XML 47 R12.htm IDEA: XBRL DOCUMENT
v2.4.0.8

NOTES PAYABLE AND CAPITAL LEASE OBLIGATIONS | 9 Months Ended
--- | ---
Sep. 30, 2014
Notes Payable And Capital Lease Obligations |
NOTES PAYABLE AND CAPITAL LEASE OBLIGATIONS | Notes payable and capital lease obligations consisted of the following:
|  | September 30, |  |  | December 31, |
|  | 2014 |  |  | 2013 |
|  | (Unaudited) |  |  |  |
Revolving credit note payable to PNC Bank N.A. ("PNC") |  | $ | 15,232,000 |  |  | $ | 12,029,000 |
Term Loan A, PNC |  |  | 2,517,000 |  |  |  | 1,948,000 |
Capital lease obligations |  |  | 1,539,000 |  |  |  | 1,787,000 |
Notes payable to sellers of WMI |  |  | 218,000 |  |  |  | 732,000 |
Junior subordinated notes |  |  | - |  |  |  | 1,000,000 |
Subtotal |  |  | 19,506,000 |  |  |  | 17,496,000 |
Less: Current portion of notes and capital obligations |  |  | (16,315,000 | ) |  |  | (14,969,000 | )
Notes payable and capital lease obligations, net of current portion |  | $ | 3,191,000 |  |  | $ | 2,527,000 |
PNC Bank N.A. ("PNC") The Company has a loan facility with PNC (the “Loan Facility”) secured by substantially all of its assets. On April 1, 2014, the Loan Facility was amended and the Company paid a loan amendment fee of $15,000. These amendments added Woodbine as a borrower on the Loan Facility and increased the maximum borrowings to $22,676,000 less repayments of Term Loan A made on or after the closing date. The maximum borrowings consisted of the following:
(i) | a $20,000,000 revolving loan (includes inventory sub-limit of $12,500,000) and
(ii) | $2,676,000 for Term Loan A.
On June 9, 2014, the Loan Facility was further amended. These amendments added Eur-Pac as a borrower on the Loan Facility and increased the maximum borrowings to $25,613,000 less repayments of Term Loan A made on or after the closing date. The maximum borrowings consisted of the following:
(i) | a $23,000,000 revolving loan (includes inventory sub-limit of $15,000,000) and
(ii) | $2,613,000 for Term Loan A.
On October 1, 2014, the Loan Facility was again amended coincident with the acquisition of AMK (see Note 2). This amendment added AMK as a borrower on the Loan Facility and increased the maximum borrowings to $29,112,000 less repayments of Term Loan A made on or after the closing date. The amendment also allowed for a Seller Mortgage and Note in the amount of $2,500,000, granted by AMK and Air Group in favor of the former owner of AMK. The maximum borrowings consist of the following:
(i) | a $23,000,000 revolving loan (includes inventory sub-limit of $15,000,000);
(ii) | $2,613,000 term loan, less repayments for Term Loan A and
(iii) | a new term loan of $3,500,000 (“Term Loan B”).
