| Long-Term Debt |
NOTE 7. LONG-TERM DEBT
Long-term debt, net as of December 31, 2013 and December 31, 2012, was as follows:
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December 31,
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2013
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2012
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Revolving credit facilities (a)
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$
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10,320
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$
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20,000
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Foreign credit facilities (b)
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997
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3,995
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5% Senior Subordinated Notes due 2017 (c)
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17,154
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15,992
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Capital leases (d)
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47
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119
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Term notes (e)
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9,523
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382
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38,041
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40,488
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Less current portion
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(1,910)
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(4,059)
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$
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36,131
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$
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36,429
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(a)
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As of December 31, 2013, the Company had drawn $10,320 on a $30,000 revolving credit facility with Zions First National Bank (the “Lender”) with a maturity date of March 8, 2016. On February 28, 2014, the Company together with its direct and indirect domestic subsidiaries entered into a first amendment (the “Amendment”) to the amended and restated loan agreement dated March 8, 2013 (the “Loan Agreement”) with the Lender to reduce its existing Term Facility from $15,000 to $10,000 pursuant to an amended and restated term loan promissory note (the “Amended and Restated Term Loan Promissory Note”). Also pursuant to the Amendment, the Company terminated its outstanding Acquisition Facility which previously allowed the Company to borrow up to $10,000 to fund permitted acquisitions and amended certain covenants.
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Under the Loan Agreement, the Company has an existing $30,000 Revolving Line of Credit for funding general corporate needs. Under the Amended and Restated Term Loan Promissory Note, the Lender has made available $10,000 for funding permanent working capital. The Amended and Restated Term Loan Promissory Note is due and payable in monthly payments of principal and interest, with all principal and interest due March 8, 2023.
All debt associated with the Loan Agreement bears interest at one-month London Interbank Offered Rate (“LIBOR”) plus an applicable margin as determined by the ratio of Total Senior Debt to Trailing Twelve Month EBITDA as follows: (i) one month LIBOR plus 3.75% per annum at all times that Total Senior Debt to Trailing Twelve Month EBITDA ratio is greater than or equal to 2.75; (ii) one month LIBOR plus 2.75% per annum at all times that Total Senior Debt to Trailing Twelve Month EBITDA ratio is less than 2.75. The Loan Agreement requires the payment of an unused commitment fee of (i) .6% per annum at all times that the ratio of Total Senior Debt to Trailing Twelve Month EBITDA is greater than or equal to 2.75, and (ii) .4% per annum at all times that the Total Senior Debt to Trailing Twelve Month EBITDA is less than 2.75.
The Loan Agreement contains certain restrictive debt covenants that require the Company and its subsidiaries to maintain an EBITDA based minimum Trailing Twelve Month EBITDA, a minimum net worth, a positive amount of asset coverage, and limitations on capital expenditures all as calculated in the Loan Agreement. In addition, the Loan Agreement contains covenants restricting the Company and its subsidiaries from pledging or encumbering their assets, with certain exceptions, and from engaging in acquisitions other than acquisitions permitted by the Loan Agreement. The Loan Agreement contains customary events of default (with grace periods where customary) including, among other things, failure to pay any principal or interest when due; any materially false or misleading representation, warranty, or financial statement; failure to comply with or to perform any provision of the Loan Agreement; and default on any debt or agreement in excess of certain amounts.
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(b)
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The Company’s foreign subsidiaries have revolving credit facilities with various financial institutions. As of December 31, 2013 and 2012, the credit limit on these facilities was approximately $1,956 and $2,593, respectively, and the Company’s foreign subsidiaries had drawn $314 and $1,426, respectively, on these facilities. The facilities have variable interest rates ranging from 2.75% to 3.3% as of December 31, 2013 with maturities ranging from due on demand through December 31, 2014. The facilities are secured by accounts receivable. The Company had $340 and $1,488 in letters of credit as of December 31, 2013 and 2012, respectively.
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Liabilities assumed through the Company’s acquisitions of POC and PIEPS included receivable securitization facilities with foreign financial institutions, which are utilized in the normal course of business as part of managing cash flows. As of December 31, 2013 and 2012, the Company had utilized $683 of the available $2,314 and $2,569 of the available $4,947 on these facilities, respectively. The Company's obligations to the financial institutions are collateralized by accounts receivable. The interest rate is variable and was 3.56% as of December 31, 2013 maturing on December 31, 2014. At December 31, 2013 and 2012, the Company's consolidated balance sheet included $683 and $2,569 receivables that were securitized, respectively, and $683 and $2,569 of associated liabilities, respectively.
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(c)
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In connection with the Gregory Merger, $22,056 and $554 in subordinated notes were issued to the Gregory Stockholders. The notes have a seven year term, 5% stated interest rate payable quarterly, and are prepayable at any time. Given the below market interest rate for comparably secured notes and the relative illiquidity of the notes, we discounted the notes to $13,127 and $316, respectively, at date of acquisition. We are accreting the discount on the notes to interest expense using the effective interest method over the term of the notes. During the years ended December 31, 2013 and 2012, $1,162 and $1,012, respectively, of the discounts were accreted and recorded as interest expense in the accompanying statements of comprehensive (loss) income.
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(d)
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Various capital leases payable to banks: interest rates ranging from 6.10% to 7.00%; monthly installments ranging from $1 to $4; ending between April 2014 and November 2016; secured by certain equipment.
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(e)
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The Loan Agreement also provides for a Term Facility pursuant to which the Lender has made available $15,000 for funding permanent working capital, of which $10,000 was used upon the close of the Loan Agreement to reduce amounts owed on the already existing revolving credit facility. On February 28, 2014, the Loan Agreement was amended to eliminate the remaining $5,000 of unused term debt. The Term Facility is due and payable in monthly payments of principal and interest based on a 10-year amortization from March 8, 2013. Other various term loans are payable to financial institutions and a government entity with interest rates ranging from 0.75% to 5.50% monthly installments ranging from $0 to $3. The notes mature between January 2016 and March 2017 and are secured by certain equipment.
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The aggregate maturities of long-term debt and revolving lines of credit for the years subsequent to December 31, 2013 are as follows:
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2014
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$
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1,910
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2015
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936
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2016
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11,258
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2017
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23,654
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2018
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1,003
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Thereafter
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4,737
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Total future long-term debt payments
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43,498
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Less amount representing debt discounts
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(5,457)
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Total carrying amount of long-term debt
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38,041
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Less current portion
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(1,910)
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Long-term debt obligations
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$
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36,131
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Property held under capital leases as of December 31, 2013 and 2012, was $228 and $268, respectively, and accumulated amortization was $98 and $87, respectively.
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