Long-Term Debt and Capital Lease Obligations

Long-term debt and capital lease obligations as of June 30, 2016 and 2015 were comprised of the following:



	2016			2015
Term loan	$	72,187		$	—
Revolving facility	—			—
Contractor-owned, contractor-operated facility debt	21,344			—
Subordinated debt - note payable	5,146			—
Lease financing obligations	55			105
Capital lease obligations	—			166
Less deferred debt issuance costs	(1,150		)	—
	97,582			271
Less current portion	(18,339		)	(216		)
Long-term debt and capital lease obligations	$	79,243		$	55

Revolving Credit Facility

Previously, the Company and substantially all of its subsidiaries, were party to a secured credit agreement (the "Prior Credit Agreement") and related security documentation with Citizens Commercial Banking as lender, administrative agent, sole lead arranger, and sole book runner and JP Morgan Chase Bank, N.A. as lender and syndication agent. The Prior Credit Agreement provided the Company with a $75,000 five-year secured revolving credit facility with a sublimit of $15,000 available for the issuance of letters of credit. Pursuant to the terms of the Prior Credit Agreement, the Company could request an increase in the amount of the credit facility up to $95,000. The expiration date of the Prior Credit Agreement was April 16, 2018.

Amounts outstanding under the Prior Credit Agreement bore interest at the Base Rate (as defined, generally the prime rate) plus a margin of 1.00% to 1.50% or at LIBOR plus a margin of 2.00% to 2.50%, based on the ratio (measured over a trailing four-quarter period) of consolidated total debt to earnings before interest, taxes, depreciation and amortization ("EBITDA"), as defined. The Company's obligations under the Prior Credit Agreement were secured by a pledge of substantially all of its assets and guaranteed by its principal operating subsidiaries. The Prior Credit Agreement also contained cross-default provisions which became effective if the Company defaulted on other indebtedness.

Under the Prior Credit Agreement the Company was required to maintain a fixed charge coverage ratio of no less than 1.25 to 1.00 and to not permit its leverage ratio to exceed 2.00 to 1.00. The Prior Credit Agreement also required the Company to achieve minimum levels of Consolidated Adjusted EBITDA of $20,000 for the twelve-month periods ending June 30, 2015 and thereafter. The Prior Credit Agreement also limited the payment of cash dividends to $10,000 in aggregate during its term. The Company was in compliance with the financial covenants under the Prior Credit Agreement through its termination date.

As of June 30, 2015, the Company had no borrowings outstanding under the Prior Credit Agreement. Letters of credit outstanding were $2,048 as of June 30, 2015. Based upon the leverage covenant, the maximum availability under the Prior Credit Agreement was $75,000 as of June 30, 2015. Funds available to borrow under the Prior Credit Agreement, after consideration of the letters of credit outstanding and other indebtedness outstanding of $166, were $72,786 at June 30, 2015.

On November 30, 2015, the Company entered into a five-year credit agreement (the “New Credit Agreement”) with Citizens Bank, N.A. as lender, LC issuer, administrative agent, sole lead arranger, and sole book runner; BMO Harris Bank, N.A. as lender, LC issuer and syndication agent; KeyBank, N.A. as lender and document agent, and five other banks as lenders . The New Credit Agreement provides the Company with an aggregate borrowing capacity of $175,000, consisting of a $100,000 five-year secured revolving credit facility (“Revolving Facility”) with a sub-limit of $15,000 available for the issuance of letters of credit, as well as a five-year secured $75,000 term loan (“Term Loan”). The New Credit Agreement replaced the Prior Credit Agreement.

The proceeds of the Term Loan, together with cash on hand and proceeds from borrowing under the Revolving Facility, were used to pay the purchase price for Willbros Professional Services and to fund transaction costs incurred in connection with the Willbros Professional Services acquisition. The Revolving Facility will also be available for working capital and general corporate purposes. The Revolving Facility includes borrowing capacity for letters of credit and for borrowings on same-day notice, referred to as “swingline loans.” Borrowings under the Revolving Facility are subject to the satisfaction of customary conditions, including absence of defaults and accuracy of representations and warranties. The Company may request an increase in the amount of the New Credit Agreement up to an additional $75,000, which may be through additional term or revolving loans.

Borrowings outstanding under the Revolving Facility will mature on November 30, 2020. The Term Loan amortizes in quarterly installments payable on the last day of each March, June, September, and December, commencing on March 31, 2016 in amounts equal to 1.875% of the term loan made or outstanding, with the balance payable on November 30, 2020 (the "Term Loan Maturity Date.") In addition, the Company is required, subject to certain exceptions, to make payments on the Term Loan: (a) based on a stated percentage of Excess Cash Flow, either 50% or 0% depending on whether the Company's consolidated leverage ratio is above or below 2 times adjusted EBITDA as defined in the New Credit Agreement; (b) in an amount of 100% of net cash proceeds from asset sales subject to certain reinvestment rights; (c) in an amount of 100% of net cash proceeds of any issuance of debt other than debt permitted to be incurred under the New Credit Agreement; and, (d) in an amount of 100% of net cash proceeds from events of loss subject to certain reinvestment rights. The borrowings under the New Credit Agreement may be reduced, in whole or in part, without premium or penalty.

