Note 5 - Debt

6 Months Ended

Mar. 31, 2020

Notes to Financial Statements

Debt and Capital Leases Disclosures [Text Block]

5

. Debt

Credit Facility

On

January 28, 2016,

the Company entered into a credit facility (the Credit Facility). The operating company is the borrower under the Credit Facility and its obligations under the Credit Facility are guaranteed by the holding company and

VC2.

The Credit Facility is secured by a lien on substantially all of the Company’s assets. The amount available for borrowing under the Credit Facility is

$50.0

million, including a

$5.0

million sublimit for standby letters of credit. The Company has the right to borrow, prepay and re-borrow amounts under the Credit Facility at any time prior to the maturity date. The Credit Facility matures on

November 13, 2024.

For floating rate borrowings under the Credit Facility, interest is determined by the lender’s administrative agent based on the most recent compliance certificate of the operating company and stated at the base rate less the lender spread based upon certain financial measures. For fixed rate borrowings under the Credit Facility, interest is determined by quoted LIBOR rates for the interest period plus the lender spread based upon certain financial measures. The unused commitment fee is based upon certain financial measures.

The Credit Facility requires compliance with certain customary operational and financial covenants, including a leverage ratio. The Credit Facility also contains certain other customary limitations on the Company’s ability to incur additional debt, guarantee other obligations, grant liens on assets and make investments or acquisitions, among other limitations. Additionally, the Credit Facility prohibits the payment of cash dividends to the holding company from the operating company without the administrative agent’s consent, provided that so long as

no

default or event of default exists or would arise as a result thereof, the operating company

may

pay cash dividends to the holding company in an amount sufficient to allow the holding company to: (i) pay various audit, accounting, tax, securities, indemnification, reimbursement, insurance and other reasonable expenses incurred in the ordinary course of business and (ii) repurchase shares of common stock and pay dividends on the Company’s common stock in an aggregate amount

not

to exceed

$10.0

million during any fiscal year.

The Company had

$0

and

$5.7

million outstanding under the Credit Facility as of

March 31, 2020

and

September 30, 2019,

respectively.  As of each of

March 31, 2020

and

September 30, 2019,

the Company had undrawn, issued and outstanding letters of credit of

$1.0

million, which were reserved against the amount available for borrowing under the terms of the Credit Facility. The Company had

$49.0

million and

$43.3

million available for borrowing under the Credit Facility as of

March 31, 2020

and

September 30, 2019,

respectively.

As of

March 31, 2020

and

September 30, 2019,

the Company was in compliance with the financial covenants under the Credit Facility.

Lease Obligations

As of

September 30, 2019,

23

leases were classified as capital and financing lease obligations (see Note

7

). As a result of the Company’s adoption, effective

October 1, 2019,

of the new lease standard set out in ASC

842:

(i) the Company’s previous capital financing lease obligations were derecognized and reclassified as operating or finance leases and (ii) the Company’s previous capital lease obligations were classified as finance leases. As of

March 31, 2020,

the Company had

17

leases that were classified as finance leases.

No

rent expense is recorded for these finance leases (previously classified as capital and financing lease obligations); rather, rental payments under such leases are recognized as a reduction of the lease obligation and as interest expense. The interest rate on finance lease obligations, and legacy capital and financing lease obligations, is determined at the inception of the lease.

Interest

The Company incurred gross interest expense of approximately

$0.5

million and

$1.3

million for the

three

months ended

March 31, 2020

and

2019,

respectively, and approximately

$1.1

million and

$2.6

million for the

six

months ended

March 31, 2020

and

2019,

respectively. Interest expense for the

three

and

six

months ended

March 31, 2020

and

2019

relates primarily to interest on capital and financing lease obligations.  The Company capitalized interest of less than

$0.1

million for each of the

three

months ended

March 31, 2020

and

2019

and approximately

$0.1

million for each of the

six

months ended

March 31, 2020

and

2019.