10. SHORT AND LONG-TERM DEBT

Short and long-term debt at December 31, 2016 and 2015 was as follows:




	December 31, 2016		December 31, 2015
Domestic asset-based revolving credit facility	$	3,218	$	4,674
Note payable		2,000		-
Foreign overdraft and letter of credit facility		1,243		913
Domestic term loan		5,250		4,250
Unamortized finance costs		(81)		-
Total debt		11,630		9,837
Less: Current maturities		(2,346)		(1,908)
Total long-term debt	$	9,284	$	7,929


	Payments Due by Year
	2017		2018		2019		2020		Thereafter		Total
Domestic credit facility	$	-	$	-	$	3,218	$	-	$	-	$	3,218
Domestic term loan		1,000		1,000		3,250		-		-		5,250
Note payable		333		667		667		333		-		2,000
Foreign overdraft and letter of credit facility		1,013		230		-		-		-		1,243
Total debt	$	2,346	$	1,897	$	3,917	$	333	$	-	$	11,711

Domestic Credit Facilities

The Company and its domestic subsidiaries are parties to a credit facility with The PrivateBank and Trust Company. The credit facility, as amended through December 31, 2016, provides for:

a $9,000 revolving credit facility, with a $200 sub facility for letters of credit. Under the revolving credit facility, the availability of funds depends on a borrowing base composed of stated percentages of the Company’s eligible trade receivables and eligible inventory, and eligible equipment less a reserve; and

a term loan in the original amount of $6,000.

In August 2016, the Company and its domestic subsidiaries entered into an Ninth Amendment to the Loan and Security Agreement and Waiver with The PrivateBank and Trust Company. The amendment, among other things:

amended the definition of EBITDA to permit the add back of certain transactions expenses and expense reductions;

amended the funded debt to EBITDA and fixed charge coverage covenants; and

waived a default in the funded debt to EBITDA covenant as of June 30, 2016.

All of the borrowings under this agreement have been characterized as either a current or long-term liability on our balance sheet in accordance with the repayment terms described more fully below.

Loans under the credit facility are secured by a security interest in substantially all of the assets of the Company and its domestic subsidiaries including a pledge of the stock of its domestic subsidiaries. Loans under the credit facility bear interest at varying rates based on the Company’s leverage ratio of funded debt / EBITDA, at the option of the Company, at:

the London InterBank Offered Rate (“LIBOR”) plus 2.50% to 4.00%, or

the base rate, which is the higher of (a) the rate publicly announced from time to time by the lender as its “prime rate” and (b) the Federal Funds Rate plus 0.5%, plus 0.00% to 1.25% ; in each case, depending on the Company’s leverage ratio.

Interest is payable monthly in arrears, except that interest on LIBOR based loans is payable at the end of the one, two or three month interest periods applicable to LIBOR based loans. IntriCon is also required to pay a non-use fee equal to 0.25% per year of the unused portion of the revolving line of credit facility, payable quarterly in arrears.

Weighted average interest on our domestic credit facilities was 4.36%, 3.68%, and 4.51% for 2016, 2015, and 2014, respectively.

The outstanding balance of the revolving credit facility was $3,218 and $4,674 at December 31, 2016 and 2015, respectively. The total remaining availability on the revolving credit facility was approximately $5,121 and $3,326 at December 31, 2016 and 2015, respectively.

The outstanding principal balance of the term loan, as amended, is payable in quarterly installments of $250. Any remaining principal and accrued interest is payable on February 28, 2019. IntriCon is also required to use 100% of the net cash proceeds of certain asset sales (excluding inventory and certain other dispositions), sale of capital securities or issuance of debt to pay down the term loan.

The borrowers are subject to various covenants under the credit facility, including a maximum funded debt to EBITDA, a minimum fixed charge coverage ratio and maximum capital expenditure financial covenants. Under the credit facility, except as otherwise permitted, the borrowers may not, among other things: incur or permit to exist any indebtedness; grant or permit to exist any liens or security interests on their assets or pledge the stock of any subsidiary; make investments; be a party to any merger or consolidation, or purchase of all or substantially all of the assets or equity of any other entity; sell, transfer, convey or lease all or any substantial part of its assets or capital securities; sell or assign, with or without recourse, any receivables; issue any capital securities; make any distribution or dividend (other than stock dividends), whether in cash or otherwise, to any of its equity holders; purchase or redeem any of its equity interests or any warrants, options or other rights to equity; enter into any transaction with any of its affiliates or with any director, officer or employee of any borrower; be a party to any unconditional purchase obligations; cancel any claim or debt owing to it; make payment on or changes to any subordinated debt; enter into any agreement inconsistent with the provisions of the credit facility or other agreements and documents entered into in connection with the credit facility; engage in any line of business other than the businesses engaged in on the date of the credit facility and businesses reasonably related thereto; or permit its charter, bylaws or other organizational documents to be amended or modified in any way which could reasonably be expected to materially adversely affect the interests of the lender. On March 9, 2017, the Company entered into an amendment with The PrivateBank to waive certain covenant violations at December 31, 2016 and reset certain financial covenant thresholds set forth in the credit facility. After giving effect to the waiver, the Company was in compliance with all applicable covenants under the credit facility as of December 31, 2016.

During 2014, the Company entered into interest rate swaps with The PrivateBank which are accounted for as effective cash flow hedges. The interest rate swaps had a combined initial notional amount of $3,750, with a portion of the swap amortizing on a basis consistent with the $250 quarterly installments required under the term loan. The interest rate swaps fix the Company's one month LIBOR interest rate on the notional amounts at rates ranging from 0.80% - 1.45%. We hold a right to cancel the interest rate swaps starting August 31, 2016. Interest rate swaps, which are considered derivative instruments, of $19 and $41 are reported in the consolidated balance sheets at fair value in other current liabilities at December 31, 2016 and 2015.

The debt issuance costs are being amortized over the related term utilizing the effective interest method and are included in interest expense and long-term debt and are being amortized over their estimated useful life on a straight-line basis. Debt issuance cost included in interest expense was $57, $72 and $56 for the years ended December 31, 2016, 2015, and 2014, respectively

Foreign Credit Facility

In addition to its domestic credit facilities, the Company’s wholly-owned subsidiary, IntriCon, PTE LTD., entered into an international senior secured credit agreement with Oversea-Chinese Banking Corporation Ltd. that provides for an asset based line of credit. Borrowings bear interest at a rate of .75% to 2.5% over the lender’s prevailing prime lending rate. Weighted average interest on the international credit facilities was 3.50%, 3.37% and 4.50% for the years ended December 31, 2016, 2015 and 2014. The outstanding balance was $1,243 and $913 at December 31, 2016 and 2015, respectively. The loans are collateralized by IntriCon, PTE’s restricted cash and receivables. The total remaining availability on the international senior secured credit agreement was approximately $455 and $817 at December 31, 2016 and 2015, respectively.

Note Payable

Hearing Help Express has a $2,000 note payable to a party holding 80% of its equity interest. The note is secured by substantially all of the assets of Hearing Help Express. The note is payable over 48 months in quarterly installments with interest at 5% per year, except that interest only will be paid in the first twelve months, with the deferred payments to be made at maturity.