Quarterly report pursuant to Section 13 or 15(d)

Note 6 - Long-term Debt

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Note 6 - Long-term Debt
6 Months Ended
Jun. 30, 2017
Notes to Financial Statements  
Long-term Debt [Text Block]
6.
Long Term Debt
 
Long-term debt consists of the following at
June 30, 2017
and
December 31, 2016:
 
(Amounts in Thousands)
 
June 30,
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 six months of 2017 was 4.4%.
(1)
  $
 
  $
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 six months
of 2017 was 4.4%.
(1) (2)
   
4,439
 (3)
   
5,030
 (3)
Total debt
   
4,439
 
   
8,833
 
Less current portion of long-term debt
   
1,184
 
   
1,184
 
Long-term debt
  $
3,255
 
  $
7,649
 
 
(
1
)
Our revolving credit facility is collateralized by our accounts receivable and our term loan is collateralized by our property 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 (
$133,000
) and (
$151,000
) at
June 30, 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 (
4.25%
at
June 30, 2017)
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.
 
At
June 30, 2017,
the availability under our revolving credit was
$3,302,000,
based on our eligible receivables and includes an indefinite reduction of borrowing availability of
$2,000,000
that the Company’s lender has imposed, which includes
$750,000
that was imposed immediately upon the Company’s receipt of finite risk sinking funds on
May 1, 2017,
in connection with the cancellation of the closure policy for the Company’s Perma-Fix Northwest Richland, Inc. (“PFNWR”) subsidiary (see “Note
8
– Commitments and Contingencies – Insurance” below 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
and
second
quarters of
2017
and expects to meet its quarterly financial covenants in each of the remaining quarters of
2017
and the
first
nine
months of
2018.