Revolving Credit Facility |
3 Months Ended |
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Mar. 31, 2017 | |
| Debt Disclosure [Abstract] | |
| Revolving Credit Facility |
Revolving Credit Facility
The Company’s revolving credit agreement with Wells Fargo Bank, N.A., permits the Company to borrow up to $25.0 million through September 1, 2017, bearing interest at LIBOR plus 1.25 percent (2.13 percent as of March 31, 2017 and December 31, 2016). The Company must pay an annual commitment fee of 0.25 percent on the unused portion of the commitment. Currently, the revolving credit agreement matures on September 1, 2017. The credit agreement was amended effective March 31, 2017, to eliminate the Company's consecutive quarterly net losses covenant. The Company settles its net borrowings under the revolving credit agreement daily, and as a result, has classified its outstanding borrowings as current on its condensed consolidated balance sheet as of March 31, 2017. At March 31, 2017 and December 31, 2016, the outstanding balance under the revolving credit facility was $13.3 million and $9.9 million, respectively.
The revolving credit agreement contains financial covenants, including financial covenants relating to current ratio, leverage, and minimum EBITDA. In addition, the agreement restricts capital expenditures, lease expenditures, other indebtedness, liens on assets, guarantees, loans and advances, dividends, and merger, consolidation and the transfer of assets except in the ordinary course of business. The Company remains in compliance with these debt covenants as of March 31, 2017. The revolving credit facility is collateralized by the Company's manufacturing facility, accounts receivable balance, inventory balance and other miscellaneous assets.
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