Revolving Credit Facility |
6 Months Ended |
|---|---|
Jun. 30, 2017 | |
| Debt Disclosure [Abstract] | |
| Revolving Credit Facility |
Revolving Credit Facility
The Company had a revolving credit agreement with Wells Fargo Bank, N.A. with a borrowing limit of $25.0 million that was to mature on September 1, 2017, in accordance with its terms (the “Wells Fargo Credit Agreement”). The Company paid interest under the Wells Fargo Credit Agreement at LIBOR plus 1.25 percent (2.50 percent as of June 30, 2017, and 2.13 percent at December 31, 2016), and an annual commitment fee of 0.25 percent on the unused portion of the commitment. The Company settled its net borrowings under the Wells Fargo Credit Agreement daily, and as a result, classified its outstanding borrowings as current on its condensed consolidated balance sheet as of June 30, 2017. At June 30, 2017, and December 31, 2016, the outstanding balance under the Wells Fargo Credit Agreement was $12.0 million and $9.9 million, respectively. The Company was in compliance with the debt covenants set forth in the Wells Fargo Credit Agreement as of June 30, 2017.
On July 11, 2017, the Company entered into a revolving credit agreement with Bank of America, N.A with a borrowing limit of $25.0 million that matures on July 11, 2020 (the “Bank of America Credit Agreement”). In connection with the closing of the Bank of America Credit Agreement, the Company terminated the Wells Fargo Credit Agreement and satisfied in full the outstanding balance thereof through borrowings on the Bank of America Credit Agreement. The Company pays interest under the Bank of America Credit Agreement at LIBOR plus 1.25 percent on any borrowings and pays an annual commitment fee of 0.2 percent on the unused portion of the commitment.
The Bank of America Credit Agreement contains customary financial covenants, including financial covenants relating to the Company’s solvency, leverage, and minimum EBITDA. In addition, the Bank of America Credit Agreement restricts certain capital expenditures, lease expenditures, other indebtedness, liens on assets, guarantees, loans and advances, dividends, and merger, consolidation and the transfer of assets except as permitted in the Bank of America Credit Agreement. The Bank of America Credit Agreement is collateralized by the Company's manufacturing facility, accounts receivable balance, inventory balance and other assets.
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