☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Large accelerated filer | ☐ | Accelerated filer | ☒ | |||
Non-accelerated filer | ☐ | Smaller reporting company | ☒ | |||
Emerging growth company | ☐ |
EXPLANATORY NOTE
Page No. | ||||||
Part I. | ||||||
Item 1. | ||||||
3 | ||||||
4 | ||||||
5 | ||||||
6 | ||||||
7 | ||||||
Item 2. | ||||||
Item 3. | ||||||
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| 31 | |||||
Item | 31 | |||||
Part II. | ||||||
Item 1. | 32 | |||||
Item 1A. | 32-33 | |||||
Item 2. | ||||||
| 33 | |||||
Item | 33 | |||||
Item 6. | 34 | |||||
35 |
Item 1. | Financial Statements |
May 2, 2020 | January 31, 2020 | |||||||
(Unaudited) | ||||||||
ASSETS | ||||||||
CURRENT ASSETS | ||||||||
Cash and Cash Equivalents | $ | 11,091 | $ | 4,249 | ||||
Accounts Receivable, net | 18,473 | 19,784 | ||||||
Inventories, net | 32,557 | 33,925 | ||||||
Prepaid Expenses and Other Current Assets | 2,489 | 2,193 | ||||||
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Total Current Assets | 64,610 | 60,151 | ||||||
Property, Plant and Equipment, net | 11,377 | 11,268 | ||||||
Intangible Assets, net | 24,328 | 25,383 | ||||||
Goodwill | 11,988 | 12,034 | ||||||
Deferred Tax Assets, net | 5,073 | 5,079 | ||||||
Right of Use Assets | 1,553 | 1,661 | ||||||
Other Assets | 1,071 | 1,088 | ||||||
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TOTAL ASSETS | $ | 120,000 | $ | 116,664 | ||||
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LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
CURRENT LIABILITIES | ||||||||
Accounts Payable | $ | 4,282 | $ | 4,409 | ||||
Accrued Compensation | 2,893 | 2,700 | ||||||
Other Accrued Expenses | 3,697 | 4,711 | ||||||
Revolving Credit Facility | 11,500 | 6,500 | ||||||
Current Portion of Long-Term Debt | 6,602 | 5,208 | ||||||
Current Liability – Royalty Obligation | 2,000 | 2,000 | ||||||
Current Liability – Excess Royalty Payment Due | 586 | 773 | ||||||
Deferred Revenue | 375 | 466 | ||||||
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Total Current Liabilities | 31,935 | 26,767 | ||||||
Long-Term Debt, net of current portion | 6,334 | 7,715 | ||||||
Royalty Obligation, net of current portion | 7,550 | 8,012 | ||||||
Lease Liabilities, net of current portion | 1,199 | 1,279 | ||||||
Deferred Tax Liabilities | 378 | 435 | ||||||
Other Long-Term Liabilities | 1,042 | 1,081 | ||||||
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TOTAL LIABILITIES | 48,438 | 45,289 | ||||||
SHAREHOLDERS’ EQUITY | ||||||||
Common Stock, $0.05 Par Value, Authorized 13,000,000 shares; Issued 10,371,704 shares and 10,343,610 shares at May 2, 2020 and January 31, 2020, respectively | 518 | 517 | ||||||
AdditionalPaid-in Capital | 56,656 | 56,130 | ||||||
Retained Earnings | 49,233 | 49,298 | ||||||
Treasury Stock, at Cost, 3,287,271 and 3,281,701 shares at May 2, 2020 and January 31, 2020, respectively | (33,531 | ) | (33,477 | ) | ||||
Accumulated Other Comprehensive Loss, net of tax | (1,314 | ) | (1,093 | ) | ||||
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TOTAL SHAREHOLDERS’ EQUITY | 71,562 | 71,375 | ||||||
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TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 120,000 | $ | 116,664 | ||||
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October 31, 2020 | January 31, 2020 | |||||||
(Unaudited) | ||||||||
ASSETS | ||||||||
CURRENT ASSETS | ||||||||
Cash and Cash Equivalents | $ | 9,603 | $ | 4,249 | ||||
Accounts Receivable, net | 15,662 | 19,784 | ||||||
Inventories, net | 30,868 | 33,925 | ||||||
Prepaid Expenses and Other Current Assets | 2,769 | 2,193 | ||||||
Total Current Assets | 58,902 | 60,151 | ||||||
Property, Plant and Equipment, net | 11,944 | 11,268 | ||||||
Intangible Assets, net | 22,413 | 25,383 | ||||||
Goodwill | 12,466 | 12,034 | ||||||
Deferred Tax Assets | 5,099 | 5,079 | ||||||
