XML 29 R19.htm IDEA: XBRL DOCUMENT

Note 9 - Debt

9 Months Ended

Oct. 01, 2023

(9)

Debt

Debt outstanding consists of the following (in thousands):

	October 1,			December 31,
	2023			2022
	(Unaudited)
Current:
Finance lease obligation, current portion	$	1,168		$	1,102
Equipment financing obligations, current portion		624			398
Working capital line of credit		500			0
Note payable – related party, current portion		0			2,500
Current portion of long term debt and finance lease obligations	$	2,292		$	4,000
Long Term:
Finance lease obligation	$	1,834		$	2,536
Equipment financing obligations		1,429			738
Note payable – related party		4,000			4,000
Less unamortized debt issuance and modification costs		(7	)		(11	)
Long term debt and finance lease obligations net of unamortized debt costs	$	7,256		$	7,263

Note Payable – Related Party

The Company has received the benefit of cash infusions from Gill Family Capital Management, Inc. (“GFCM”) in the form of a secured promissory note (the “Note”), with obligations totaling $4,000,000 and $6,500,000 in principal as of October 1, 2023 and December 31, 2022, respectively. GFCM is an entity controlled by the Company’s Chairman, President and Chief Executive Officer, Jeffrey T. Gill, and one of our directors, R. Scott Gill. GFCM, Jeffrey T. Gill and R. Scott Gill are significant beneficial stockholders of the Company. As of October 1, 2023, our principal commitment under the Note was $2,000,000 due on April 1, 2024 and the balance on April 1, 2026. Interest on the Note is payable quarterly, and the rate is reset on April 1 of each year, at the greater of 8.0% or 500 basis points above the five-year Treasury note average during the preceding 90-day period, which was 8.8% as of October 1, 2023.

Subsequent to the third quarter ended October 1, 2023, the Company and GFCM amended the Note to, among other things: (i) increase the amount by $2,500,000 to $6,500,000, (ii) extend the maturity dates for $2,000,000 of the obligation to April 1, 2025, $2,000,000 to April 1, 2026 and the balance to April 1, 2027, (iii) adjust the interest rate beginning on November 10, 2023 and on each April 1 thereafter, to reflect the greater of 8% or 500 basis points above the five-year Treasury note average during the previous 90-day period, and (iv) allow for the deferral of payment for up to 60% of the interest due on the Note to April 1, 2025 (see Note 16).

Obligations under the Note are guaranteed by all of the subsidiaries and are secured by a first priority lien on substantially all assets of the Company, including those in Mexico.

Working Capital Line of Credit

During 2023, the Company established a $500,000 unsecured line of credit with BBVA Mexico in support of working capital needs of our Mexican subsidiary. The term of the line extends through February 2024 and provides for interest at 8.75% per annum. As of October 1, 2023, the Company had $500,000 outstanding on the line of credit.

Finance Lease Obligations

As of October 1, 2023, the Company had $3,002,000 outstanding under finance lease obligations for both property and machinery and equipment at its Sypris Technologies locations with maturities through 2026 and a weighted average interest rate of 8.6%.

Equipment Financing Obligations

As of October 1, 2023, the Company had $2,053,000 million outstanding under equipment financing obligations, with effective interest rates ranging from 4.4% to 8.1% and payments due through 2028. Payments on the Company’s equipment financing obligations are due as follows (in thousands):

Next 12 months	$	744
12 to 24 months		588
24 to 36 months		460
36 to 48 months		358
48 to 60 months		186
Thereafter		0
Total payments		2,336
Less imputed interest		(283	)
Total equipment financing obligations	$	2,053