Borrowings |
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Oct. 03, 2015 | |||||||||||||||||||||||||||||
| Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||
| Borrowings |
Borrowings
The Company maintains an asset-based revolving credit facility ("Credit Facility") that provides for, among other things, a revolving commitment in an aggregate principal amount of up to $25,000, which is subject to a borrowing base derived from certain receivables, inventory, and property and equipment. Upon satisfaction of certain conditions, the Company has the right to increase the revolving commitment to up to $40,000. The Company, to date, has not requested such an increase. The Credit Facility matures on April 26, 2017. At October 3, 2015, our outstanding revolving loan balance was $8,291. The customary events of default under the Credit Facility (discussed below) include certain subjective acceleration clauses. Management has determined the likelihood of an acceleration is more than remote, considering the recurring losses experienced by the Company. As a result, outstanding borrowings under the Credit Facility have been classified as a current liability.
On March 24, 2015, the Company and JPMorgan Chase Bank, N.A. (“JPMorgan”) entered into a Seventh Amendment to Credit Agreement and Second Amendment to Pledge and Security Agreement (the “Amendment”), which amended the Credit Agreement previously entered into by the Company, certain of its domestic subsidiaries and JPMorgan on April 26, 2012 (as amended, the “Credit Agreement”) and the Pledge and Security Agreement previously entered into by the Company, certain of its domestic subsidiaries and JPMorgan on April 26, 2012. Pursuant to the Amendment, the aggregate principal amount of indebtedness that is permitted related to capital leases was increased from $1,000 to $1,500.
Loans drawn under the Credit Facility bear interest, at the Company’s option, at a per annum rate equal to either (a) one month LIBOR plus an applicable margin of 2.25%, or (b) an “alternate prime base rate” plus an applicable margin of 0.25%. Subsequent to June 30, 2016, each applicable margin as set forth in the prior sentence is subject to reduction by up to 0.50% per annum based upon the Company’s fixed charge coverage ratio. At October 3, 2015, the Company’s LIBOR based interest rate was 2.50% (on $8,250 principal) and the Company’s prime based rate was 3.50% (on $41 principal). A commitment fee, based upon undrawn availability under the Credit Facility bearing interest at a rate of 0.25% per annum, is payable monthly. Under the terms of the Credit Agreement, cash receipts are deposited into a lock-box, which are at the Company’s discretion unless the “cash dominion period” is in effect, during which cash receipts will be used to reduce amounts owing under the Credit Agreement. The cash dominion period is triggered in an event of default or if excess availability is less than the $4,000 as defined, and will continue until, during the preceding 60 consecutive days, no event of default existed and excess availability has been greater than $5,000 at all times. Beginning on July 1, 2016, in the event that “excess availability,” as defined under the Credit Agreement, is less than $2,000 the Company shall be required to maintain a minimum fixed charge coverage ratio of 1.0 to 1.0.
The Company's excess availability, net of the "Availability Block" (as defined under the Credit Agreement) of $2,000 was $11,955 at October 3, 2015. As of the date hereof, the cash dominion period has not been in effect; accordingly, no principal payments are due.
As of October 3, 2015, the Company had total capital leases payable of $10,829. The present value of the net minimum payments on capital leases as of October 3, 2015 was as follows (in thousands):
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