Under the terms of the Loan Facility the revolving credit note bears interest at (a) the sum of the Alternate Base Rate plus three quarters of one percent (0.75%) with respect to Domestic Rate Loans and (b) the sum of the Eurodollar Rate plus two and one half of one percent (2.50%) with respect to Eurodollar Rate Loans. The revolving credit note had an interest rate of 4.0 % per annum at both September 30, 2014 and December 31, 2013, and an outstanding balance of $15,232,000 and $12,029,000, respectively. The maturity date of the revolving credit note is November 30, 2016. Each day, the Company's cash collections are swept directly by the bank to reduce the revolving loan and the Company then borrows according to a borrowing base. As such, the Company generally has no cash on hand. Because the revolving loan contains a subjective acceleration clause which could permit PNC to require repayment prior to maturity, the loans are classified with the current portion of notes and capital lease obligations. Under the terms of the Loan Facility prior to the amendment discussed below, the maturity date of Term Loan A was the first business day (as defined) of January 2015. Term Loan A bore interest equal to (a) the sum of the Alternate Base Rate plus one and three quarters of one percent (1.75%) with respect to Domestic Rate Loans or (b) the sum of the Eurodollar Rate plus three percent (3.00%) with respect to Eurodollar Rate Loans. Repayment under Term Loan A consisted of 19 consecutive monthly principal installments, the first 18 of which were $150,000 commencing on the first business day of July 2013, with the 19th and final payment of any unpaid balance of principal and interest payable on the first business day of January 2015. On April 1, 2014, the Company borrowed an additional $1,328,000. The repayment of Term Loan A was amended on that date to thirty-two consecutive monthly principal installments, the first thirty-one of which shall be in the amount of $31,859 commencing on the first business day of May 2014, and continuing on the first business day of each month thereafter, with a thirty-second and final payment of any unpaid balance of principal and interest on the last business day of November 2016. Term Loan A bears interest equal to (a) the sum of the Alternate Base Rate plus one and three quarters of one percent (1.75%) with respect to Domestic Rate Loans or (b) the sum of the Eurodollar Rate plus three percent (3.00%) with respect to Eurodollar Rate Loans. At September 30, 2014 and December 31, 2013, the balance due under Term Loan A was $2,517,000 and $1,948,000, respectively. To the extent that the Company disposes of collateral used to secure the Loan Facility, other than inventory, the Company must promptly repay the draws on the credit facility in an amount equal to the net proceeds of such sale. The terms of the Loan Facility require that, among other things, the Company maintain a specified Fixed Charge Coverage Ratio. In addition, the Company is limited in the amount of Capital Expenditures it can make. The Company is also limited to the amount of Dividends it can pay its shareholders as defined in the Loan Facility. As of both September 30, 2014 and December 31, 2013, the Company was in compliance with all terms of the Loan Facility. The Company's receivables are payable directly into a lockbox controlled by PNC (subject to the terms of the Loan Facility). PNC may use some elements of subjective business judgment in determining whether a material adverse change has occurred in the Company's condition, results of operations, assets, business, properties or prospects allowing it to demand repayment of the Loan Facility. As of September 30, 2014 the future minimum principal payments for Term Loan A are as follows:
For the twelve months ending |  | Amount |
September 30, 2015 |  | $ | 382,000 |
September 30, 2016 |  |  | 382,000 |
September 30, 2017 |  |  | 1,753,000 |
PNC Term Loan Payable |  |  | 2,517,000 |
Less: Current portion |  |  | (382,000 | )
Long-term portion |  | $ | 2,135,000 |
Interest expense related to the Loan Facility amounted to approximately $186,000 and $197,000 for the three months ended September 30, 2014 and 2013, respectively, and $597,000 and $737,000 for the nine months ended September 30, 2014 and 2013, respectively. On October 1, 2014, the Company borrowed $3,500,000 under Term Loan B for the acquisition of AMK. The repayment of Term Loan B consists of sixty consecutive monthly principal installments, the first fifty-nine of which shall be in the amount of $58,333 commencing on the first business day of December 2014, and continuing on the first business day of each month thereafter, with a sixtieth and final payment of any unpaid balance of principal and interest on the last business day of November 2019. Term Loan B bears interest at the same rate as Term Loan A. The first interest payment was on the first business day of November 2014. Capital Leases Payable – Equipment The Company is committed under several capital leases for manufacturing and computer equipment. All leases have bargain purchase options exercisable at the termination of each lease. Capital lease obligations totaled $1,539,000 and $1,787,000 as of September 30, 2014 and December 31, 2013, respectively, with various interest rates ranging from 7.0% to 9.5%. As of September 30, 2014, the aggregate future minimum lease payments, including imputed interest, with remaining terms of greater than one year are as follows:
For the twelve months ending |  | Amount |
September 30, 2015 |  | $ | 584,000 |
September 30, 2016 |  |  | 532,000 |
September 30, 2017 |  |  | 377,000 |
September 30, 2018 |  |  | 197,000 |
September 30, 2019 |  |  | 29,000 |
Thereafter |  |  | 11,000 |
Total future minimum lease payments |  |  | 1,730,000 |
Less: imputed interest |  |  | (191,000 | )
Less: current portion |  |  | (483,000 | )
Total Long Term Portion |  | $ | 1,056,000 |
Notes Payable – Sellers of WMI In connection with the acquisition of WMI on August 24, 2007, the Company incurred a note payable (“Note”) to the former stockholders of WMI. The obligation under the Note is subordinate to the Company’s indebtedness to PNC. As of September 30, 2014 and December 31, 2013, the balance owed to the sellers of WMI is $218,000 and $732,000, respectively.
