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DEBT ARRANGEMENTS | 12 Months Ended
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Sep. 30, 2018
Debt Disclosure [Abstract] |
DEBT ARRANGEMENTS | 7. DEBT ARRANGEMENTS Long-term debt consisted of the following at September 30:
|  | 2018 |  |  | 2017 |
Term loan payable to a bank, payable in monthly principal and interest installments of $33. Interest is fixed at 3.99%. Collateralized by substantially all assets. Due June 23, 2022. |  | $ | 4,222 |  |  | $ | 4,446 |
Term loan payable to a bank, payable in monthly principal and interest Installments of $78. Interest is fixed at 5.06%. Collateralized by substantially all assets. Due July 2, 2023. |  |  | 5,392 |  |  |  | — |
Less: Current portion |  |  | (909 | ) |  |  | (224 | )
Less: Deferred debt issuance costs |  |  | (159 | ) |  |  | (64 | )
Long term total |  | $ | 8,546 |  |  | $ | 4,158 |
Cash interest payments of $233 and $230 were made in 2018 and 2017, respectively. The following table summarizes the annual principal payments under our term loans:
|  | 2019 |  |  | 2020 |  |  | 2021 |  |  | 2022 |  |  | 2023 |  |  | Total |
Term loans |  | $ | 909 |  |  | $ | 953 |  |  | $ | 1,002 |  |  | $ | 4,284 |  |  | $ | 2,466 |  |  | $ | 9,614 |
Credit Facility The term loan for $4,500 bears interest at a fixed rate of 3.99%, with monthly principal and interest payments of approximately $33. The term loan matures in June 2022. The balance on the term loan at September 30, 2018 was $4,222. The revolving line of credit for up to $2,000 ($3,500 subsequent to the amendment noted below) matures in June 2019 and bears interest at the Prime Rate (generally defined as the highest rate identified as the “Prime Rate” in The Wall Street Journal “Money Rates” column on the date the interest rate is to be determined, or if that date is not a publication date, on the publication date immediately preceding) less Twenty-five (25) Basis Points (0.25%). The balance on the revolving line of credit at September 30, 2018 was $0. We must pay accrued and unpaid interest on the outstanding balance under the credit line on a monthly basis. The Credit Agreement contains various restrictive covenants, including restrictions on the Company's ability to dispose of assets, make acquisitions or investments, incur debt or liens, make distributions to shareholders or repurchase outstanding stock, enter into related party transactions and make capital expenditures, other than upon satisfaction of the conditions set forth in the Credit Agreement. During the quarter ended June 30, 2018, the Credit Agreement also required us to maintain (i) a minimum debt service coverage ratio of not less than 1.25 to 1.0 and (ii) a debt to equity ratio of not greater than 2.50 to 1.00 until maturity. Upon an event of default, which includes certain customary events such as, among other things, a failure to make required payments when due, a failure to comply with covenants, certain bankruptcy and insolvency events, and defaults under other material indebtedness, FIB may cease advancing funds, increase the interest rate on outstanding balances, accelerate amounts outstanding, terminate the agreement and foreclose on all collateral. Amendment to Credit Arrangements In connection with the Acquisition, on July 2, 2018 the Company and FIB entered into an amendment to the Credit Agreement (as amended, the “Amended Credit Agreement”) to (i) provide the Company with an additional term loan (the “New Term Loan”) in the amount of $5,500, the proceeds of which were used to fund a portion of the cash consideration for the Acquisition, and (ii) increase the Company’s revolving line of credit from $2,000 to $3,500 (the “Amended Facility”), which the Company may borrow from time to time, subject to the terms of the Amended Credit Agreement, including as may be limited by the amount of the Company’s outstanding eligible receivables. The New Term Loan and the Amended Facility mature July 2, 2023 and June 30, 2019, respectively. The balance on the new term loan at September 30, 2018 was $5,392. Amounts outstanding under the New Term Loan bear interest at a fixed per annum rate of 5.06%, while interest accruing on the principal balance of the Facility remains unchanged, at a floating per annum rate equal to the Prime Rate (generally defined as the highest rate identified as the “Prime Rate” in The Wall Street Journal “Money Rates” column on the date the interest rate is to be determined, or if that date is not a publication date, on the publication date immediately preceding) less Twenty-five (25) Basis Points (0.25%). The New Term Loan requires monthly principal and interest payments equal to $78. The Company remains obligated to pay accrued and unpaid interest on the outstanding balance under the Amended Facility on a monthly basis. Following its amendment, the Company’s obligations under the Amended Credit Agreement (including with respect to the initial term loan made June 23, 2017) are guaranteed by BAS Evansville, Inc. (“BASEV”) as well as Seventh Wave Laboratories, LLC (“SWL”), each a wholly owned subsidiary of the Company. The Company’s obligations under the Amended Credit Agreement and BASEV’s and SWL’s obligations under their respective Guaranties are secured by first priority security interests in substantially all of the assets of the Company, BASEV, and the Purchaser respectively, as well as mortgages on the Company’s and BASEV’s facilities in West Lafayette, Indiana and Evansville, Indiana, respectively. The various restrictive covenants under the Amended Credit Agreement remain substantially consistent with those under the Credit Agreement, provided that the parties agreed (i) to modify the computation of the minimum debt service coverage ratio (but, not the ratio itself) to appropriately reflect relevant aspects of the Acquisition and (ii) to convert the debt to equity ratio in the Credit Agreement to a cash flow coverage ratio whereby, beginning with the fiscal quarter ended September 30, 2018, the ratio of the Company’s total funded debt (as defined in the Amended Credit Agreement) as of the last day of each fiscal quarter to its EBITDA (as defined in the Amended Credit Agreement) for