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Note 10 - Debt | 12 Months Ended
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Dec. 31, 2024
Notes to Financial Statements |
Debt Disclosure [Text Block] |
(10) | DEBT
Letters of Credit We have issued letters of credit as the security deposits for certain of our domestic leases. These letters of credit are secured by pledged certificates of deposit which are classified as Restricted Certificates of Deposit on our consolidated balance sheets. The terms of our leases require us to renew these letters of credit at least 30 days prior to their expiration dates for successive terms of not less than one year until lease expiration. Our outstanding letters of credit at December 31, 2024 and December 31, 2023 consisted of the following:
(in thousands) |  |  |  | L/C |  | Lease |  | Letters of Credit Amount Outstanding |
Facility |  | Original L/C Issue Date |  | Expiration Date |  | Expiration Date |  | Dec. 31 2024 |  |  | Dec. 31 2023 |
Mt. Laurel, NJ |  | 3/29/2010 |  | 4/30/2025 |  | 4/30/2031 |  | $ | 50 |  |  | $ | 50 |
Mansfield, MA |  | 10/27/2010 |  | 12/31/2025 |  | 2/29/2032 |  |  | 50 |  |  |  | 50 |
|  |  |  |  |  |  |  | $ | 100 |  |  | $ | 100 |
Credit Facility On October 15, 2021 (the “Closing Date”), we entered into an Amended and Restated Loan and Security Agreement with M&T Bank (“M&T”) which, on October 28, 2021, was amended by the Joinder and Amendment to Amended and Restated Loan and Security Agreement and which, on December 30, 2021, was further amended by the Joinder and Second Amendment to Amended and Restated Loan and Security Agreement (as amended, the “Loan Agreement”). The Loan Agreement included a $25 million non-revolving delayed draw term note (the “Term Note”) and a $10 million revolving credit facility (the “Revolving Facility” and together with the Term Note, the “Credit Facility”). The Credit Facility had a five-year contract period (the “Contract Period”) that began on the Closing Date and expired on October 15, 2026, and draws under the Term Note were permissible for two years. On September 20, 2022, we further amended the Loan Agreement by entering into a Third Amendment to Amended and Restated Loan and Security Agreement (the Loan Agreement, as amended by the Third Amendment, the “Amended Loan Agreement”) and the Third Amended and Restated Delayed Draw Term Note. Under the Amended Loan Agreement, the maximum loan amount that we may borrow under the Term Note increased from $25 million to $50.5 million. Under the Amended Loan Agreement, the maturity date of the Term Note and Revolving Facility were also extended to September 19, 2027. On May 2, 2024, we entered into a Fourth Amendment to the Amended and Restated Loan and Security Agreement (the “Fourth Amendment”), which extended the period during which we may request advances under the Term Note until May 2, 2026, and the maturity date for the Term Note and Revolving Facility was extended from September 19, 2027 to May 2, 2031. On December 18, 2024, we entered into a Joinder and Fifth Amendment to Amended and Restated Loan and Security Agreement (the “Fifth Amendment”) and related agreements (collectively, together with Loan Agreement, the Amended Loan Agreement, the Fourth Amendment, the “Credit Agreement”) with M&T Bank to add our subsidiary, inTEST Italy, Inc., as a subsidiary guarantor under the Credit Agreement. At December 31, 2024, we had not borrowed any amounts under the $10 million Revolving Facility and based on our leverage, our unused facility fee was 0.15%. Our borrowings under the Term Note are discussed below and occurred prior to entering into the Amended Loan Agreement. Our available funding under the Term Note at December 31, 2024 was $30 million. The principal balance of the Revolving Facility and the principal balance of any amount drawn under the Term Note accrues interest based on the secured overnight financing rate for U.S. government securities (“SOFR”) or a bank-defined base rate plus an applicable margin, depending on leverage. Each draw under the Term Note will have an option for us of either (i) up to a five-year amortizing term loan with a balloon due at maturity, or (ii) up to a five-year term with up to seven years amortization with a balloon due at maturity. Any amortization greater than five years will be subject to an excess cash flow recapture. The Amended Loan Agreement also allows us to enter into hedging contracts with M&T, including interest rate swap agreements, interest rate cap agreements, interest rate collar agreements, or any other agreements or that are designed to protect us against fluctuations in interest rates or currency exchange rates. The Credit Agreement contains customary default provisions, including but not limited to the failure by us to repay obligations when due, violation of provisions or representations provided in the Credit Agreement, bankruptcy by us, suspension of our business or any of our subsidiaries and certain material judgments. After expiration of the Contract Period or if a continued event of default occurs, interest will accrue on the principal balance at a rate of 2% in excess of the then applicable non-default interest rate. The Credit Agreement includes customary affirmative, negative and financial covenants, including a maximum ratio of consolidated funded debt to consolidated EBITDA of not more than 3.0 to 1.0 and a fixed charge coverage ratio of not less than 1.25 to 1.0. Our obligations under the Credit Agreement are secured by liens on substantially all of our tangible and intangible assets that are owned as of the Closing Date or acquired thereafter. At December 31, 2024, we were in compliance with all of the covenants included in the Credit Facility including the debt covenants of the Credit Agreement. On October 28, 2021, we drew $12 million under the Term Note to finance the acquisition of Videology® and we also entered into an interest rate swap agreement with M&T as of this date which is designed to protect us against fluctuations in interest rates during the five-year repayment and amortization period. As a result, the annual interest rate we expect to pay for this draw under the Term Note is fixed at approximately 3.2% based on current leverage. On December 29, 2021, we drew $8.5 million under the Term Note to finance the acquisition of Acculogic. We did not enter into an interest rate swap agreement with M&T related to this draw. The annual interest rate we expect to pay for this draw under the Term Note is variable. At December 31, 2024, it was approximately 6.6% based on current leverage. Effective March 1, 2024, this rate was approximately 6.4%. The following table sets forth the remaining maturities of our Term Note:
(in thousands) |  |  |  |
2025 |  | $ | 4,100 |
2026 |  |  | 3,842 |
Total remaining maturities of our Term Note |  | $ | 7,942 |
Alfamation™ Debt In connection with our acquisition of Alfamation™ as discussed in “Note (3) Acquisition,” we assumed debt which totaled $11.3 million as of the acquisition date (the “Alfamation Debt”). As of December 31, 2024, the Alfamation Debt is comprised of $4.1 million of both fixed and variable rate bank issued term loans spread across several different institutions with monthly, quarterly or half-year repayment schedules and maturity dates running through December 7, 2028, as well as $3.0 million of short-term variable rate financing backed by Alfamation™’s accounts receivable, with a quarterly repayment schedule. The short-term financing variable rate at December 31, 2024 was 3.9%. At December 31, 2024, the weighted average interest rate payable on the bank issued term loans was 1.18% for fixed rate debt, 4.35% for variable rate debt, and the overall weighted average interest rate for the bank issued term loans was 3.47%. The following table sets for the remaining maturities for our Alfamation Debt:
(in thousands) |  |  |  |
2025 |  | $ | 3,394 |
2026 |  |  | 929 |
2027 |  |  | 515 |
2028 |  |  | 2,252 |
Total remaining maturities of our Alfamation Debt |  | $ | 7,090 |

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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/disclosureRef -Topic 470 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481544/470-10-50-6 Reference 2: 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