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Debt

12 Months Ended

Dec. 31, 2020

Debt [Abstract]

Debt

5. Debt

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​	​	​		​	​		​	Interest rates at	​	​
Year ended December 31		2020			2019			December 31, 2020		Maturity
Revolving Credit Facility	​	​	​	​	​	​	​	​	​	​
Credit Facility	​	$	136,000	​	$	126,000	​	2.85%	​	June 2024
​	​	​	​	​	​	​	​	​	​	​
Debt	​	​	​	​	​	​	​	​	​	​
Stoneridge Brazil short-term obligations	​	​	1,561	​	​	-	​	5.64% - 8.80%	​	June 2021 - November 2021
Stoneridge Brazil long-term notes	​	​	-	​	​	972	​	​	​	​
Sweden short-term credit line	​	​	1,591	​	​	-	​	2.60%	​	January 2021
Suzhou short-term credit line	​	​	4,521	​	​	2,154	​	3.85% - 5.00%	​	September 2021
Total debt	​	​	7,673	​	​	3,126	​	​	​	​
Less: current portion	​	​	(7,673)	​	​	(2,672)	​	​	​	​
Total long-term debt, net	​	$	-	​	$	454	​	​	​	​

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Revolving Credit Facility

On June 5, 2019, the Company entered into the Fourth Amended and Restated Credit Agreement (the “2019 Credit Facility”). The 2019 Credit Facility provides for a $400,000 senior secured revolving credit facility and it replaced and superseded the Third Amended and Restated Credit Agreement that provided for a $300,000 revolving credit facility. The 2019 Credit Facility has an accordion feature which allows the Company to increase the availability by up to $150,000 upon the satisfaction of certain conditions and includes a letter of credit subfacility, swing line subfacility and multicurrency subfacility. The 2019 Credit Facility has a termination date of June 5, 2024. In 2019, the Company capitalized $1,366 of deferred financing costs as a result of entering into the 2019 Credit Facility. In connection with the 2019 Credit Facility, the Company wrote off a portion of the previously recorded deferred financing costs of $275 in interest expense, net during the year ended December 31, 2019. Borrowings under the 2019 Credit Facility bear interest at either the Base Rate or the LIBOR rate, at the Company’s option, plus the applicable margin as set forth in the 2019 Credit Facility. The 2019 Credit Facility contains certain financial covenants that require the Company to maintain less than a maximum leverage ratio and more than a minimum interest coverage ratio.

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The 2019 Credit Facility contains customary affirmative covenants and representations. The 2019 Credit Facility also contains customary negative covenants, which, among other things, are subject to certain exceptions, including restrictions on (i) indebtedness, (ii) liens, (iii) liquidations, mergers, consolidations and acquisitions, (iv) disposition of assets or subsidiaries, (v) affiliate transactions, (vi) creation or ownership of certain subsidiaries, partnerships and joint ventures, (vii) continuation of or change in business, (viii) restricted payments, (ix) prepayment of subordinated and junior lien indebtedness, (x) restrictions in agreements on dividends, intercompany loans and granting liens on the collateral, (xi) loans and investments, (xii) sale and leaseback transactions, (xiii) changes in organizational documents and fiscal year and (xiv) transactions with respect to bonding subsidiaries. The 2019 Credit Facility contains customary events of default, subject to customary thresholds and exceptions, including, among other things, (i) non-payment of principal and non-payment of interest and fees, (ii) a material inaccuracy of a representation or warranty at the time made, (iii) a failure to comply with any covenant, subject to customary grace periods in the case of certain affirmative covenants, (iv) cross default of other debt, final judgments and other adverse orders in excess of $30,000, (v) any loan document shall cease to be a legal, valid and binding agreement, (vi) certain uninsured losses or proceedings against assets with a value in excess of $30,000, (vii) ERISA events, (viii) a change of control, or (ix) bankruptcy or insolvency proceedings.