Right of Use Assets | 1,436 | 1,661 | ||||||
Other Assets | 1,049 | 1,088 | ||||||
TOTAL ASSETS | $ | 113,309 | $ | 116,664 | ||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
CURRENT LIABILITIES | ||||||||
Accounts Payable | $ | 4,825 | $ | 4,409 | ||||
Accrued Compensation | 2,749 | 2,700 | ||||||
Other Liabilities and Accrued Expenses | 3,481 | 4,711 | ||||||
Current Portion of Long-Term Debt | 4,984 | 5,208 | ||||||
Revolving Credit Facility | — | 6,500 | ||||||
Current Liability – Royalty Obligation | 2,000 | 2,000 | ||||||
Current Liability – Excess Royalty Payment Due | 147 | 773 | ||||||
Deferred Revenue | 313 | 466 | ||||||
Total Current Liabilities | 18,499 | 26,767 | ||||||
Long-Term Debt, net of current portion | 8,488 | 7,715 | ||||||
Royalty Obligation, net of current portion | 6,624 | 8,012 | ||||||
Long-Term Debt – PPP Loan | 4,422 | — | ||||||
Lease Liabilities, net of current portion | 1,105 | 1,279 | ||||||
Other Long-Term Liabilities | 657 | 1,081 | ||||||
Deferred Tax Liabilities | 476 | 435 | ||||||
TOTAL LIABILITIES | 40,271 | 45,289 | ||||||
SHAREHOLDERS’ EQUITY | ||||||||
Common Stock, $0.05 Par Value, Authorized 13,000,000 shares; Issued 10,416,724 shares and 10,343,610 shares at October 31, 2020 and January 31, 2020, respectively | 521 | 517 | ||||||
Additional Paid-in Capital | 57,894 | 56,130 | ||||||
Retained Earnings | 49,248 | 49,298 | ||||||
Treasury Stock, at Cost, 3,295,188 and 3,281,701 shares at October 31, 2020 and January 31, 2020, respectively | (33,568 | ) | (33,477 | ) | ||||
Accumulated Other Comprehensive Loss, net of tax | (1,057 | ) | (1,093 | ) | ||||
TOTAL SHAREHOLDERS’ EQUITY | 73,038 | 71,375 | ||||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 113,309 | $ | 116,664 | ||||
Three Months Ended | ||||||||
May 2, 2020 | May 4, 2019 | |||||||
Revenue | $ | 30,919 | $ | 36,181 | ||||
Cost of Revenue | 20,064 | 21,942 | ||||||
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Gross Profit | 10,855 | 14,239 | ||||||
Operating Expenses: | ||||||||
Selling and Marketing | 5,925 | 6,765 | ||||||
Research and Development | 1,940 | 2,007 | ||||||
General and Administrative | 2,327 | 2,999 | ||||||
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Operating Expenses | 10,192 | 11,771 | ||||||
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Operating Income | 663 | 2,468 | ||||||
Other Expense, net | (349 | ) | (368 | ) | ||||
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Income Before Income Taxes | 314 | 2,100 | ||||||
Income Tax (Benefit) Provision | (118 | ) | 400 | |||||
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Net Income | $ | 432 | $ | 1,700 | ||||
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Net Income Per Common Share—Basic: | $ | 0.06 | $ | 0.24 | ||||
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Net Income Per Common Share—Diluted: | $ | 0.06 | $ | 0.23 | ||||
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Weighted Average Number of Common Shares Outstanding: | ||||||||
Basic | 7,073 | 6,971 | ||||||
Diluted | 7,105 | 7,248 |
Three Months Ended | Nine Months Ended | |||||||||||||||
October 31, 2020 | November 2, 2019 | October 31, 2020 | November 2, 2019 | |||||||||||||
Revenue | $ | 28,017 | $ | 33,318 | $ | 86,595 | $ | 102,967 | ||||||||
Cost of Revenue | 18,282 | 21,021 | 56,218 | 64,454 | ||||||||||||
Gross Profit | 9,735 | 12,297 | 30,377 | 38,513 | ||||||||||||
Operating Expenses: | ||||||||||||||||
Selling and Marketing | 5,553 | 6,944 | 17,033 | 20,122 | ||||||||||||
Research and Development | 1,412 | 2,076 | 4,845 | 5,868 | ||||||||||||
General and Administrative | 2,353 | 2,830 | 7,214 | 8,445 | ||||||||||||
Operating Expenses | 9,318 | 11,850 | 29,092 | 34,435 | ||||||||||||
Operating Income | 417 | 447 | 1,285 | 4,078 | ||||||||||||
Other Expense, net | (437 | ) | (238 | ) | (459 | ) | (788 | ) | ||||||||
