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Note 9 - Debt
 12 Months Ended
Dec. 31, 2013
Debt Disclosure [Abstract]  
Debt Disclosure [Text Block]

9.    Debt:


The Company’s debt is comprised of the following components:


   

As of December 31,

 

(in thousands)

 

2013

   

2012

 

Asset-based revolving credit facility expiring June 30, 2016

  $ 146,075     $ 177,575  

Term loan due June 30, 2016

    48,854       57,604  

Industrial revenue bonds due April 1, 2018

    4,340       5,125  

Capital lease

    -       1,407  

Total debt

    199,269       241,711  

Less current amount

    (13,090 )     (15,282 )

Total long-term debt

  $ 186,179     $ 226,429  

In March 2012, the Company amended its existing asset-based credit facility (ABL Credit Facility). The amendment provided, among other things: (i) a reduction in the applicable margin for loans under the Company’s Loan and Security Agreement; (ii) additional revolving commitments to the borrowers in an aggregate principal amount of $50 million, which additional revolving commitments do not impact the borrowers’ incremental facilities; and (iii) permits certain transactions among the borrowers and Metales de Olympic, S. de R.L. de C.V., an indirect subsidiary of the Company. The amended ABL Credit Facility consisted of a revolving credit line of $315 million and a $64 million term loan, with monthly principal payments. At December 31, 2013, the term loan balance was $49 million. Revolver borrowings are limited to the lesser of a borrowing base, comprised of eligible receivables and inventories, or $315 million in the aggregate. The ABL Credit Facility matures on June 30, 2016.


The ABL Credit Facility requires the Company to comply with various covenants, the most significant of which include: (i) until maturity of the ABL Credit Facility, if any commitments or obligations are outstanding and the Company’s availability is less than 12.5% of the aggregate amount of revolver commitments ($39.4 million at December 31, 2013), then the Company must maintain a ratio of EBITDA minus certain capital expenditures and cash taxes paid to fixed charges of at least 1.10 to 1.00 for the most recent twelve fiscal month period; (ii) limitations on dividend payments; (iii) restrictions on additional indebtedness; and (iv) limitations on investments and joint ventures. Effective with the March 2012 amendment, the Company has the option to borrow under its revolver based on the agent’s base rate plus a premium ranging from 0.00% to 0.50% or the London Interbank Offered Rate (LIBOR) plus a premium ranging from 1.50% to 2.00%. The interest rate under the term loan is based on the agent’s base rate plus a premium ranging from 0.25% to 0.75% or LIBOR plus a premium ranging from 1.75% to 2.25%. The premiums for the revolver and term loan are based on revolver utilization.


As of December 31, 2013, the Company was in compliance with its covenants and had approximately $99.2 million of availability under the ABL Credit Facility.


As of December 31, 2013, $3.4 million of bank financing fees were included in “Prepaid expenses and other” and “Other long-term assets” on the accompanying Consolidated Balance Sheets. The financing fees are being amortized over the remaining term of the ABL Credit Facility. The amortization of $1.3 million, $1.3 million and $684 thousand for 2013, 2012 and 2011 respectively, is included in “Interest and other expense on debt” on the accompanying Consolidated Statements of Comprehensive Income.


In June 2012, the Company entered into a forward starting fixed rate interest rate hedge that commenced June 2013, in order to eliminate the variability of cash interest payments on $53.2 million of the outstanding LIBOR-based borrowings under the ABL Credit Facility. The hedge matures on June 1, 2016 and the notional amount is reduced monthly by the principal payments on the term loan. The balance as of December 31, 2013 was $48.9 million. The interest rate hedge fixed the rate at 1.21% plus a premium ranging from 1.75% to 2.25%. Although the Company is exposed to credit loss in the event of nonperformance by the other parties to the interest rate hedge agreement, the Company anticipates performance by the counterparties.


As part of the CTI acquisition, the Company assumed approximately $5.9 million of IRB indebtedness issued through the Stanly County, North Carolina Industrial Revenue and Pollution Control Authority. The bond matures in April 2018, with the option to provide principal payments annually on April 1st. As of December 31, 2013 $4.3 million was outstanding on the IRB. The IRB is remarketed annually and is included in “Current portion of long-term debt” on the accompanying Consolidated Balance Sheets. Interest is payable monthly, with a variable rate that resets weekly. As security for payment of the bonds, the Company obtained a direct pay letter of credit issued by JPMorgan Chase Bank, N.A. The letter of credit reduces annually by the optional principal repayment amount. The interest rate at December 31, 2013 was 0.15% for the IRB debt.


The Company entered into an interest rate swap agreement to reduce the impact of changes in interest rates on the IRB. At December 31, 2013, the effect of the swap agreement on the bond was to fix the rate at 3.46%. The swap agreement matures April 2018, but the notional amount is reduced annually by the amount of the optional principal payments on the bond. Although the Company is exposed to credit loss in the event of nonperformance by the other parties to the interest rate swap agreement, the Company anticipates performance by the counterparties.


In April 2013, the Company purchased a facility in Streetsboro, Ohio for $1.4 million that was previously financed under a capital lease agreement. The capital lease obligation of $1.4 million was included in “Current portion of long-term debt” on the accompanying Consolidated Balance Sheets as of December 31, 2012.


Scheduled Debt Maturities, Interest, Debt Carrying Values


The Company’s principal payments over the next five years and thereafter are detailed in the table below:


(in thousands)

 

2014

   

2015

   

2016

   

2017

   

2018

   

Thereafter

   

Total

 

Revolver

  $ -     $ -     $ 146,075     $ -     $ -     $ -      $ 146,075  

Term loan

    8,750       8,750       31,354       -       -       -        48,854  

Industrial revenue bond

    810       840       865       895       930       -        4,340  

Total principal payments

  $ 9,560     $ 9,590     $ 178,294     $ 895     $ 930     $ -     $ 199,269  

The ABL Credit Facility includes a $70 million term loan that is collateralized by the Company’s real estate and equipment. The term loan matures on June 30, 2016. Under the ABL Credit Facility the Company is required to make monthly term loan payments of $729 thousand. The interest rate under the term loan is based on the agent’s base rate plus a premium ranging from 0.25% to 0.75% or LIBOR plus a premium ranging from 1.75% to 2.25%.


The overall effective interest rate for all debt, exclusive of deferred financing fees and deferred commitment fees, amounted to 2.3%, 2.7% and 3.1% in 2013, 2012 and 2011, respectively. Interest paid totaled $5.5 million, $7.3 million and $5.1 million for the years ended December 31, 2013, 2012 and 2011, respectively. Average total debt outstanding was $219.2 million, $254.2 million and $165.0 million in 2013, 2012 and 2011, respectively.