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Due to the expected impact of the COVID-19 pandemic on the Company’s end-markets and the resulting expected financial impacts to the Company, on June 26, 2020, the Company entered into a Waiver and Amendment No. 1 to the Fourth Amended and Restated Credit Agreement (“Amendment No. 1”). Amendment No. 1 provides for certain covenant relief and restrictions during the “Covenant Relief Period” (the period ending on the date that the Company delivers a compliance certificate for the quarter ending June 30, 2021 in form and substance satisfactory to the administrative agent). During the Covenant Relief Period:

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● the maximum net leverage ratio is suspended;

● the calculation of the minimum interest coverage ratio will exclude second quarter 2020 financial results effective for the quarters ended September 30, 2020 through March 31, 2021;

● the minimum interest coverage ratio of 3.50 is reduced to 2.75 and 3.25 for the quarters ended December 31, 2020 and March 31, 2021, respectively;

● the Company’s liquidity may not be less than $150,000;

● the Company’s aggregate amount of cash and cash equivalents cannot exceed $130,000;

● there are certain restrictions on Restricted Payments (as defined); and

● a Permitted Acquisition (as defined) may be not consummated unless otherwise approved in writing by the required lenders.

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Amendment No. 1 changes the leverage based LIBOR pricing grid through the maturity date and also provides for a LIBOR floor of 50 basis points on outstanding borrowings excluding any Specified Hedge Borrowings (as defined) which remain subject to a LIBOR floor of 0 basis points. As of December 31, 2020, Specified Hedge Borrowings were $50,000.

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The Company capitalized an additional $1,079 of deferred financing costs as a result of entering into Amendment No. 1.

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Borrowings outstanding on the 2019 Credit Facility, were $136,000 and $126,000 at December 31, 2020 and 2019, respectively.

The Company was in compliance with all credit facility covenants at December 31, 2020 and 2019.

The Company also had outstanding letters of credit of $1,720 and $1,768 at December 31, 2020 and 2019, respectively.

Debt

Stoneridge Brazil maintains short-term notes used for working capital purposes which have fixed or variable interest rates. The weighted-average interest rate of Stoneridge Brazil short-term debt at December 31, 2020 was 6.79%. Depending on the specific note, interest is payable either monthly or annually. Principal repayments of $1,561 on Stoneridge Brazil debt at December 31, 2020 are due in 2021.

In December 2019, Stoneridge Brazil established an overdraft credit line which allowed overdrafts on Stoneridge Brazil’s bank account up to a maximum level of R$5,000, or $1,244, at December 31, 2019. There was no balance outstanding on the overdraft credit line as of December 31, 2019. During the year ended December 31, 2020, the subsidiary borrowed and repaid R$7,150, or $1,306, prior to terminating the overdraft credit line.

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The Company’s wholly-owned subsidiary located in Sweden, has an overdraft credit line which allows overdrafts on the subsidiary’s bank account up to a daily maximum level of 20,000 Swedish krona, or $2,435 and $2,136 at December 31, 2020 and 2019, respectively. At December 31, 2020 there was 13,072 Swedish krona, or $1,591, outstanding on this overdraft credit line. At December 31, 2019, there was no balance outstanding on this overdraft credit line. During the year ended December 31, 2020, the subsidiary borrowed 312,921 Swedish krona, or $38,092, and repaid 299,849 Swedish krona, or $36,501.

The Company’s wholly-owned subsidiary located in Suzhou, China, has two credit lines (the “Suzhou credit line”) which allow up to a maximum borrowing level of 50,000 Chinese yuan, or $7,663 at December 31, 2020, and 40,000 Chinese yuan, or $5,746 at December 31, 2019. At December 31, 2020 and 2019 there was $4,521 and $2,154, respectively, in borrowings outstanding on the Suzhou credit line with weighted-average interest rates of 4.32% and 4.80%, respectively. The Suzhou credit line is included on the consolidated balance sheet within current portion of debt. In addition, the Suzhou subsidiary has a bank acceptance draft line of credit which facilitates the extension of trade payable payment terms by 180 days. This bank acceptance draft line of credit allows up to a maximum borrowing level of 15,000 Chinese yuan, or $2,299 and $2,154, at December 31, 2020 and 2019, respectively. There was $414 and $150 utilized on the Suzhou bank acceptance draft line of credit at December 31, 2020 and 2019, respectively.

At December 31, 2020, the future maturities of the Credit Facility and debt were as follows:

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​	​	​	​
Year ended December 31		​	​
2021	​	$	7,673
2022	​	​	-
2023	​	​	-
2024	​	​	136,000
2025	​	​	-
Total	​	$	143,673

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- References

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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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