Income (Loss) Before Income Taxes | (20 | ) | 209 | 826 | 3,290 | |||||||||||
Income Tax (Benefit) Provision | (32 | ) | (247 | ) | 379 | 182 | ||||||||||
Net Income | $ | 12 | $ | 456 | $ | 447 | $ | 3,108 | ||||||||
Net Income per Common Share - Basic: | $ | 0.00 | $ | 0.06 | $ | 0.06 | $ | 0.44 | ||||||||
Net Income per Common Share - Diluted: | $ | 0.00 | $ | 0.06 | $ | 0.06 | $ | 0.43 | ||||||||
Weighted Average Number of Common Shares Outstanding: | ||||||||||||||||
Basic | 7,120 | 7,047 | 7,100 | 7,013 | ||||||||||||
Diluted | 7,185 | 7,199 | 7,137 | 7,272 |
Three Months Ended | ||||||||
May 2, 2020 | May 4, 2019 | |||||||
Net Income | $ | 432 | $ | 1,700 | ||||
Other Comprehensive Loss, Net of Taxes | ||||||||
Foreign Currency Translation Adjustments | (142 | ) | (172 | ) | ||||
Change in Value of Derivatives Designated as Cash Flow Hedge | (46 | ) | 116 | |||||
(Gains) Losses from Cash Flow Hedges Reclassified to Income Statement | (33 | ) | (144 | ) | ||||
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Other Comprehensive Loss | (221 | ) | (200 | ) | ||||
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Comprehensive Income | $ | 211 | $ | 1,500 | ||||
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Three Months Ended | Nine Months Ended | |||||||||||||||
October 31, 2020 | November 2, 2019 | October 31, 2020 | November 2, 2019 | |||||||||||||
Net Income | $ | 12 | $ | 456 | $ | 447 | $ | 3,108 | ||||||||
Other Comprehensive Income (Loss), Net of Taxes: | ||||||||||||||||
Foreign Currency Translation Adjustments | (157 | ) | 87 | 53 | (166 | ) | ||||||||||
Change in Value of Derivatives Designated as Cash Flow Hedge | 15 | 62 | (255 | ) | 62 | |||||||||||
Losses (Gains) from Cash Flow Hedges Reclassified to Income Statement | — | 3 | 193 | (201 | ) | |||||||||||
Cross-Currency Interest Rate Swap Termination | — | — | 45 | — | ||||||||||||
Other Comprehensive Income (Loss) | (142 | ) | 152 | 36 | (305 | ) | ||||||||||
Comprehensive Income (Loss) | $ | (130 | ) | $ | 608 | $ | 483 | $ | 2,803 | |||||||
Common Stock | Additional Paid-in Capital | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Income (Loss) | Total Shareholders’ Equity | |||||||||||||||||||||||
Shares | Amount | |||||||||||||||||||||||||||
Balance February 1, 2019 | 10,218,559 | $ | 511 | $ | 53,568 | $ | 49,511 | $ | (32,997 | ) | $ | (818 | ) | $ | 69,775 | |||||||||||||
Share-Based Compensation | — | — | 601 | — | — | — | 601 | |||||||||||||||||||||
Employee Option Exercises | 27,990 | 1 | 306 | — | (11 | ) | — | 296 | ||||||||||||||||||||
Restricted Stock Awards Vested, net | 9,522 | 1 | (1 | ) | — | (69 | ) | — | (69 | ) | ||||||||||||||||||
Cash Dividend—$0.07 per share | — | — | — | (489 | ) | — | — | (489 | ) | |||||||||||||||||||
Net Income | — | — | — | 1,700 | — | — | 1,700 | |||||||||||||||||||||
Other Comprehensive Loss | — | — | — | — | — | (200 | ) | (200 | ) | |||||||||||||||||||
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Balance May 4, 2019 | 10,256,071 | $ | 513 | $ | 54,474 | $ | 50,722 | $ | (33,077 | ) | $ | (1,018 | ) | $ | 71,614 | |||||||||||||
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Common Stock | Additional Paid-in Capital | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Income (Loss) | Total Shareholders’ Equity | |||||||||||||||||||||||
Shares | Amount | |||||||||||||||||||||||||||
Balance February 1, 2020 | 10,343,610 | $ | 517 | $ | 56,130 | $ | 49,298 | $ | (33,477 | ) | $ | (1,093 | ) | $ | 71,375 | |||||||||||||
Share-Based Compensation | — | — | 495 | — | — | — | 495 | |||||||||||||||||||||
Employee Option Exercises | 4,456 | — | 32 | — | — | — | 32 | |||||||||||||||||||||
Restricted Stock Awards Vested, net | 23,638 | 1 | (1 | ) | — | (54 | ) | — | (54 | ) | ||||||||||||||||||
Cash Dividend—$0.07 per share | — | — | — | (497 | ) | — | — | (497 | ) | |||||||||||||||||||
