XML 19 R9.htm IDEA: XBRL DOCUMENT

Long-Term Debt

3 Months Ended

Dec. 31, 2017

4. Long-Term Debt

Long-term debt consisted of the following (in thousands):

	December 31, 2017			September 30, 2017

Notes payable at 10-11%, mature August 2022 and December 2024	$	-		$	2,358
Note payable at 7%, matures December 2019		-			95
Notes payable at 5.5%, matures January 2023		1,136			1,157
Notes payable at 5.5%, matures January 2023 and January 2022		-			4,510
Note payable refinanced at 6.25%, matures July 2018		-			1,120
Note payable at 9.5%, matures August 2024		-			6,941
Notes payable at 9.5%, mature September 2024		-			6,423
Notes payable at 5-7%, mature from 2018 to 2028		-			1,679
7.45% note payable, matures January 2019		-			2,740
Non-interest-bearing debt to State of Texas, matures May 2022, interest imputed at 9.6%		5,365			5,613
Note payable at 6.5%, matures January 2020		-			4,484
Note payable at 6%, matures January 2019		-			504
Notes payable at 5.5%, matures May 2020		-			5,320
Note payable at 6%, matures May 2020		-			1,037
Note payable at 5.25%, matures December 2024		-			1,777
Note payable initially at 5.45%, matures July 2020 (amended to December 2027 with refinancing)		10,536			10,620
Note payable at the greater of 2% above prime or 5% (6.25% at September 30, 2017), matures October 2025		-			4,303
Note payable at 5%, matures January 2026		-			9,672
Note payable at 5.25%, matures March 2037		-			4,651
Note payable at 6.25%, matures February 2018		1,894			1,894
Note payable initially at 5.95%, matures August 2021 (amended to December 2027 with refinancing)		8,095			8,267
Note payable at 12%, matures October 2021		6,704			9,671
Note payable at 4.99%, matures April 2037		934			941
Notes payable at 12%, mature May 2020		5,440			5,440
Note payable at 5%, matures November 2017		3,025			5,000
Note payable at 8%, matures May 2029		15,090			15,291
Note payable at 5%, matures May 2038		4,456			3,441
Note payable initially at 5.75%, matures December 2027		57,904			-
Note payable at 5.95%, matures December 2032		7,098			-
Total debt		127,677			129,949
Less unamortized debt issuance costs		(1,685	)		(597	)
Less current portion		(14,048	)		(17,440	)

Total long-term debt	$	111,944		$	106,912

On December 14, 2017, the Company entered into a loan agreement (“New Loan”) with a bank for $81.2 million. The New Loan fully refinances 20 of the Company’s notes payable and partially pays down 1 note payable (collectively, “Repaid Notes”) with interest rates ranging from 5% to 12% covering 43 parcels of real properties the Company previously acquired (“Properties”). The New Loan consists of three promissory notes:

	(i)	The first note amounts to $62.5 million with a term of 10 years at a 5.75% fixed interest rate for the first five years, then repriced one time at the then current U.S. Treasury rate plus 3.5%, with a floor rate of 5.75%, and payable in monthly installments of $442,058, based upon a 20-year amortization period, with the balance payable at maturity;

	(ii)	The second note amounts to $10.6 million with a term of 10 years at a 5.45% fixed interest rate until July 2020, after which to be repriced at a fixed interest rate of 5.75% until the fifth anniversary of this note, and then to be repriced again at the then interest rate of the first note. This note is payable $78,098 monthly for principal and interest until July 2020, based upon a 20-year amortization period, after which the monthly payment for principal and interest is adjusted accordingly based on the repricing, with the balance payable at maturity; and

	(iii)	The third note amounts to $8.1 million with a term of 10 years at a 5.95% fixed interest rate until August 2021, after which to be repriced at 5.75% until the fifth anniversary of this note, and then to be repriced again at the then interest of the first note. This note is payable $100,062 monthly for principal and interest until August 2021, based upon a 20-year amortization period, after which the monthly payment for principal and interest is adjusted accordingly based on the repricing, with the balance payable at maturity.

In addition to the monthly principal and interest payments as provided above, the Company will pay monthly installments of principal of $250,000, applied to the first note, until such time as the loan-to-value ratio of the Properties, based upon reduced principal balance of the New Loan and the then current value of the Properties, is not greater than 65%. The New Loan has eliminated balloon payments of the Repaid Notes worth $2.9 million originally scheduled in fiscal 2018, $19.4 million originally scheduled in fiscal 2020 and $5.3 million originally scheduled in fiscal 2021.

In connection with the Repaid Notes, we wrote off $279,000 of unamortized debt issuance costs to interest expense. Prior to September 30, 2017, the Company paid a portion of debt issuance costs amounting to $612,500, which was included in other assets until the closing of the transaction. At closing, the Company paid an additional $764,000 in debt issuance costs, which together with the $612,500 prepayment will be amortized for the term of the loan using the effective interest rate method. We also paid prepayment penalties amounting to $543,000 on the Repaid Notes.

Included in the $62.5 million note detailed in (i) above, was $4.6 million that was escrowed and due to the bank lender of one of the Repaid Notes. The amount will be released from escrow when the construction, for which the original note was borrowed, is completed.

In December 2017, the Company borrowed $7.1 million from a lender to purchase an aircraft at 5.95% interest. The transaction was partly funded by trading in an aircraft that the Company owned with a carrying value of $3.4 million with an assumption of the old aircraft’s note payable liability of $2.0 million. The note is payable in 15 years with monthly payments of $59,869, which includes interest.

As of December 31, 2017, the Company is in compliance with all its debt covenants.

Future maturities of long-term debt consist of the following (in thousands) as of December 31, 2017:

	Regular		Balloon		Total
12-Month Period Ending	Amortization		Payments		Payments
December 31, 2018	$	9,129	$	4,919	$	14,048
December 31, 2019		9,289		-		9,289
December 31, 2020		7,381		5,440		12,821
December 31, 2021		7,707		-		7,707
December 31, 2022		6,587		3,779		10,366
Thereafter		16,928		56,518		73,446
	$	57,021	$	70,656	$	127,677

On February 15, 2018, the Company borrowed $3.0 million from a bank for the purchase of land at a cost of $4.0 million with the difference paid by the Company in cash. The bank note bears interest at 5.25% adjusted after 36 months to prime plus 1% with a floor of 5.2% and matures on February 15, 2038. The bank note is payable interest-only during the first 18 months, after which monthly payments of principal and interest will be made based on a 20-year amortization with the remaining balance to be paid at maturity.

On February 20, 2018, the Company refinanced a bank note with a balance of $1.9 million, bearing interest of 2% over prime with a 5.5% floor, with the same bank for a construction loan with maximum availability of $4.7 million. The construction loan agreement bears an interest rate of prime plus 0.5% with a floor of 5.0% and matures on August 20, 2029. During the first 18 months of the construction loan, the Company will make monthly interest-only payments, and after such, monthly payments of principal and interest will be made based on a 20-year amortization with the remaining balance to be paid at maturity.