Note 2 - Notes Payable and Long-term Debt

3 Months Ended

Mar. 31, 2018

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

$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 requires 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 and are based on a trailing

four

quarter basis.  For the

three

-month periods ended

March 31, 2018

and

2017,

there were

no

amounts drawn on this line.

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

$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.   For the quarter ended

March 31, 2018,

we drew approximately

$541,000

on this line which was used to purchase

72,400

shares of our common stock.  There were

no

amounts drawn on this line during the quarter ended

March 31, 2017. 

At

March 31, 2018,

the unused portion of the line of credit was approximately

$7.1

million.

Amounts drawn under either Promissory Note accrue interest at the London interbank Eurodollar market rate for U.S. dollars (commonly known as “LIBOR”) plus

1.85%

(

3.672%

and

3.351%

at

March 31, 2018

and

December 31, 2017,

respectively).

At

March 31, 2018

and

December 31, 2017,

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

	201 8		201 7
Business Loan Agreement with BOKF – collateralized by real estate; payable as follows:
Line of Credit Note, as amended, in the maximum principal amount of $15,000,000 with features as more fully described above – interest due monthly at LIBOR plus 1.85%; matures September 18, 2022	$	7,912,670	$	7,371,730
Line of Credit Note, as amended, in the maximum principal amount of $6,000,000 with revolving features as more fully described above – interest due monthly at LIBOR plus 1.85%; matures September 18, 2019		-		-
	$	7,912,670	$	7,371,730
Less current maturities		1,153,931		614,311
	$	6,758,739	$	6,757,419

The terms of our lines of credit contain various covenants with which we were in compliance as of

March 31, 2018

and

December 31, 2017.