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Senior Debt | 12 Months Ended
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Dec. 31, 2017
Debt Disclosure [Abstract] |
Senior Debt |
9. | Senior debt
Debt consisted of the following at December 31, 2017 and 2016:
(Table only in thousands) |  | 2017 |  |  | 2016 |
Outstanding borrowings under Credit Facility (defined below). Term loan payable in quarterly principal installments of $2.0 million through September 2018, $2.5 million thereafter with balance due upon maturity in September 2020. |  |  |  |  |  |  |  |
– Term loan |  | $ | 113,903 |  |  | $ | 125,072 |
– U.S. Dollar revolving loans |  |  | 1,000 |  |  |  | — |
– Unamortized debt discount |  |  | (2,834 | ) |  |  | (3,175 | )
Total outstanding borrowings under Credit Facility |  |  | 112,069 |  |  |  | 121,897 |
Outstanding borrowings (U.S. dollar equivalent) under China Facility (defined below) |  |  | — |  |  |  | 1,296 |
Outstanding borrowings (U.S. dollar equivalent) under Aarding Facility (defined below) |  |  | 2,764 |  |  |  | — |
Total outstanding borrowings |  | $ | 114,833 |  |  | $ | 123,193 |
Less: current portion |  |  | 11,296 |  |  |  | 8,827 |
Total debt, less current portion |  | $ | 103,537 |  |  | $ | 114,366 |
During the year ended December 31, 2017, the Company made prepayments of $4.3 million on the outstanding balance of the term loan. Scheduled principal payments under our Credit Facility are $8.5 million in 2018, $10.0 million in 2019, and $96.4 million in 2020. United States Debt The Company entered into a credit agreement (the “Credit Agreement”) with various lenders (the “Lenders”) and letter of credit issuers (each, an “L/C Issuer”), and Bank of America, N.A., as Administrative Agent (the “Agent”), swing line lender and an L/C Issuer, providing for various senior secured credit facilities (collectively, the “Credit Facility”). On September 3, 2015, concurrent with the closing of the PMFG acquisition, the Company amended and restated the Credit Agreement. Pursuant to the amended and restated Credit Agreement, the Lenders provided a term loan in an aggregate principal amount of $170.0 million and the Lenders decreased their senior secured U.S. dollar revolving credit commitments to the aggregate principal amount of $60.5 million. All other provisions of the agreement remained substantially unchanged, including the $19.5 million senior secured multi-currency revolving credit facility for U.S. dollar and specific foreign currency loans. The proceeds from the increased term loan were used primarily to (i) finance the cash portion of the PMFG purchase price, (ii) pay off certain outstanding indebtedness of the Company and its subsidiaries (including certain indebtedness of PMFG and its subsidiaries), and (iii) pay certain fees and expenses incurred in connection with the amendment to the Credit Agreement and the PMFG acquisition. The Company amended the Credit Facility as of June 9, 2017. The Credit Facility was amended to, among other things, (a) modify the calculation of Consolidated EBITDA and Consolidated Fixed Charges to exclude certain pro forma adjustments related to certain acquisitions and other transactions and (b) modify the Consolidated Leverage Ratio covenant. The Company amended the Credit Facility as of October 31, 2017. The Credit Facility was amended to, among other things, (a) modify the calculation of Consolidated EBITDA and Consolidated Fixed Charges to exclude certain adjustments related to certain transactions (b) modify the Consolidated Leverage Ratio covenant and (c) add a covenant restricting the amount of capital expenditures we may make in fiscal years 2018 and 2019. As a result of the amendment to the Credit Facility, the maximum consolidated leverage ratio increased from 3.25 to 3.75 and will remain constant at this ratio through March 31, 2019, when it is set to decrease to 3.50 through September 30, 2019. The Consolidated Leverage Ratio will then decrease to 3.25 where it will remain until the end of the term of the Credit Facility. As of December 31, 2017 and 2016, $24.4 million and $18.0 million of letters of credit were outstanding, respectively. Total unused credit availability under the Credit Facility was $54.6 million and $62.0 million at December 31, 2017 and 2016, respectively. Revolving loans may be borrowed, repaid and reborrowed until September 3, 2020, at which time all amounts borrowed pursuant to the Credit Facility must be repaid. At the Company’s option, revolving loans and the term loans accrue interest at a per annum rate based on either the highest of (a) the federal funds rate plus 0.5%, (b) the Agent’s prime lending rate, and (c) one-month LIBOR plus 1.00%, plus a margin ranging from 1.0% to 2.0% depending on the Company’s consolidated leverage ratio (“Base Rate”), or a Eurocurrency Rate (as defined in the Credit Agreement) plus 2.0% to 3.0% depending on the Company’s consolidated leverage ratio. Interest on swing line loans is the Base Rate. Accrued interest on Base Rate loans is payable quarterly in arrears on the last day of each calendar quarter and at maturity. Interest on Eurocurrency Rate loans is payable on the last date of each applicable Interest Period (as defined in the agreement), but in no event less than once every three months and at maturity. The weighted average interest rate on outstanding borrowings was 4.08% and 3.26% at December 31, 2017 and 2016, respectively. In accordance with the Credit Facility terms, the Company entered into an interest rate swap on December 30, 2015 to hedge against interest rate exposure related to approximately one-third of the outstanding debt as of the date of the agreement indexed to LIBOR market rates. The fair value