Note 2 - Notes Payable and Long-term Debt

9 Months Ended

Sep. 30, 2017

Notes to Financial Statements

Debt Disclosure [Text Block]

2. N OTES PAYABLE AND LONG-TERM DEBT

On

September 18, 2015,

we executed a Promissory Note and Business Loan Agreement with BOKF, NA d/b/a Bank of Texas (“

BOKF”) which provides us with a line of credit facility of up to

$10,000,000

for the purpose of repurchasing shares of our common stock pursuant to our stock repurchase program, announced in

August 2015

and subsequently amended, which permits us to repurchase up to

2.2

million shares of our common stock at prevailing market prices through

August 2018. 

On

August 25, 2016,

this line of credit was amended to increase the availability from

$10,000,000

to

$15,000,000

for the repurchase of shares of our common stock through the earlier of

August 25, 2017

or the date on which the entire amount is drawn.  On

August 10, 2017,

this line of credit was further amended to extend the drawdown period and conversion date from

August 25, 2017

to

August 18, 2018

to align with our stock repurchase program. During this time period, we are required to make monthly interest-only payments. At the end of this time period, we expect that the principal balance will be rolled into a

4

-year term note. This Promissory Note is secured by a Deed of Trust on the real estate located at

1900

SE Loop

820,

Fort Worth, Texas.   There were

no

amounts drawn on this line during the

nine

months ended

September 30, 2017. 

For the

nine

months ended

September 30, 2016,

we drew approximately

$3.7

million on this line which was used to repurchase approximately

520,500

shares of our common stock.  At

September 30, 2017,

the unused portion of the line of credit was approximately

$7.6

million.

Also, on

September 18, 2015,

we executed a Promissory Note and Business Loan Agreement with BOKF which provides us with a line of credit facility of up to

$6,000,000

and is secured by our inventory.

   On

August 10, 2017,

this line of credit was amended to extend the maturity to

September 18, 2019. 

The Business Loan Agreement contains covenants that require us to maintain a funded debt to EBITDA ratio of

no

greater than

1.5

to

1

and a Fixed Charge Coverage Ratio greater than or equal to

1.2

to

1.

 Both ratios are calculated quarterly on a trailing

four

quarter basis. For the

nine

-month periods ended

September 30, 2017

and

2016,

there were

no

amounts drawn on this line.

Amounts drawn under either

facility accrue interest at the London interbank Eurodollar market rate for U.S. dollars (commonly known as “LIBOR”) plus

1.85%

(

3.086%

and

2.557%

at

September 30, 2017

and

December 31, 2016,

respectively).

T

he amount outstanding under the above agreements consisted of the following:

	9 /30/ 201 7		12/31/ 201 6
Line of Credit , as amended, up to $15,000,000 with features as more fully described above –matures September 18, 2022	$	7,371,730	$	7,371,730
Line of Credit , as amended, up to $6,000,000 with features as more fully described above – matures September 18, 2019		-		-
	$	7,371,730	$	7,371,730
Less current maturities		153,578		614,311
	$	7,218,152	$	6,757,419