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Note 4 - Bank Debt | 3 Months Ended
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Mar. 31, 2023
Notes to Financial Statements |
Debt Disclosure [Text Block] |
(4) | BANK DEBT
On March 13, 2023, we executed an amendment to our credit agreement with PNC Bank, National Association (in its capacity as administrative agent, "PNC"), administrative agent for our lenders under our credit agreement, which was accounted for as a debt modification. The primary purpose of the amendment was to convert $35 million of the outstanding balance on the revolver into a new term loan with a maturity of March 31, 2024, and extend the maturity date of the revolver to May 31, 2024. The amendment reduced the total capacity under the revolver to $85 million from $120 million and waived the maximum annual capital expenditure covenant for 2022, and increased the covenant for 2023 to $75 million. Bank debt was reduced by $10.0 million during the three months ended March 31, 2023. Bank debt is comprised of term debt ($35.0 million as of March 31, 2023) and an $85 million revolver ($40.2 million borrowed as of March 31, 2023). The term debt requires payments of $10 million each quarter commencing in June 2023, with final payment of $5.0 million by March 31, 2024. Our debt is recorded at amortized cost, which approximates fair value due to the variable interest rates in the agreement, and is collateralized primarily by our assets. Liquidity As of March 31, 2023, we had additional borrowing capacity of $33.6 million and total liquidity of $36.0 million. Our additional borrowing capacity is net of $11.2 million in outstanding letters of credit as of March 31, 2023, that were required to maintain surety bonds. Liquidity consists of our additional borrowing capacity and cash and cash equivalents. We entered into new contracts during the three months ended June 30, 2022, with significantly higher prices, which began shipping during the three months ended September 30, 2022. These contracts substantially increased our cash flow for the remainder of 2022 and 2023. Fees Unamortized bank fees and other costs incurred in connection with the initial facility and subsequent amendments totaled $2.5 million as of December 31, 2022. Additional costs incurred with the March 13, 2023 amendments totaled $1.6 million. These costs were deferred and are being amortized over the term of the loan. Unamortized costs as of March 31, 2023, and December 31, 2022, were $2.9 million and $2.5 million, respectively. Bank debt, less debt issuance costs, is presented below (in thousands):
|  | March 31, |  |  | December 31, |
|  | 2023 |  |  | 2022 |
Current bank debt |  | $ | 35,000 |  |  | $ | 35,500 |
Less unamortized debt issuance cost |  |  | (2,728 | ) |  |  | (2,469 | )
Net current portion |  | $ | 32,272 |  |  | $ | 33,031 |
Long-term bank debt |  | $ | 40,200 |  |  | $ | 49,713 |
Less unamortized debt issuance cost |  |  | (129 | ) |  |  | — |
Net long-term portion |  | $ | 40,071 |  |  | $ | 49,713 |
Total bank debt |  | $ | 75,200 |  |  | $ | 85,213 |
Less total unamortized debt issuance cost |  |  | (2,857 | ) |  |  | (2,469 | )
Net bank debt |  | $ | 72,343 |  |  | $ | 82,744 |
Covenants The credit facility includes a Maximum Leverage Ratio (consolidated funded debt/trailing twelve months adjusted EBITDA), calculated as of the end of each fiscal quarter for the trailing twelve months, not to exceed the amounts below:
Fiscal Periods Ending |  | Ratio |
March 31, 2023, and each fiscal quarter thereafter |  | 2.25 to 1.00 |
As of March 31, 2023, our Leverage Ratio of 1.20 was in compliance with the 2.25 covenant defined in the current amendment. Beginning December 31, 2022, the credit facility requires a Minimum Debt Service Coverage Ratio (consolidated adjusted EBITDA/annual debt service) calculated as of the end of each fiscal quarter for the trailing twelve months of 1.25 to 1.00 through the maturity of the credit facility. As of March 31, 2023, our Debt Service Coverage Ratio of 2.50 was in compliance with the requirements of the credit agreement. Interest Rate The interest rate on the facility ranges from SOFR plus 4.00% to SOFR plus 5.00%, depending on our Leverage Ratio. At March 31, 2023, we are paying SOFR plus 4.25% on the outstanding bank debt.

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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/disclosureRef -Topic 470 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1B -Subparagraph (h) -Publisher FASB -URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 235 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(c)) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1 Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 470 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//470/tableOfContent Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1B -Publisher FASB -URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1B -Subparagraph (g) -Publisher FASB -URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1B -Subparagraph (i) -Publisher FASB -URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1C -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org//1943274/2147481139/470-20-50-1C Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1C -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147481139/470-20-50-1C Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1C -Subparagraph (c) -Publisher FASB -URI https://asc.fasb.org//1943274/2147481139/470-20-50-1C Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1E -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147481139/470-20-50-1E Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1I -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org//1943274/2147481139/470-20-50-1I Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1I -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147481139/470-20-50-1I Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1I -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org//1943274/2147481139/470-20-50-1I + Details
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