of the interest rate swap was a $0.3 million asset and a $0.2 million liability at December 31, 2017, and 2016, respectively, which is recorded in “Deferred charges and other assets” on the Consolidated Balance Sheets. The Company did not designate the interest rate swap as an effective hedge until the first quarter of 2016. The change in the fair value of the hedge prior to being designated as an effective hedge during the year ended December 31, 2016 of $0.5 million, was recorded in earnings in “Other income (expense), net” in the Consolidated Statements of Operations. From the date of designation, all changes to the fair value of the interest rate swap are recorded in other comprehensive income (loss) as long as the hedge is deemed effective. The Company has granted a security interest in substantially all of its assets to secure its obligations pursuant to the Credit Agreement. The Company’s obligations under the Credit Agreement are guaranteed by the Company’s U.S. subsidiaries and such guaranty obligations are secured by a security interest on substantially all of the assets of such subsidiaries, including certain real property. The Company’s obligations under the Credit Agreement may also be guaranteed by the Company’s material foreign subsidiaries to the extent no adverse tax consequences would result to the Company. As of December 31, 2017 and 2016, the Company was in compliance with all related financial and other restrictive covenants under the Credit Facility. Foreign Debt A subsidiary of the Company located in the Netherlands has a Euro denominated facilities agreement with ING Bank N.V. as the lender (“Aarding Facility”) with a total borrowing capacity of $15.5 million. The facilities agreement consists of a $8.3 million bank guarantee facility and a $7.2 million overdraft facility. The bank guarantee interest rate is the three months Euribor plus 265 basis points (2.65% as of December 31, 2017 and 2016) and the overdraft interest rate is three months Euribor plus 195 basis points (1.95% as of December 31, 2017 and 2016). All of the borrowers’ assets are pledged for this facility, and the borrowers’ solvency ratio must be at least 30% and net debt/last twelve months EBITDA less than 3.0. The subsidiary of the Company located in the Netherlands has a Euro denominated debenture facility used to facilitate issuances of letters of credit and bank guarantees of December 31, 2017. As of December 31, 2017, $3.9 million of the bank guarantees and $2.8 million of the overdraft facility are being used by the borrowers. As of December 31, 2016, $5.3 million of the bank guarantee and zero of the overdraft facility are being used by the borrowers. There is no stated expiration date on the facilities agreement. As of December 31, 2016 the borrowers were in compliance with all related financial and other restrictive covenants. As of December 31, 2017, the borrowers were not in compliance with certain financial covenants under the Aarding Facility. As such, in March 2018, the Company settled the outstanding amount of $2.8 million of the overdraft facility, which is classified as current portion of debt in the Consolidated Balance Sheets. The Company plans to exit this facility and consolidate it with the existing Credit Facility. A subsidiary of the Company located in China has a Chinese Yuan Renminbi denominated short term loan with Bank of America (“China Facility”) with amounts outstanding of zero and $1.3 million as of December 31, 2017 and 2016, respectively. The short term loan has a total borrowing capacity of $4.6 million and $4.3 million as of December 31, 2017 and 2016, respectively. The short term loan has an interest rate of 4.79%, and will expire on April 12, 2018 and will not be renewed. A subsidiary of the Company located in the U.K. has a debenture agreement used to facilitate issuances of letters of credit and bank guarantees of $8.0 million and $9.0 million at December 31, 2017 and 2016. This agreement is currently denominated in US Dollars. This facility was secured by a protective letter of credit issued by the Company to HSBC Bank at December 31, 2017. At December 31, 2017 and 2016, there was $7.0 million and $6.2 million, respectively, of outstanding stand-by letters of credit and bank guarantees under this debenture agreement. A subsidiary of the Company located in Germany has a Euro denominated debenture agreement used to facilitate issuances of letters of credit and bank guarantees of $0.2 million and $0.9 million at December 31, 2017 and 2016, respectively. This facility is secured by cash deposits of $0.2 million and $0.9 million at December 31, 2017 and 2016, respectively. There were $0.2 million and $0.9 million of outstanding stand-by letters of credit and bank guarantees under this debenture agreement as of December 31, 2017 and 2016, respectively. A subsidiary of the Company located in Singapore had bank guarantees of $1.0 million and $1.7 million at December 31, 2017 and December 31, 2016, respectively. These guarantees are secured with cash deposits of $0.1 million and $0.3 million as of December 31, 2017 and December 31, 2016, respectively, and a protective letter of credit issued by the Company to Citibank. As of December 31, 2017 and 2016, $3.9 million and $5.3 million of letters of credit were outstanding under the Netherlands and China facilities, respectively. Total unused credit availability under the Netherlands and China facilities was $13.5 million and $11.4 million at December 31, 2017 and 2016, respectively.

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- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -URI http://asc.fasb.org/topic&trid=2208564 + Details
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