|  | September 30, |  |  | December 31, |
|  | 2014 |  |  | 2013 |
|  | (Unaudited) |  |  |  |
Former Welding Stockholders |  | $ | 218,000 |  |  | $ | 732,000 |
Less: Current Portion |  |  | (218,000 | ) |  |  | (691,000 | )
Total long-term portion |  | $ | - |  |  | $ | 41,000 |
The Note and payment terms have been adjusted and/or amended several times. On October 1, 2010, the Company entered into a letter agreement with the former stockholders of WMI making the new balance of the note $2,397,967. Payments on the note began on October 1, 2010. It was further agreed that payments would be made according to the following schedule: equal monthly installments of $40,000 on the first business day of each month until December 31, 2011, followed by equal monthly installments of $60,000 on the first business day of each month commencing on January 1, 2012 and continuing until the entire principal amount of the obligation is paid in full, which is estimated to be in January 2015. Interest shall accrue at the rate of 7% per annum, and each payment will first apply to interest and then to principal. At September 30, 2014 and December 31, 2013, the balance owed under the note was $218,000 and $732,000, respectively. Interest expense related to the note payable to the former stockholders of WMI was $6,000 and $17,000 for the three months ended September 30, 2014 and 2013, respectively, and $27,000 and $61,000 for the nine months ended September 30, 2014 and 2013, respectively. Junior Subordinated Notes In 2008 and 2009, the Company sold in a series of private placements to accredited investors $5,990,000 of principal amount in Junior Subordinated Notes. The notes bear interest at the rate of 1% per month (or 12% per annum). In connection with the offering of the Company's Junior Subordinated Notes, the Company issued to Taglich Brothers, Inc. ("Taglich Brothers"), as placement agent, a Junior Subordinated Note in the principal amount of $510,000. The terms of the note issued to Taglich Brothers are identical to the notes. In connection with the amounts raised in 2009, the Company issued to Taglich Brothers a Junior Subordinated Note on the same terms as the Junior Subordinated Notes referred to above for commission of $44,500. In conjunction with the Private Placement of our common stock to raise money for the NTW Acquisition, the Company solicited the holders of our Junior Subordinated Notes to convert their notes to Common Stock at a price of $6.00 per share. On June 29, 2012, the Company issued 867,461 shares of its Common Stock in exchange for approximately $5,204,000 of its Junior Subordinated Notes. On July 26, 2012, the Company repaid $115,000 of our Junior Subordinated Notes along with the accrued interest thereon of approximately $1,000. On June 3, 2014, in conjunction with our Registered Direct Offering (see Note 8), the holders of our remaining Junior Subordinated Notes converted their notes to Common Stock at a price of $9.00 per share. On the same date, the Company paid the remaining accrued interest of $1,000 that was due to the holders. The balance owed on the Junior Subordinated Notes at September 30, 2014 was $0 and at December 31, 2013 amounted to $1,000,000. Interest expense on the Junior Subordinated Notes amounted to $0 and $30,000 for the three months ended September 30, 2014 and 2013, respectively and $61,000 and $90,000 for the nine months ended September 30, 2014 and 2013, respectively.

X
- Details
Name: | AIRI_NotesPayableAndCapitalLeaseObligationsAbstract
Namespace Prefix: | AIRI_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for debt and capital lease obligations can be reported. 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. Also includes descriptions and amounts of capital leasing arrangements that consist of direct financing, sales type and leveraged leases. Disclosure may include the effect on the balance sheet and the income statement resulting from a change in lease classification for leases that at inception would have been classified differently had guidance been in effect at the inception of the original lease. + References No definition available. + Details
Name: | us-gaap_DebtAndCapitalLeasesDisclosuresTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration