

8.	DEBT

The Company’s outstanding debt at March 31, 2019 and December 31, 2018 was as follows:



	March 31, 2019			December 31, 2018
Oaktree Facility	$	71,602		$	74,571
Notes and deferred payments to sellers, Tealstone acquisition	11,460			13,572
Notes payable for construction and transportation equipment	474			612
Total debt	83,536			88,755

Less - Current maturities of long-term debt	(393		)	(2,899		)
Less - Unamortized deferred loan costs	(6,220		)	(6,739		)
Total long-term debt	$	76,923		$	79,117

Oaktree Facility—At March 31, 2019, the Company had $71,602 outstanding under a $85,000 term loan with Wilmington Trust, National Association, as agent, and the lenders party thereto (the “Oaktree Facility”). The Oaktree Facility is secured by substantially all of the assets of the Company and its subsidiaries. Interest on the Oaktree Facility is equal to the one-, two-, three- or six-month London Interbank Offered Rate, or LIBOR, plus 8.75% per annum on the unpaid principal amount of the Oaktree Facility, subject to adjustment under certain circumstances, and is generally payable monthly. There are no amortized principal payments; however, the Company is required to prepay the Oaktree Facility, and in certain cases pay a prepayment premium thereon, with proceeds received from the issuances of debt or equity, transfers, events of loss and extraordinary receipts. The Company is required to make an offer quarterly to the lenders to prepay the Oaktree Facility in an amount equal to 75% of its excess cash flow, plus accrued and unpaid interest thereon and a prepayment premium.

Notes and Deferred Payments to Sellers—At March 31, 2019, the Company had $11,460 outstanding of the $5,000 of Promissory Notes and approximately $9,900 of deferred cash payments net of debt discounts, issued as part of the Tealstone Acquisition. During the three months ended March 31, 2019, the Company paid approximately $2,400 of the deferred cash payments. The remaining principal amounts of $5,000 of Promissory Notes and $7,500 of deferred cash payments are due on April 3, 2020. Based on a 12% discount rate, the Company recorded $11,600 as notes and deferred payments to sellers in long-term debt on its Condensed Consolidated Balance Sheet at the acquisition closing date. Accreted interest for the period was approximately $300 for each of the three months ended March 31, 2019 and 2018, and was recorded as interest expense.

Notes Payable for Construction and Transportation Equipment—The Company has purchased and financed various construction and transportation equipment to enhance the Company’s fleet of equipment. The total long-term notes payable related to the purchase of financed equipment was approximately $500 and $600 at March 31, 2019 and December 31, 2018, respectively. The purchases have payment terms ranging from 3 to 5 years and the associated interest rates range from 2.99% to 6.92%.

Compliance—The Oaktree Facility contains various covenants that limit, among other things, the Company’s ability and certain of its subsidiaries’ ability to incur certain indebtedness, grant certain liens, merge or consolidate, sell assets, make certain loans, enter into acquisitions, incur capital expenditures, make investments, and pay dividends. In addition, the Company is required to maintain the following principal financial covenants:


•	a ratio of secured indebtedness to EBITDA of not more than 2.00 to 1.00 for the trailing four consecutive fiscal quarters ending March 31, 2019, reducing to 1.80 to 1.00 for the four consecutive quarters ending September 30, 2019 through maturity in 2022;


•	daily cash collateral of not less than $15,000;


•	gross margin in contract backlog of not less than $70,000 for the average of the trailing four consecutive fiscal quarters;


•	net capital expenditures during the trailing four consecutive fiscal quarters shall not exceed $15,000;


•	bonding capacity shall be maintained at all times in an amount not less than $1,000,000; and


•	the EBITDA of Tealstone Residential Concrete, Inc. shall not be less than $12,000 for each of the trailing four consecutive fiscal quarters.

The Company is in compliance with these covenants at March 31, 2019.