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Financing Arrangements - Schedule of Debt (Details) - USD ($)
$ in Thousands
May 31, 2021
Feb. 28, 2021
Debt, Long-term and Short-term, Combined Amount $ 6,989 $ 7,114
Less: current portion of long-term debt 500 500
Long-term debt 6,489 6,614
Less: debt issuance costs 1,229 652
Total long-term debt, net of debt issuance costs 5,260 5,962
Mortgages [Member]    
Debt, Long-term and Short-term, Combined Amount [1] 6,989 $ 7,114
Less: debt issuance costs $ 148  
[1]

On July 6, 2015, VOXX HQ LLC, the Company’s wholly owned subsidiary, closed on a $9,995 industrial development revenue tax exempt bond under a loan agreement in favor of the Orange County Industrial Development Authority (the “Authority”) to finance the construction of the Company's manufacturing facility and executive offices in Lake Nona, Florida. Wells Fargo Bank, N.A. ("Wells Fargo") was the purchaser of the bond and U.S. Bank National Association is the trustee under an Indenture of Trust with the Authority. Voxx borrowed the proceeds of the bond purchase from the Authority during construction as a revolving loan, which converted to a permanent mortgage upon completion of the facility in January 2016 (the "Florida Mortgage"). The Company makes principal and interest payments to Wells Fargo, which began March 1, 2016 and will continue through March of 2026. The Florida Mortgage bears interest at 70% of 1-month LIBOR plus 1.54% (1.17% at May 31, 2021) and is secured by a first mortgage on the property, a collateral assignment of leases and rents and a guaranty by the Company. The financial covenants of the Florida Mortgage are as defined in the Company’s Credit Facility with Wells Fargo dated April 26, 2016.

 

The Company incurred debt financing costs totaling approximately $332 as a result of obtaining the Florida Mortgage, which are recorded as deferred financing costs and included in Long-term debt as a contra-liability balance on the accompanying Consolidated Balance Sheets and are being amortized through Interest and bank charges in the Unaudited Consolidated Statements of Operations and Comprehensive Income over the ten-year term of the Florida Mortgage. The Company amortized $8 of these costs during both the three months ended May 31, 2021 and 2020. The net unamortized balance of these deferred financing costs as of May 31, 2021 is $148.

 

On July 20, 2015, the Company entered into an interest rate swap agreement in order to hedge interest rate exposure related to the Florida Mortgage and pays a fixed rate of 3.48% under the swap agreement (See Note 5).