	1,785	$	1,765
Other loans		2,194		2,300
		3,979		4,065
Long-term debt
Loan and Security Agreement, net of current portion		19,088		17,541
	$	23,067	$	21,606

The Company amended its Loan and Security Agreement, which includes a Line of Credit and a Term Loan (“Credit Facility”), in

January 2018.  

Borrowings under the Line of Credit

may

not

exceed

$23.0

million.  The Line of Credit has an interest rate of LIBOR plus

1.5%,

and expires on

April 30, 2021. 

The effective interest rate on the Line of Credit under the Loan and Security Agreement for the

three

months ended

September 30, 2019

and

2018

was

3.9%

and

3.8%,

respectively. As of

September 30, 2019,

$16.9

million was outstanding on the Line of Credit.

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 of

$23.0

million. A

0.25%

commitment fee is charged on the unused portion of 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 below in consecutive quarters.

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

1

) funded debt to EBITDA, excluding non-cash and retirement benefit expenses (“maximum leverage”),

not

to exceed

2.25

to

1.00,

2

) annual capital expenditures

not

to exceed

$15.0

million,

3

) maintain a Debt Service Coverage Rate of a minimum of

1.25

to

1.00,

and

4

) maintain consolidated cash plus liquid investments of

not

less than

$10.0

million at any time.  As of

September 30, 2019,

the Company was in compliance with all the financial debt covenants related to its Loan and Security Agreement.

On

November 22, 2011,

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

$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.

  The Term Loan had a balance of

$4.0

million at

September 30, 2019.

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. In

February 2019,

the Company’s Brazilian subsidiary, again, began refinancing debt among Santander, Bradesco and Brazil Bank as follows (in thousands) as of 

9/30/2019:

Lending Institution	Interest Rate		Beginning Date	Ending Date	Outstanding Balance
Santander		5.30%	February 2019	February 2020	$	432
Bradesco		4.27%	March 2019	March 2020		262
Bradesco		4.00%	April 2019	April 2020		1,000
Brazil Bank		3.11%	September 2019	September 2020		500
					$	2,194