the 12 months ended on such date may not exceed 4.50 to 1.00. The Company was in compliance with these covenants as of September 30, 2018. Subsequent Amendment to Credit Arrangements On September 28, 2018, the Company and FIB entered into an amendment (the “Subsequent Amendment”) to the Credit Agreement (as amended, the “Current Credit Agreement”) to provide the Company a construction draw loan in a principal amount not to exceed $4,445 and an equipment draw loan in a principal amount not to exceed $1,429 (collectively, the “Loans”). Each Loan matures March 28, 2025. As of September 30, 2018, there was a $0 balance, respectively, on both the construction draw loan and the equipment draw loan. Subject to certain conditions precedent, each Loan permits the Company to obtain advances aggregating up to the maximum principal amount available for such Loan through March 28, 2020. Amounts outstanding under the Loans bear interest at a fixed per annum rate of 5.20%. Each Loan requires monthly payments of accrued interest on amounts outstanding through March 28, 2020, and thereafter monthly payments of principal and interest on amounts then outstanding through maturity. Following the execution of the Subsequent Amendment, the Company’s obligations under the Current Credit Agreement (including with respect to the Loans) remain guaranteed by BASEV and SWL. The Company’s obligations under the Current Credit Agreement and BASEV’s and SWL’s obligations under their respective Guaranties are secured by first priority security interests in substantially all of the assets of the Company, BASEV, and SWL, respectively, as well as mortgages on the Company’s and BASEV’s facilities in West Lafayette, Indiana and Evansville, Indiana, respectively. The various restrictive covenants under the Current Credit Agreement remain substantially consistent, provided that the parties agreed to modify the computation of the minimum debt service coverage ratio (but, not the ratio itself) to exclude certain unfunded capital expenditures related to building expansion costs incurred during fiscal 2018 and 2019 from the computation. We incurred $69 of costs in June 2017 related to the Credit Agreement that was partially amortized in the second half of fiscal 2017 and fiscal 2018 with the remainder to be amortized through June 2022. We incurred $59 of costs in July 2018 related to the Amended Credit Agreement that was partially amortized in the fourth quarter of fiscal 2018 with the remainder to be amortized through June 2023. Further, we incurred $54 of costs in September 2018 related to the Second Amendment that will be amortized through March 2025. For the fiscal years ended September 30, 2018 and 2017, we amortized $19 and $5, respectively, into interest expense on the condensed consolidated statements of operations and comprehensive income (loss) for the Credit Agreement and Amended Credit Agreement. These noncash charges are included in depreciation and amortization on the consolidated statements of cash flows. As of September 30, 2018 and September 30, 2017, the unamortized portion of debt issuance costs related to our credit facility was $159 and $64, respectively, and was included in Long-term Debt, less current portion on the condensed consolidated balance sheets. Former Credit Facility On May 14, 2014, we entered into a Credit Agreement with Huntington Bank, which was subsequently amended on May 14, 2015 (“Agreement”). The Agreement included both a term loan and a revolving loan and was secured by mortgages on our facilities in West Lafayette and Evansville, Indiana and liens on our personal property. As of December 31, 2015, we were not in compliance with certain financial covenants of the Agreement, and during fiscal 2016 and most of the first nine months of fiscal 2017 we operated either in default of, or under forbearance arrangements with respect to, the Agreement. Under a series of forbearance arrangements, Huntington Bank agreed during the relevant forbearance periods to forbear from exercising its rights and remedies under the Agreement and from terminating the Company’s related swap agreement with respect to the Company’s non-compliance with applicable financial covenants under the Agreement and to continue to make advances under the Agreement. In exchange for Huntington Bank’s agreement to forbear from exercising its rights and remedies under the Agreement, the Company agreed to, among other things: (i) amend the maturity dates for the term and revolving loans under the Agreement (the last such amendment to July 31, 2017), (ii) take commercially reasonable efforts to obtain funds sufficient to repay the indebtedness in full upon the expiration of the forbearance periods, (iii) provide to Huntington Bank certain cash flow forecasts and other financial information, (iv) comply with a minimum cash flow covenant, (v) engage the services of a financial consultant and cause the financial consultant to provide Huntington Bank such information regarding its efforts as reasonably requested, and (vi) pay to Huntington Bank certain fees, including a forbearance fee, $27 of which was paid at the execution of the last forbearance agreement and an additional $100 was paid in June 2017. We incurred a total of $56 of costs related to certain of our forbearance arrangements that was amortized in the first, second and third quarters of fiscal 2017. Former Interest Rate Swap We entered into an interest rate swap agreement with respect to the loans with Huntington Bank to fix the interest rate with respect to 60% of the value of the term loan at approximately 5.0%. We entered into this interest rate swap agreement to hedge interest rate risk of the related debt obligation and not to speculate on interest rates. The changes in the fair value of the interest rate swap were recorded in Accumulated Other Comprehensive Income to the extent effective. The interest rate swap was terminated as of June 23, 2017 in connection with the satisfaction of our indebtedness to Huntington Bank and the balance was reduced to zero.

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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 + Details
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