• Filing Date: 2017-08-09
  • Form Type: 10-Q
  • Description: Quarterly report
v3.7.0.1
DEBT
3 Months Ended
Jun. 30, 2017
Debt Disclosure [Abstract]  
DEBT
DEBT
Our debt consisted of the following (in thousands):
 
As of
 
June 30, 2017
 
March 31, 2017
Convertible subordinated debt:
 
 
 
4.50% convertible subordinated notes
$
63,090

 
$
63,090

Unamortized debt issuance costs
(164
)
 
(263
)
Convertible subordinated debt, net of unamortized debt issuance costs
$
62,926

 
$
62,827

 
As of
 
June 30, 2017
 
March 31, 2017
Long-term debt:
 
 
 
Revolving credit agreement
$
13,403

 
$
18,500

Term loan agreement
50,000

 
50,000

Unamortized discount and debt issuance costs
(3,184
)
 
(3,472
)
Long-term debt, net of unamortized discount and debt issuance costs
$
60,219

 
$
65,028


Convertible Subordinated Debt

In the third quarter of fiscal 2013, we issued $70 million aggregate principal amount of 4.50% convertible subordinated notes (4.5% Notes) due November 15, 2017. These notes are convertible into shares of our common stock until November 14, 2017 at the option of the holders at a conversion rate of 75.896 shares per $1,000 principal amount, a conversion price of approximately $13.20 per share. The 4.50% notes require semi-annual interest payments paid on May 15 and November 15 of each year and have no early call provisions.
Long-term Debt
Our credit facility includes a revolving credit and security agreement entered into with PNC Bank, National Association (“revolving credit agreement”) and a term loan credit and security agreement entered into with TCW Asset Management Company LLC (“term loan agreement”).
Revolving credit agreement

Under the revolving credit agreement, we have the ability to borrow the lesser of $80 million or the amount of the monthly borrowing base, which is reduced by $1.0 million of the outstanding letters of credit. Our borrowing base is established monthly based on certain working capital asset balances. The revolving credit agreement also includes an uncommitted accordion in an amount up to $20 million. The revolving credit agreement matures on October 21, 2021. As of June 30, 2017, our excess availability under the revolving credit agreement was $39.6 million.
Borrowings under the revolving credit agreement bear interest at a rate per annum equal to, at our option, either (a) the greatest of (i) the base rate, (ii) the Federal funds rate plus 0.50% and (iii) the LIBOR rate based upon an interest period of 1 month plus 1.0%, plus an applicable margin of 1.50%, or (b) the LIBOR rate plus an applicable margin of 2.50%. The base rate is defined in the revolving credit agreement. Additionally, we are required to pay a 0.375% commitment fee on undrawn amounts under the revolving credit agreement on a quarterly basis, which is recorded as interest expense in the period incurred. As of June 30, 2017, we had a $13.4 million outstanding balance on the revolving credit agreement at an interest rate of 5.75%.
Term loan agreement

The term loan agreement provides for $50 million of a senior secured term loan which was at the time we entered into the credit facility and $20 million of a senior secured delay draw term loan (“DDTL”). Borrowings under the DDTL are restricted to be used only to redeem our 4.50% convertible subordinated notes due November 15, 2017. The term loan agreement matures on October 21, 2021. The amount outstanding under the term loan is to be repaid on a quarterly basis in an amount equal to 1.25% of the original principal amount beginning on March 31, 2018, with any remaining principal balance due on the maturity of the term loan.
Borrowings under the term loan agreement bear interest at a rate per annum equal to, at our option, either (a) the greatest of (i) 3.00%, (ii) the Federal funds rate plus 0.50%, (iii) the LIBOR rate based upon an interest period of 1 month plus 1.0% and (iv) the “prime rate” last quoted by the Wall Street Journal, plus a margin ranging from 6.00% to 7.25% based on the applicable senior net leverage ratio, or (b) the LIBOR rate plus 7.00% to 8.25% based on the applicable senior net leverage ratio. The senior net leverage ratio is defined in the term loan agreement. As of June 30, 2017, our interest rate on the term loan was 8.66%.
The revolving credit agreement and the term loan agreement are collateralized by a pledge of substantially all of our assets and
contain certain financial covenants and customary events of default for such securities. Financial covenants include a fixed
charge coverage ratio, senior net leverage ratio and total leverage ratio. Additionally, the revolving credit agreement includes
minimum liquidity requirements. There is a blanket lien on all of our assets under the revolving credit agreement and term loan
agreement. As of June 30, 2017, and during fiscal 2018, we were in compliance with all covenants.
Debt Maturities
A summary of the scheduled maturities of principal for our outstanding debt as of June 30, 2017 follows (in thousands):
 
Debt Maturity Due by Period
 
Less than 1 Year
 
1 Year
 
2 Years
 
3 Years
 
4 Years
 
More than 5 Years
 
Total
4.50% convertible subordinated notes
$
63,090

 
$

 
$

 
$

 
$

 
$

 
$
63,090

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Long-term debt:
 
 
 
 
 
 
 
 
 
 
 
 
 
Revolving credit agreement

 

 

 

 
13,403

 

 
13,403

Term loan agreement
1,250

 
2,500

 
2,500

 
2,500

 
41,250

 

 
50,000

Total long-term debt
$
1,250

 
$
2,500

 
$
2,500

 
$
2,500

 
$
54,653

 
$

 
$
63,403

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total debt
$
64,340

 
$
2,500

 
$
2,500

 
$
2,500

 
$
54,653

 
$

 
$
126,493