Amounts outstanding under the New Credit Agreement bear interest at the Base Rate (as defined, generally the prime rate) plus a margin of 0.50% to 1.25%, or at the Eurodollar Rate (as defined, generally the LIBOR rate) plus a margin of 1.50% to 2.25%, based on the Company's Leverage Ratio (as defined). In addition to these borrowing rates, there is a commitment fee which ranges from 0.20% to 0.375% on any unused commitments. The applicable fees for issuance of letters of credit under the Revolving Facility is a range from 1.50% to 2.25%.

The Company’s obligations under the New Credit Agreement are secured by a pledge of substantially all of its assets and guaranteed by its principal operating subsidiaries. The New Credit Agreement also contains cross-default provisions which become effective if the Company defaults on other indebtedness.

The New Credit Agreement contains various customary restrictive covenants that limit our ability to, among other things: incur additional indebtedness including guarantees; enter into sale/leaseback transactions; make investments, loans or acquisitions; grant or incur liens on our assets; sell our assets; engage in mergers, consolidations, liquidations or dissolutions; engage in transactions with affiliates; and make restricted payments. Under the New Credit Agreement the Company is required to maintain a fixed charge coverage ratio of no less than 1.25 to 1.00 and to not permit its leverage ratio to exceed 3.00 to 1.00. Additionally, the New Credit Agreement also limits the payment of cash dividends to $10,000 in aggregate during its term.

On November 30, 2015 the Company borrowed $102,000 under the New Credit Agreement to partially fund the aforementioned Willbros Professional Services acquisition. The borrowing was comprised of a full borrowing of the $75,000 term loan and a $27,000 borrowing under the Revolving Facility. Borrowings under the Term Loan bear interest at a stated rate of 2.32% and have an effective interest rate of 2.74% at June 30, 2016. As of June 30, 2016 the Company had no borrowings outstanding under the New Credit Agreement's Revolving Facility and $72,187 outstanding under the Term Loan. During fiscal 2016 the Company had borrowings and repayments of $66,000 under the New Credit Agreement's Revolving Facility. Funds available to borrow under the New Credit Agreement, after consideration of the letters of credit outstanding, were $97,221 at June 30, 2016. As of June 30, 2016, the Company was in compliance with all covenants under the New Credit Agreement.

In accounting for the transaction costs incurred in conjunction with the New Credit Agreement, the Company allocated the total costs incurred based on the relative fair values of the Revolving Facility and Term Loan. A total of $1,916 and $1,332 were allocated to the Revolving Facility and Term Loan, respectively.

As of June 30, 2016, the Term Loan consisted of the following:



Current portion of Term Loan	$	5,625

Long-term portion of Term Loan	$	66,562
Less: Debt issuance costs	(1,150		)
Net carrying amount	$	65,412

Contractor-Owned, Contractor-Operated facility debt

As of June 30, 2016, the Company recorded approximately $21,344 of debt obligations assumed in the Pipeline Services acquisition, of which $7,551 was current. A third party finance company had provided financing to Pipeline Services in conjunction with the construction of fueling facilities for the federal government. Upon acceptance of the constructed facilities, the federal government pays Pipeline Services in equal monthly installments over the subsequent five years pursuant to a contract. Therefore, as of June 30, 2016, the Company also recorded approximately $22,435 of receivables which were acquired in the transaction, of which $7,551 was current. These amounts were recorded within other assets and represent the amount due from the federal government for the construction of the fueling facilities.

As of June 30, 2016, the government has provided acceptance on all three of these contracts and final funding has been received on two contracts.

Other Notes Payable

In July 2015, the Company financed $5,632 of insurance premiums payable in eleven equal monthly installments of $517 each, including a finance charge of 1.99%. In December 2015, an additional $891 was financed in conjunction with the Pipeline Services acquisition, resulting in six remaining payments of $667. As of June 30, 2016, the balance outstanding under this agreement was $0.

In conjunction with the Pipeline Services acquisition, the Company was required to remit a second cash payment of $7,500 payable at the earlier of certain Willbros contract novations (or written approval of a subcontract) and Willbros obtaining certain consents, or March 15, 2016. The second cash payment was made in two tranches, with $2,354 paid in March 2016 and the remaining balance paid in July 2016 in conjunction with the final net working capital settlement.

Capital Lease Obligations

During fiscal years 2013 and 2012, the Company financed $1,160 and $756, respectively, of furniture, office equipment, and computer equipment under capital lease agreements which expired in fiscal years 2015 and 2016. The assets and liabilities under capital lease agreements were recorded at the lower of the present value of the minimum lease payments or the fair value of the asset. The assets were amortized over the shorter of their related lease terms or their estimated useful lives. Amortization of assets under capital leases was included in depreciation and amortization in the consolidated statements of operations. The final lease payments were made in the fiscal year ended June 30, 2016, with no future capital lease obligation remaining, and the underlying assets having been fully depreciated.

Future Minimum Long-Term Debt and Capital Lease Obligation Payments

Future minimum long-term debt payments (exclusive of unamortized deferred debt issuance costs) as of June 30, 2016 is as follows:



Fiscal Year	Debt		Lease Financing Obligations		Other Notes Payable		Total
2017	$	13,176	$	17	$	5,146	$	18,339
2018	11,359		17		—		11,376
2019	9,342		18		—		9,360
2020	9,437		3		—		9,440
2021	50,217		—		—		50,217
Thereafter	—		—		—		—
	$	93,531	$	55	$	5,146	$	98,732