XML 52 R15.htm IDEA: XBRL DOCUMENT v3.25.2
Long-term Debt and Other Credit Arrangements
 12 Months Ended
Apr. 30, 2025
Debt Disclosure [Abstract]  
Long-term Debt and Other Credit Arrangements Long-term Debt and Other Credit Arrangements
The components of the Company's long-term debt, excluding lease, deferred financing costs of $0.8 million related to the debt, and sale-leaseback related activity, as presented on the Condensed Consolidated Balance Sheet were as follows:
($ in thousands)April 30, 2025
PNC Loan Agreement$13,750 
Seller Notes23,935 
Total long-term debt$37,685 
Current portion of long-term debt$3,000 
Non-current portion of long-term debt34,685 
Total long-term debt$37,685 
See Note 12, Leases, Commitments and Contingencies, for more information on any long-term debt related to the Company's lease portfolio and Note 7, Sale-Leaseback Financing Transaction, for more information on any long-term debt related to the Company's sale-leaseback financing transaction.
PNC Loan Agreement
As noted in Note 4, Nu Aire Acquisition, the Company entered into a Loan Agreement (the "Loan Agreement") with PNC on November 1, 2024. The loans governed by the Loan Agreement include (i) a $20.0 million committed senior secured revolving line of credit facility (the "Revolving Credit Facility"), which contains an option to increase the facility upon request by the Company and approval by PNC, in its discretion, by an additional $10.0 million; and (ii) a $15.0 million term loan (the "Term Loan"). The Revolving Credit Facility and Term Loan mature on November 1, 2029. The Revolving Credit Facility and the Term Loan can be paid at any time without penalty.
For the Revolving Credit Facility, the interest rate will be selected by the Company at each advance from one of two options. Option one is a base rate option. Option two is a daily secured overnight financing rate. There is an unused fee of 0.15% to 0.25%, determined by the ratio of senior debt to the Company's EBITDA, of the unused daily balance of the Revolving Credit Facility. For the Term Loan, the principal will be paid in 60 substantially equal monthly installments commencing on November 1, 2024. Interest will be paid at the same time and calculated on the outstanding principal balance at an interest rate equal to the rate under Option 2 of the Revolving Credit Facility. The borrowing rate on the Term Loan was 5.96% as of April 30, 2025. The Company recorded interest expense of $486,000 related to the Term Loan for the fiscal year ending April 30, 2025.
At April 30, 2025, no advances were outstanding under the Revolving Credit Facility. Amounts available under the Revolving Credit Facility were $20,000,000 at April 30, 2025.
The Loan Agreement has customary reporting covenants. The principal financial covenants require that (1) the Company maintain on a consolidated basis a ratio of senior funded indebtedness to EBITDA of not more than 2.50 to 1.00 and (2) a fixed charge coverage ratio of at least 1.20 to 1.00. The Loan Agreement also contains covenants prohibiting under certain circumstances (1) the incurrence of certain indebtedness, (2) the granting of security interests by the Company to persons other than PNC, (3) the delivery of guaranties for debts of third parties, and (4) certain transactions not in the ordinary course of business. At April 30, 2025, the Company was in compliance with all of the financial covenants under the Loan Agreement.
Future minimum payments under the PNC Loan Agreement for the fiscal years ending April 30 are as follows:
($ in thousands)
2026$3,000 
20273,000 
20283,000 
20293,000 
20301,750 
Thereafter— 
Total
$13,750 
Seller Notes
As noted in Note 4, Nu Aire Acquisition, $23.0 million of the aggregate purchase price paid in the Nu Aire Acquisition was paid by the issuance of subordinated seller notes (the "Seller Notes") entered into by the Company on November 1, 2024. The Seller Notes will accrue interest at 8% per annum and will mature on November 1, 2027, at which time the outstanding principal amount and all unpaid accrued interest will become due and payable by the Company. The Company accrued $935,000 in PIK interest for the twelve months ended April 30, 2025.
The Seller Notes may be prepaid, in full or in part, any time without prepayment penalty, premium, or other fee; subject, however, to each seller's obligation not to accept any prepayment under the Seller Notes until all Secured Claims (as defined in the Seller Notes) have been paid to PNC. The Company's obligations under the Seller Notes are secured by a security agreement entered into between the Company and each shareholder of Nu Aire immediately prior to the completion of the acquisition (the "Sellers"), pursuant to which the Sellers have the option to cause the Company to issue shares of the Company's common stock to the Sellers, solely upon the occurrence of an event of default.
The rights of the Sellers to receive payments under the Seller Notes are subordinate to the rights of PNC under the Loan Agreement pursuant to a separate subordination agreement that the Sellers entered into with PNC on November 1, 2024 in connection with the Transaction.
Mid Cap Revolving Credit Facility
On December 19, 2022, the Company entered into a Credit and Security Agreement (the "Credit Agreement") with Mid Cap Funding IV Trust, as agent (the "Agent"), and the lenders from time to time party thereto (collectively, the "Lenders"). The Credit Agreement provided for a secured revolving line of credit initially up to $15.0 million (the "Mid Cap Revolving Credit Facility"). Availability under the Mid Cap Revolving Credit Facility was subject to a borrowing base calculated in accordance with the terms of the Credit Agreement and on the basis of eligible accounts and inventory and certain other reserves and adjustments. Pursuant to the Credit Agreement, the Company granted to the Agent, for itself and the Lenders, a first priority security interest in all existing and future acquired assets owned by the Company. Except as set forth in the Credit Agreement, borrowings under the Mid Cap Revolving Credit Facility bore interest at a rate equal to Term SOFR (Secured Overnight Financing Rate) plus 4.10%. The Company was required to make monthly interest payments on the Mid Cap Revolving Credit Facility, with the entire principal payment due at maturity.
At April 30, 2024, there was $3,000,000 outstanding under the Mid Cap Revolving Credit Facility, with remaining borrowing capacity under the Mid Cap Revolving Credit Facility of $11,587,000. The borrowing rate under the Mid Cap Revolving Credit Facility was 9.54% as of April 30, 2024. The Company was in compliance with all financial covenants under the Mid Cap Revolving Credit Facility at April 30, 2024.
On September 30, 2024, the Company terminated the Mid Cap Revolving Credit Facility. At the time of termination, there was a $3.0 million balance outstanding under the Mid Cap Revolving Credit Facility, which was paid off in full as part of termination. The Company incurred $0.5 million in related expenses as a result of the termination.
International Subsidiaries Short-Term Borrowings
The Company's International subsidiaries had a balance outstanding of $986,000 and $99,000 in short-term borrowings related to overdraft protection and short-term loan arrangements at April 30, 2025 and 2024, respectively.
At April 30, 2025, there were foreign bank guarantees outstanding to customers in the amounts of $8.1 million, $1.2 million, $450,000, and $653,000 with expiration dates in fiscal years 2026, 2027, 2028, and 2029, respectively, collateralized by certain assets of the Company's subsidiaries in India. At April 30, 2024, there were bank guarantees issued by foreign banks outstanding to customers in the amounts of $7.1 million, $435,000, and $226,000 with expiration dates in fiscal years 2025, 2026, and 2027, respectively, collateralized by certain assets of the Company's subsidiaries in India.