Revolving Credit Facility and Long-Term Debt
|9 Months Ended|
Sep. 30, 2017
|Debt Disclosure [Abstract]|
|Revolving Credit Facility and Long-Term Debt||
Note 4 - Revolving Credit Facility and Long-Term Debt
The Company maintains a credit agreement (the “Agreement”) with its principal bank, Wells Fargo Bank, National Association (the “Bank”).
The Agreement provided for a $25.0 million revolving credit line, with a $6.0 million sublimit for standby letters of credit, at September 30, 2017. Of the $6.0 million sublimit for standby letters of credit, $5.9 million was used at September 30, 2017. Advances under the revolving credit facility bear interest, as selected by the Company, of either (a) a daily floating rate of one month LIBOR plus 1.75% or (b) a fixed rate of LIBOR plus 1.75%. The Agreement also provides for an unused commitment fee of 0.375% per year on the average daily unused amount of the revolving credit facility, as well as a fee of 1.75% of the face amount of each letter of credit reserved under the line of credit and 0.95% on standalone, fully secured letters of credit. The Company had no outstanding borrowings on its revolving credit line at September 30, 2017 and December 31, 2016. The line of credit expires on July 1, 2018.
The credit facility is collateralized by the Company’s accounts receivable and other rights to receive payment, general intangibles, inventory and equipment.
The Agreement requires the satisfaction of certain financial covenants as follows:
The Agreement includes certain additional restrictions as follows:
The Agreement also contains customary events of default. If an event of default under the Agreement occurs and is continuing, the Bank may declare any outstanding obligations under the Agreement to be immediately due and payable. At September 30, 2017, the Company was in compliance with all covenants.
The Company maintains a mortgage loan with the Bank with a balance of approximately $4.4 million and $4.6 million at September 30, 2017 and December 31, 2016, respectively, secured by the Company’s corporate office building in Vancouver, Washington. This loan requires monthly principal payments of $18,375 plus interest at a rate of one month LIBOR plus 2.00%, with the unpaid principal balance due July 1, 2022.
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.
Reference 1: http://www.xbrl.org/2003/role/presentationRef