Quarterly report pursuant to Section 13 or 15(d)

Note 6 - Long-term Debt

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Note 6 - Long-term Debt
3 Months Ended
Mar. 31, 2017
Notes to Financial Statements  
Long-term Debt [Text Block]
6.
Long Term Debt
 
Long-term debt consists of the following at
March
31,
2017
and
December
31,
2016:
 
(Amounts in Thousands)
 
March 31, 2017
   
December 31, 2016
 
Revolving Credit
facility dated October 31, 2011, as amended, borrowings based upon eligible accounts receivable, subject to monthly borrowing base calculation, balance due March 24, 2021. Effective interest rate for the first quarter of 2017 was 3.9%.
(1)
  $
2,243
 
  $
3,803
 
Term Loan
dated October 31, 2011, as amended, payable in equal monthly installments of  principal of $102, balance due on March 24, 2021. Effective interest rate for first quarter of 2017 was 4.3%.
(1) (2)
   
4,735
(3)
   
5,030
(3)
Total debt
   
6,978
 
   
8,833
 
Less current portion of long-term debt
   
1,184
 
   
1,184
 
Long-term debt
  $
5,794
 
  $
7,649
 
 
(1)
Our revolving credit facility is collateralized by our accounts receivable and our term loan is collateralized by our property, plant, and equipment.
 
(2)
Prior to
April
1,
2016,
the monthly installment payment under the term loan was approximately
$190,000.
 
(3)
Net of debt issuance costs of
($142,000)
and
($151,000)
at
March
31,
2017
and
December
31,
2016,
respectively.
 
Revolving Credit and Term Loan
Agreement
The Company entered into an Amended and Restated Revolving Credit, Term Loan and Security Agreement, dated
October
31,
2011
(“Loan Agreement”), with PNC National Association (“PNC”), acting as agent and lender. The Loan Agreement, as subsequently amended (“Amended Loan Agreement”), provides the Company with the following credit facility with a maturity date of
March
24,
2021:
(a) up to
$12,000,000
revolving credit (“revolving credit”), subject to the amount of borrowings based on a percentage of eligible receivables (as defined) and (b) a term loan (“term loan”) of approximately
$6,100,000,
which requires monthly installments of approximately
$101,600
(based on a
seven
-year amortization).
 
Under the Amended Loan Agreement, the Company has the option of paying an annual rate of interest due on the revolving credit at prime plus
2%
or London Inter Bank Offer Rate (“LIBOR”) plus
3%
and the term loan at prime plus
2.5%
or LIBOR plus
3.5%.
 
Pursuant to the Amended Loan Agreement, the Company
may
terminate the Amended Loan Agreement, upon
90
days’ prior written notice upon payment in full of its obligations under the Amended Loan Agreement. The Company agreed to pay PNC
1.0%
of the total financing in the event the Company had paid off its obligations on or before
March
23,
2017,
.50%
of the total financing if the Company pays off its obligations after
March
23,
2017
but prior to or on
March
23,
2018,
and
.25%
of the total financing if the Company pays off its obligations after
March
23,
2018
but prior to or on
March
23,
2019.
No
early termination fee shall apply if the Company pays off its obligations after
March
23,
2019.
 
As of
March
31,
2017,
the availability under our revolving credit was
$2,350,000,
based on our eligible receivables and includes an indefinite reduction of borrowing availability of
$1,250,000
that our lender had previously imposed.
 
Pursuant to an amendment that the Company entered into with its lender on
November
17,
2016,
the lender included a “Condition Subsequent” in the amendment which requires the Company to receive restricted cash from a finite risk sinking fund in connection with its Perma-Fix Northwest Richland, Inc. (“PFNWR”) closure policy. Immediately upon the receipt of funds, the Company’s lender is to place another
$750,000
restriction on the Company’s borrowing availability resulting in a total of
$2,000,000
restriction on the Company’s borrowing availability (see “Note
9
– Commitments and Contingencies – Insurance” and “Note
14
– Subsequent Events – Closure Policy and Credit Facility” for further information of the PFNWR closure policy and the receipt of the related sinking funds).
 
The Company’s credit facility with PNC contains certain financial covenants, along with customary representations and warranties. A breach of any of these financial covenants, unless waived by PNC, could result in a default under our credit facility allowing our lender to immediately require the repayment of all outstanding debt under our credit facility and terminate all commitments to extend further credit. The Company met its quarterly financial covenants in the
first
quarter of
2017
and expects to meet its quarterly financial covenants in each of the remaining quarters of
2017
and beyond.