Note 4 – Debt

The Company entered into a credit agreement (the “Credit Agreement”) on December 21, 2016. The Credit Agreement provided for secured financing of $50 million in aggregate at either LIBOR or Base (prime) interest rates plus an applicable margin, consisting of

(i) $45 million revolving credit facility (“Revolver”) maturing on December 21, 2019; and

(ii) $5 million term loan (“Term Loans”), requiring equal amortizing payments for 24 months.

As of December 31, 2017, the Company had $0 outstanding as Term Loans and $15.3 million outstanding under the Revolver. The interest rate on the revolving credit facility was 5.00%, as a Base Rate loan. The Revolver contains a lockbox mechanism.

As of December 31, 2016, the Company had $5 million outstanding as Term Loans and $22.5 million outstanding under the Revolver. The interest rate on the Term Loans was 4.25% and the interest rate on the revolving credit facility was also 4.25%, both were Base Rate loans.

The Company refinanced its credit facility in March 2016 with an amended and restated credit agreement (the “Amended Credit Agreement”). The Amended Credit Agreement provided for secured financing of $48,000 in the aggregate, consisting of

(i) $3 million in aggregate principal amount of term loans maturing on December 31, 2016 (the “Term B Loans”);

(ii) $20 million in aggregate principal amount of term loans maturing on March 16, 2018 (the “Term A Loans”); and

(iii) a $25 million revolving credit facility maturing on March 16, 2018.

On July 24, 2017, the Company entered into a mortgage with a local bank to provide financing for the purchase of a commercial building. The mortgage bears interest at 4.35% and requires monthly principal and interest payments, with the balance of the loan due on July 25, 2027.

The Credit Agreement and Amended Credit Agreement both contained certain covenants and restrictions including a fixed charge coverage ratio and a minimum EBITDA target and is secured by collateral consisting of a percentage of eligible accounts receivable, inventories, and machinery and equipment. As of December 31, 2017, the Company was in compliance with these covenants.

The following represents the Company’s long-term debt as of December 31, 2017 and December 31, 2016:


$'s in 000's	December 31, 2017		December 31, 2016
Term loans	$	—	$	5,000
Revolving credit facility		15,325		22,473
Mortgage		1,902		—
Net discount on debt and deferred financing fees		—		(92)
	$	17,227	$	27,381
Less current maturities of long-term debt		(44)		(2,223)
Total long-term debt	$	17,183	$	25,158

Future maturities of long-term debt, excluding the net discount on debt and deferred financing fees, as of December 31, 2017 are as follows:


($'s in 000's)
2018	$	44
2019		15,372
2020		48
2021		50
2022		52
Thereafter		1,661

The Company incurred debt issuance costs of $218 related to the Amended Credit Agreement during the first quarter of 2016. The debt transaction resulted in a loss on debt extinguishment of $993 thousand, which included the write off of unamortized debt issuance costs and debt discount, early termination fees, and legal costs.

The Company incurred debt issuance costs of $261 thousand related to the New Credit Agreement during 2016. This second refinancing transaction resulted in a loss on extinguishment of $688 thousand, which included the write off of unamortized debt issuance costs and debt discount, early termination fees, and legal costs.