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Long Term Debt | 3 Months Ended
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Mar. 31, 2021
Debt Disclosure [Abstract] |
Long Term Debt |
8. | Long Term Debt
Long-term debt consists of the following:
(Amounts in Thousands) |  | March 31, 2021 |  |  | December 31, 2020 |
Revolving Credit facility dated May 8, 2020, borrowings based upon eligible accounts receivable, subject to monthly borrowing base calculation, balance due on May 15, 2024. Effective interest rate for the first quarter of 2021 was 5.3%. (1) |  | $ | — |  |  | $ | — |
Term Loan dated May 8, 2020, payable in equal monthly installments of principal, balance due on May 15, 2024. Effective interest rate for the first quarter of 2021 was 4.5%. (1) |  |  | 1,290 | (2) |  |  | 1,388 | (2)
Promissory Note dated April 14, 2020, balance subject to loan forgiveness. Interest accrues at annual rate of 1.0%. (3) |  |  | 5,318 | (4) |  |  | 5,318 | (4)
Notes Payable to 2023 and 2025, annual interest rate of 5.6% and 9.1%. |  |  | 49 |  |  |  | 23 |
Total debt |  |  | 6,657 |  |  |  | 6,729 |
Less current portion of long-term debt |  |  | 5,196 |  |  |  | 3,595 |
Long-term debt |  | $ | 1,461 |  |  | $ | 3,134 |
(1) Our revolving credit facility is collateralized by our accounts receivable and our term loan is collateralized by our property, plant, and equipment. (2) Net of debt issuance costs of ($97,000) and ($105,000) at March 31, 2021 and December 31, 2020, respectively. (3) Uncollateralized note. (4) Entered into with the Company’s credit facility lender under the PPP under the CARES Act (see “Paycheck Protection Program (“PPP”) Loan” below for further information on this loan and its terms). Revolving Credit and Term Loan Agreement The Company entered into a Second Amended and Restated Revolving Credit, Term Loan and Security Agreement, dated May 8, 2020 (“Loan Agreement”), with PNC National Association (“PNC”), acting as agent and lender. The Loan Agreement provides the Company with the following credit facility with a maturity date of March 15, 2024: (a) up to $18,000,000 revolving credit (“revolving credit”) and (b) a term loan (“term loan”) of approximately $1,742,000, requiring monthly installments of $35,547. The maximum that the Company can borrow under the revolving credit is based on a percentage of eligible receivables (as defined) at any one time reduced by outstanding standby letters of credit and borrowing reductions that our lender may impose from time to time. Payment of annual rate of interest due on the revolving credit is at prime (3.25% at March 31, 2021) plus 2% or London InterBank Offer Rate (“LIBOR”) plus 3.00% and the term loan at prime plus 2.50% or LIBOR plus 3.50%. Under the LIBOR option of interest payment, a LIBOR floor of 0.75% applies in the event that LIBOR falls below 0.75% at any point in time. Pursuant to the Loan Agreement, the Company may terminate the Loan Agreement upon 90 days’ prior written notice upon payment in full of our obligations under the Loan Agreement. The Company has agreed to pay PNC 1.0% of the total financing in the event we pay off our obligations on or before May 7, 2021 and 0.5% of the total financing if we pay off our obligations after May 7, 2021 but prior to or on May 7, 2022. No early termination fee will apply if we pay off our obligations under the New Loan Agreement after May 7, 2022. At March 31, 2021, the borrowing availability under our revolving credit was approximately $10,280,000, based on our eligible receivables and includes a reduction in borrowing availability of approximately $3,026,000 from outstanding standby letters of credit. The Company’s credit facility under its Loan Agreement with PNC contains certain financial covenants, along with customary representations and warranties. A breach of any of these financial covenants, unless waived by PNC, could result in a default under our credit facility allowing our lender to immediately require the repayment of all outstanding debt under our credit facility and terminate all commitments to extend further credit. The Company met its financial covenant requirements in the first quarter of 2021. The Company’s fixed charge coverage ratio (“FCCR”) calculation in the first quarter of 2021 included the add-back of approximately $5,318,000 in eligible expenses that were incurred and covered by the PPP Loan that the Company received in 2020. This add-back was permitted by an amendment to our Loan Agreement that the Company entered into with our lender in May 2021 and was applied retroactively to the second and third quarters of 2020 pursuant to the amendment (see “Note 16 – Subsequent Events – Credit Facility” for a discussion of this amendment). Paycheck Protection Program (“PPP”) Loan On April 14, 2020, the Company entered into a promissory note under the PPP with PNC, our credit facility lender, which has a balance of approximately $5,318,000 (the “PPP Loan”) at March 31, 2021. The PPP was established under the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) and is administered by the Small Business Administration (“SBA”). The CARES Act was subsequently amended by the Paycheck Protection Program Flexibility Act of 2020 (“Flexibility Act”). The note evidencing the PPP Loan contains events of default relating to, among other things, payment defaults, breach of representations and warranties, and provisions of the promissory note. Under the terms of the Flexibility Act, the Company can apply for and be granted forgiveness for all or a portion of the PPP Loan. Such forgiveness will be determined, subject to limitations, based on the use of loan proceeds by the Company for eligible payroll costs, mortgage interest, rent and utility costs and the maintenance of employee and compensation levels for the covered period (which is defined as a 24-week period, beginning April 14, 2020, the date in which proceeds from the PPP Loan was disbursed to the Company by PNC). On October 5, 2020, the Company applied for forgiveness on repayment of the loan balance as permitted under the program, which is subject to the review and approval of our lender and the SBA. If all or a portion of the PPP Loan is not forgiven, all or the remaining portion of the loan will be for a term of two years but can be prepaid at any time prior to maturity without any prepayment penalties. The annual interest rate on the PPP Loan is 1.0% and no payments of principal or interest are due until SBA remits the loan forgiveness amount to our lender. While the Company’s PPP Loan currently has a two year maturity, the Flexibility Act permits the Company to request a five year maturity with our lender. At March 31, 2021, the Company has not received a determination on potential forgiveness on any portion of the PPP Loan balance; therefore, the Company has classified approximately $4,786,000 of the PPP Loan balance as “Current portion of long-term debt,” on its Consolidated Balance Sheets, which was based on payment of the PPP Loan starting in July 2021 (10 months from end of our covered period) in accordance with the terms of our PPP Loan agreement.

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