Revolving Credit Facility

6 Months Ended

Jun. 30, 2021

Debt Disclosure [Abstract]

Revolving Credit Facility

Revolving Credit Facility

Our revolving credit facility, as amended, provides for maximum borrowings of $30.0 million. Under the line of credit, there is one standby letter of credit totaling $1.8 million. Borrowings available under the revolving credit facility at June 30, 2021 were $28.2 million. Interest on borrowings is payable monthly at LIBOR plus 2.0%. No fees are associated with the unused portion of the committed amount. We had no outstanding balance under the revolving credit facility at June 30, 2021 and December 31, 2020.

On July 26, 2021, the Company entered into a new revolving credit facility. The lender, borrowing terms, interest terms on borrowings, standby letter of credit, and fees associated with the unused portion of the committed amount are similar to the previous revolving credit facility. Additionally, the new revolving credit facility includes fallback language clearly defining an alternative reference rate which provides for specified replacement rates, as defined in the revolving credit facility agreement, upon a LIBOR cessation event. At the time of a LIBOR cessation event, the replacement rate self-executes without the need for negotiations or a formal amendment process.

The new revolving credit facility also contains financial covenants. As of June 30, 2021, we were in compliance with our financial covenants related to the new revolving credit facility. These financial covenants require that we meet certain parameters related to our consolidated leverage ratio and our consolidated total liabilities to tangible net worth ratio. At June 30, 2021, our consolidated leverage ratio was 0.01 to 1 and met the requirement of being less than 2 to 1. Our consolidated total liabilities to tangible net worth ratio was 0.3 to 1, and met the requirement of being less than 2 to 1.