8. Notes Payable and Long-Term Debt

3 Months Ended

Mar. 31, 2015

Debt Disclosure [Abstract]

8. Notes Payable and Long-Term Debt

Notes payable and long-term debt consisted of the following for the periods indicated (in thousands):

	March 31, 2015			December 31, 2014
Revolving line of credit with a U.S. bank up to $15,000 with interest at LIBOR plus 2.75%,  maturing July 15, 2017		15,000			15,000
Term loan with a U.S. bank with monthly payments of principal and interest at LIBOR plus 2.75%, maturing July 31, 2019		4,906			5,000
Revolving line of credit with a Taiwan bank up to $3,000 with interest based on the bank’s corporate interest rate index+ 1.5%, or 2.40% maturing on November 15, 2015		2,769			–
Revolving line of credit with a Taiwan bank up to $4,000 with interest at LIBOR plus 1.2% maturing on February 6, 2016		3,642			3,605
Revolving line of credit with a Taiwan bank up to $3,000 with interest at LIBOR plus 1.7% maturing on February 6, 2016		2,351			–
Revolving line of credit with a Taiwan bank up to $4,000 with interest at Taiwan Time Deposit Interest Rate Index plus 0.41% or LIBOR plus 1.28% maturing on November 27, 2015		3,572			3,536
Note payable to a finance company due in monthly installments with 4.95% interest, maturing July 30, 2015		255			443
Revolving line of credit with a China bank up to $3,200 with interest ranged from 0.76% to 1.66%, which mature in April and May 2015		2,557			1,064
Revolving line of credit with a China bank up to $7,200 with interest at 108% of China Prime rate, or 5.79%, maturing March 17, 2016		2,442			–
Total		37,494			28,648
Less current portion		(18,721	)		(9,591	)
Long term portion	$	18,773		$	19,057
Bank Acceptance Notes Payable
Bank acceptance notes issued to vendors with a zero percent interest rate, a 30% guarantee deposit of $434, and maturity dates ranging from April 2015 to September 2015		1,445			1,271

The current portion of long-term debt is the amount payable within one year of the balance sheet date of March 31, 2015. The one-month LIBOR rate was 0.15% on March 31, 2015.

Maturities of notes payable and long-term debt are as follows for the future one-year periods ending March 31 (in thousands):

2016		18,721
2017		16,132
2018		1,132
2019 thereafter		1,509
Total outstanding	$	37,494

The loan and security agreement in the U.S. with East West Bank included a $15.0 million revolving line of credit which matures on July 15, 2017. Also included with the same bank is a term loan of up to $5.0 million with monthly payments of principal and interest that matures on July 31, 2019. The interest rate on these loans is the LIBOR Borrowing Rate plus 2.75%. As of March 31, 2015, $15.0 million was outstanding under the revolving line of credit and $4.9 million was outstanding under the term loan.

On January 26, 2015, the Company entered into a construction loan agreement with East West Bank for up to $22.0 million dollars to finance the construction of its campus expansion plan in Sugar Land, Texas. The loan will have a fifteen month draw down period with monthly interest payments commencing on February 26, 2015 and ending April 26, 2016. Thereafter, the entire outstanding principal balance shall be converted to a sixty-nine month term loan with principal and interest payments due monthly amortized over three hundred months. The first principal and interest payment is due on May 26, 2016 and will continue the same day of each month thereafter. The final principal and interest payment is due on January 26, 2022 and will include all unpaid principal and all accrued and unpaid interest. The Company may pay without penalty all or a portion of the amount owed earlier than due. Under the loan agreement, the loan bears interest, at an annual rate based on the one-month LIBOR Borrowing Rate plus 2.75%. As of March 31, there were no amounts outstanding under this loan agreement.

The loan and security agreements with East West Bank require the Company to maintain certain financial covenants, including a minimum current ratio and minimum annual EBITDA. As of March 31, 2015, the Company was in compliance with all covenants contained in these agreements.

On January 6, 2015, the Company’s Taiwan location entered into a Credit Facility with CTBC Bank Co. Ltd. in Taipei, Taiwan for 90 million New Taiwan dollar ($3.0 million USD), one year revolving credit facility. Its obligations under the Credit Facility are unsecured. Borrowings under the Credit Facility will bear interest at a rate based on the Bank’s corporate interest rate index plus 1.5%, adjusted monthly. As of the execution of the Credit Facility the Bank’s corporate interest rate swap index is 0.91%. As of March 31, 2015, $2.8 million was outstanding under this credit facility.

On March 9, 2015, the Company’s Taiwan location renewed its $4.0 million, one year revolving credit facility agreement, originally dated December 31, 2013, with E. Sun Commercial Bank. Its obligations under the credit facility are secured by our $4.0 million cash deposit in a one-year CD with such bank and mature on February 6, 2016. The revolving line of credit bears interest at a rate equal to 1.78% for New Taiwan dollar borrowings and LIBOR plus 2.0% and a 0.10% service fee for U.S. dollar borrowings. As of March 31, 2015, $3.6 million was outstanding under this credit facility.

On March 9, 2015, the Company’s Taiwan location entered into an additional credit facility agreement with E. Sun Commercial Bank for a $3.0 million, one year revolving, unsecured credit facility, maturing on February 6, 2016. Borrowings under this credit facility will bear interest at a rate not less than the LIBOR borrowing rate plus 1.7%, divided by 0.946, and will also incur a 0.5% service fee. As of March 31, 2015, there are $2.4 million outstanding under this credit facility.

On March 25, 2015, the Company’s Taiwan location renewed its $4.0 million, one year revolving credit facility agreement, originally dated December 31, 2013, with Mega International Commercial Bank. Obligations under the credit facility are secured by a $4.0 million cash deposit in a one-year CD with such bank and mature on November 27, 2015. Borrowings under this credit facility will bear interest at a rate not less than the LIBOR borrowing rate plus 1.0%, divided by 0.946 for U.S. dollar borrowings, New Taiwan dollar borrowings interest will bear at a rate equal to the Bank’s base lending rate plus 0.76% and all other currency borrowings interest will bear at a rate equal to the Bank’s base lending rate plus 1.0% divided by 0.946. The current Bank base lending rate is 2.875%. As of March 31, 2015, $3.6 million was outstanding under this credit facility.

The Company’s Taiwan location had an outstanding note payable balance of $0.3 million with a financing company that matures on July 31, 2015.

As of March 31, 2015, the Company’s China subsidiary had credit facilities with China Construction Bank totaling $10.4 million, one line is U.S. currency based and the other is RMB currency based. As of March 31, 2015, the Company had a U.S. currency based loan of $2.6 million outstanding under various notes with three-month terms, maturing from April 2015 to May 2015. There was $2.4 million outstanding under the RMB currency based credit facility as of March 31, 2015, with a maturity date of March 17, 2016.

As of March 31, 2015, the Company had $32.1 million of unused borrowing capacity.