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Debt and Leases | 12 Months Ended
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Dec. 31, 2016
Debt Disclosure [Abstract] |
Debt and Leases | Debt and Leases Long-term debt consists of the following at:
| December 31, 2016 |  | December 31, 2015
Capex loan payable to a bank, interest at a variable rate (2.04% at December 31, 2015) with monthly payments of interest and principal over a seven-year period through May 2016. | $ | — |  |  | $ | 714,000 |
Term loan payable to a bank, interest at a variable rate (2.55% and 2.24% at December 31, 2016 and 2015, respectively) with monthly payments of interest and principal through March 2020. | 9,750,000 |  |  | 12,750,000 |
Revolving Line of Credit | — |  |  | — |
Total | 9,750,000 |  |  | 13,464,000 |
Less current portion | (3,000,000 | ) |  | (3,714,000 | )
Long-term debt | $ | 6,750,000 |  |  | $ | 9,750,000 |
Credit Agreement On December 9, 2008, the Company and its wholly owned subsidiary, Corecomposites de Mexico, S. de R.L. de C.V., entered into a credit agreement, as amended from time to time (the "Credit Agreement"), with a lender to provide various financing facilities. Under this Credit Agreement, as amended most recently with the eleventh amendment on June 21, 2016, the Company received certain loans, subject to the terms and conditions stated in the agreement, which included (1) a $12,000,000 Capex loan; (2) an $8,000,000 Mexican loan; (3) an $18,000,000 variable rate revolving line of credit; (4) a term loan in an original amount of $15,500,000; and (5) a Letter of Credit Commitment of up to $250,000, of which $155,000 has been issued. The Credit Agreement is secured by a guarantee of each U.S. subsidiary of the Company, and by a lien on substantially all of the present and future assets of the Company and its U.S. subsidiaries, except that only 65% of the stock issued by Corecomposites de Mexico, S. de R.L. de C.V. has been pledged. Capex Loan The $12,000,000 Capex loan was a construction draw loan that converted to a seven-year term loan with fixed monthly principal payments. Borrowings made pursuant to this loan bear interest, payable monthly at 30 day LIBOR plus 160 basis points and was paid in full May 2016. Term Loan The $15,500,000 Term Loan was used to finance the acquisition of CPI. This commitment has fixed monthly principal payments payable over a five-year period. Borrowings made pursuant to this loan bear interest, payable monthly at 30 day LIBOR plus 180 basis points. Mexican Loan The $8,000,000 Mexican loan was also a construction draw loan to finance the production facility in Matamoros, Mexico that was converted to a five-year term loan with annual payments commencing January 2010. This commitment bore interest at LIBOR plus 160 basis points and was paid in full in January 2014. Revolving Line of Credit At December 31, 2016, the Company had available an $18,000,000 variable rate revolving line of credit scheduled to mature on May 31, 2018. The revolving line of credit bears interest at daily LIBOR plus 160 basis points and is collateralized by all of the present and future assets of the Company and its U.S. subsidiaries (except that only 65% of the stock issued by Corecomposites de Mexico, S. de C.V. has been pledged). Annual maturities of long-term debt are as follows:
2017 | $ | 3,000,000 |
2018 | 3,000,000 |
2019 | 3,000,000 |
2020 | 750,000 |
Thereafter | — |
Total | $ | 9,750,000 |
Interest Rate Swap On December 18, 2008, the Company entered into an interest rate swap agreement that became effective May 1, 2009 and continued through May 2016, which was designated as a cash flow hedge of the $12,000,000 Capex loan. Under this agreement, the Company paid a fixed rate of 2.295% to the counterparty and received 30 day LIBOR (0.44% at December 31, 2015). Effective March 31, 2009, the interest terms in the Company’s Credit Agreement related to the $12,000,000 Capex loan were amended. The Company then determined this interest rate swap was no longer highly effective. As a result, the Company discontinued the use of hedge accounting effective March 31, 2009 related to this swap, and began recording mark-to-market adjustments within interest expense in the Company’s Consolidated Statements of Income. The pre-tax loss previously recognized in Accumulated Other Comprehensive Income (Loss), totaling $146,000 as of March 31, 2009, was being amortized as an increase to interest expense of $2,000 per month, or $1,000 net of tax, over the remaining term of the interest rate swap agreement. The fair value of the swap as of December 31, 2016 and December 31, 2015 was a liability of $0 and $2,000, respectively. The Company recorded interest income of $2,000, $35,000 and $66,000 for mark-to-market adjustments of fair value related to this swap for the years ended December 31, 2016, 2015 and 2014, respectively. The notional amount of the swap at December 31, 2016 and December 31, 2015 was $0 and $714,000, respectively. For the years ended December 31, 2016, 2015 and 2014, interest expense includes expense of $2,000, $32,000 and $70,000, respectively, for settlements related to the Company’s swaps. Bank Covenants The Company is required to meet certain financial covenants included in the Credit Agreement with respect to leverage ratios, fixed charge ratios, and capital expenditures, as well as other customary affirmative and negative covenants. As of December 31, 2016, the Company was in compliance with its financial covenants associated with the loans made under the Credit Agreement as described above. Leases The Company has entered into an operating lease agreement through July 2019 for the manufacturing facility located in Batavia, Ohio. Additionally, the Company leases a warehouse and distribution center in Brownsville, Texas under a 5-year operating lease agreement expiring in October 2017. Total rental expense was $808,000, $696,000 and $767,000 for 2016, 2015 and 2014, respectively. Included in rental expense are both operating lease payments and rental costs related to the use of equipment during the normal course of business under nonbinding terms. Future minimum operating lease payments are as follows:
2017 | $ | 482,000 |
2018 | 328,000 |
2019 | 192,000 |
Thereafter | — |
Total minimum lease payments | $ | 1,002,000 |

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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://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21475-112644 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02.19,20,22) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 + Details
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