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Note 9 - Debt

12 Months Ended

Dec. 31, 2020

Notes to Financial Statements

Debt Disclosure [Text Block]

9. Debt:

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

		As of December 31,
(in thousands)		2020				2019
Asset-based revolving credit facility due December 8, 2022		$	160,609			$	192,925
Total debt			160,609				192,925
Less current amount			-				-
Total long-term debt		$	160,609			$	192,925

On December 14, 2020, the Company amended its Third Amended and Restated Loan and Security Agreement and entered into its existing Joinder and Third Amendment to Third Amended and Restated Loan and Security Agreement (the ABL Credit Facility). The amendment includes the assets acquired from Action Stainless on December 14, 2020. The Company’s the ABL Credit Facility is collateralized by the Company’s accounts receivable, inventory and personal property. The ABL Credit Facility consists of (i) a revolving credit facility of $445 million, including a $20 million sub-limit for letters of credit and (ii) a first in, last out revolving credit facility of up to $30 million. Under the terms of the ABL Credit Facility, the Company may request additional commitments in the aggregate principal amount of up to $200 million to the extent that existing or new lenders agree to provide such additional commitments. Revolver borrowings are limited to the lesser of a borrowing base, comprised of eligible receivables and inventories, or $475 million in the aggregate. The ABL Credit Facility matures on December 8, 2022.

The ABL Credit Facility contains customary representations and warranties and certain covenants that limit the ability of the Company to, among other things: (i) incur or guarantee additional indebtedness; (ii) pay distributions on, redeem or repurchase capital stock or redeem or repurchase subordinated debt; (iii) make investments; (iv) sell assets; (v) enter into agreements that restrict distributions or other payments from restricted subsidiaries to the Company; (vi) incur liens securing indebtedness; (vii) consolidate, merge or transfer all or substantially all of the Company’s assets; and (viii) engage in transactions with affiliates. In addition, the ABL Credit Facility contains a financial covenant, which requires (i) if any commitments or obligations are outstanding and the Company’s availability is less than the greater of $30 million or 10.0% of the aggregate amount of revolver commitments ($47.5 million at December 31, 2020) or 10.0% of the aggregate borrowing base ($28.5 million at December 31, 2020) then the Company must maintain a ratio of Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA) minus certain capital expenditures and cash taxes paid to fixed charges of at least 1.00 to 1.00 for the most recent twelve fiscal month period.

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 0.25% or the London Interbank Offered Rate (LIBOR) plus a premium ranging from 1.25% to 2.75%.

As of December 31, 2020, the Company was in compliance with its covenants and had approximately $120.7 million of availability under the ABL Credit Facility.

As of December 31, 2020, and December 31, 2019, $0.9 million and $1.3 million, respectively, 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 five-year term of the ABL Credit Facility and are included in “Interest and other expense on debt” on the accompanying Consolidated Statements of Comprehensive Income (Loss).

As part of the CTI acquisition in July 2011, the Company assumed approximately $5.9 million of Industrial Revenue Bond (IRB) indebtedness. On March 1, 2018, the Company made the final $0.9 million payment on the IRB and the letter of credit and fixed interest rate swap associated with the IRB were terminated.

Scheduled Debt Maturities, Interest, Debt Carrying Values

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

(in thousands)		2021				2022				2023				2024				2025				Total
ABL Credit Facility		$	-			$	160,609			$	-			$	-			$	-			$	160,609
Total principal payments		$	-			$	160,609			$	-			$	-			$	-			$	160,609

The overall effective interest rate for all debt, exclusive of deferred financing fees and deferred commitment fees, amounted to 3.25%, 4.0% and 3.7% in 2020, 2019 and 2018, respectively. Interest paid totaled $7.0 million, $11.0 million and $10.2 million for the years ended December 31, 2020, 2019 and 2018, respectively. Average total debt outstanding was $188.4 million, $257.6 million and $275.3 million in 2020, 2019 and 2018, 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://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-URI http://asc.fasb.org/topic&trid=2208564

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- References

No definition available.

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