6. LONG-TERM DEBT

3 Months Ended

Mar. 31, 2016

Debt Disclosure [Abstract]

LONG-TERM DEBT

Long-term debt consisted of the following:

	March 31, 2016		December 31, 2015
Whitney credit facility	$	–	$	2,747
Total long-term debt		–		2,747
Less: Current portion of long-term debt		–		(2,747	)
Long-term debt, net of current portion	$	–	$	–

Credit Facility

Since 2008, we have maintained a credit facility (the “Facility”) with Whitney Bank.  The Facility has been amended and restated several times, most recently effective June 30, 2015 when we entered into the eighth amendment (“Eighth Amendment”).

The relevant terms of the Eighth Amendment include:

· an extension of the maturity date of the revolving credit facility (“Revolving Credit Facility”) to June 30, 2016;

· a modification of the interest rate with respect to the Revolving Credit Facility to 4.0 percent per annum;

· a modification of certain financial covenants, specifically the Leverage Ratio and Fixed Charge Coverage Ratio (see further discussion below); and

· a requirement that we maintain a compensating balance of $3,900 in our existing interest-bearing account at Whitney, to continue until such time as we have regained compliance with all of our covenants under the Facility for two consecutive quarters commencing with the quarter ended June 30, 2015.

Other current relevant terms of the Facility include:

· a committed amount of $5,000 under the Revolving Credit Facility, subject to a borrowing base limitation based on eligible trade accounts receivable;  the Revolving Credit Facility may be used to borrow cash (at  an interest rate of 4.0 percent per annum) or to issue bank letters of credit (at a fee of 1.0 percent per annum);  both cash borrowings and the issuance of bank letters of credit reduce the available capacity under the Revolving Credit Facility; the available borrowing and letter of credit capacity under the Revolving Credit Facility at March 31, 2016 was $3,044;

· a real estate term facility (“RE Term Facility”) of $2,000, at an interest rate of 4.0 percent per annum, maturing April 15, 2018, with the Company being obligated to make monthly increasing repayments of principal (along with accrued and unpaid interest thereon) at an amount of $9, beginning April 1, 2013, while there is any amount outstanding;

· a carousel term facility (“Carousel Term Facility”) of $2,200, at an interest rate of 3.5 percent per annum, maturing October 15, 2016, with the Company being obligated to make monthly repayments of principal of $65 (along with accrued and unpaid interest thereon) beginning July 1, 2014, while there is any amount outstanding; and

· outstanding balances under the Facility are secured by all of the Company’s assets.

In March 2016, we paid off the RE Term Facility and the Carousel Term Facility with proceeds received from the sale of our Channelview location. As of March 31, 2016, the Company’s indebtedness under the Facility was $0.

As mentioned above, our Facility obligates us to comply with certain financial covenants. They are as follows:

· Leverage Ratio - The ratio of total net debt to consolidated EBITDA must be less than 3.0 to 1.0; actual Leverage Ratio as of March 31, 2016:  0.00 to 1.0. Having no debt outstanding at March 31, 2016 resulted in our ratio of 0.00 to 1.0.

· Fixed Charge Coverage Ratio - The ratio of consolidated EBITDA to consolidated net interest expense, plus principal payments on total debt, must be greater than 1.4 to 1.0; actual Fixed Charge Coverage Ratio as of March 31, 2016:  1.41 to 1.0.  

· Tangible Net Worth - Our consolidated net worth, after deducting other assets as are properly classified as “intangible assets,” plus 50 percent of net income, after provision for taxes, must be in excess of $16,700; actual Tangible Net Worth as of March 31, 2016:  $23,183.

· Moreover, we continue to have obligations for other covenants, including, among others, limitations on issuance of common stock, liens, transactions with affiliates, additional indebtedness and permitted investments. 

As of March 31, 2016, we were in compliance with all of our financial covenants.