Net Income | — | — | — | 432 | — | — | 432 | |||||||||||||||||||||
Other Comprehensive Loss | — | — | — | — | — | (221 | ) | (221 | ) | |||||||||||||||||||
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Balance May 2, 2020 | 10,371,704 | $ | 518 | $ | 56,656 | $ | 49,233 | $ | (33,531 | ) | $ | (1,314 | ) | $ | 71,562 | |||||||||||||
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Common Stock | Additional Paid-in Capital | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Income (Loss) | Total Shareholders’ Equity | |||||||||||||||||||||||
Shares | Amount | |||||||||||||||||||||||||||
Balance February 1, 2020 | 10,343,610 | $ | 517 | $ | 56,130 | $ | 49,298 | $ | (33,477 | ) | $ | (1,093 | ) | $ | 71,375 | |||||||||||||
Share-Based Compensation | — | — | 495 | — | — | — | 495 | |||||||||||||||||||||
Employee Option Exercises | 4,456 | — | 32 | — | — | — | 32 | |||||||||||||||||||||
Restricted Stock Awards Vested, net | 23,638 | 1 | (1 | ) | — | (54 | ) | — | (54 | ) | ||||||||||||||||||
Common Stock – Cash Dividend - $0.07 per share | — | — | — | (497 | ) | — | — | (497 | ) | |||||||||||||||||||
Net Income | — | — | — | 432 | — | — | 432 | |||||||||||||||||||||
Other Comprehensive Loss | — | — | — | — | — | (221 | ) | (221 | ) | |||||||||||||||||||
Balance May 2, 2020 | 10,371,704 | $ | 518 | $ | 56,656 | $ | 49,233 | $ | (33,531 | ) | $ | (1,314 | ) | $ | 71,562 | |||||||||||||
Share-Based Compensation | — | — | 601 | — | — | — | 601 | |||||||||||||||||||||
Employee Option Exercises | 4,874 | — | 29 | — | — | — | 29 | |||||||||||||||||||||
Restricted Stock Awards Vested, net | 35,676 | 2 | (2 | ) | — | (37 | ) | — | (37 | ) | ||||||||||||||||||
Net Income | — | — | — | 3 | — | — | 3 | |||||||||||||||||||||
Other Comprehensive Income | — | — | — | — | — | 399 | 399 | |||||||||||||||||||||
Balance August 1, 2020 | 10,412,254 | $ | 520 | $ | 57,284 | $ | 49,236 | $ | (33,568 | ) | $ | (915 | ) | $ | 72,557 | |||||||||||||
Share-Based Compensation | — | — | 591 | — | — | — | 591 | |||||||||||||||||||||
Employee Option Exercises | 4,037 | 1 | 19 | — | — | — | 20 | |||||||||||||||||||||
Restricted Stock Awards Vested, net | 433 | — | — | — | — | — | — | |||||||||||||||||||||
Net Income | — | — | — | 12 | — | — | 12 | |||||||||||||||||||||
Other Comprehensive (Loss) | — | — | — | — | — | (142 | ) | (142 | ) | |||||||||||||||||||
Balance October 31, 2020 | 10,416,724 | $ | 521 | $ | 57,894 | $ | 49,248 | $ | (33,568 | ) | $ | (1,057 | ) | $ | 73,038 | |||||||||||||
Common Stock | Additional Paid-in Capital | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Income (Loss) | Total Shareholders’ Equity | |||||||||||||||||||||||
Shares | Amount | |||||||||||||||||||||||||||
Balance February 1, 2019 | 10,218,559 | $ | 511 | $ | 53,568 | $ | 49,511 | $ | (32,997 | ) | $ | (818 | ) | $ | 69,775 | |||||||||||||
Share-Based Compensation | — | — | 601 | — | — | — | 601 | |||||||||||||||||||||
Employee Option Exercises | 27,990 | 1 | 306 | — | (11 | ) | — | 296 | ||||||||||||||||||||
Restricted Stock Awards Vested, net | 9,522 | 1 | (1 | ) | — | (69 | ) | — | (69 | ) | ||||||||||||||||||
Common Stock – Cash Dividend - $ 0.07 per share | — | — | — | (489 | ) | — | — | (489 | ) | |||||||||||||||||||
Net Income | — | — | — | 1,700 | — | — | 1,700 | |||||||||||||||||||||
Other Comprehensive Loss | — | — | — | — | — | (200 | ) | (200 | ) | |||||||||||||||||||
Balance May 4, 2019 | 10,256,071 | $ | 513 | $ | 54,474 | $ | 50,722 | $ | (33,077 | ) | $ | (1,018 | ) | $ | 71,614 | |||||||||||||
Share-Based Compensation | — | — | 451 | — | — | — | 451 | |||||||||||||||||||||
Employee Option Exercises | 13,821 | 1 | 198 | — | 0 | — | 199 | |||||||||||||||||||||
Restricted Stock Awards Vested, net | 45,658 | 2 | (2 | ) | — | (377 | ) | — | (377 | ) | ||||||||||||||||||
Common Stock – Cash Dividend - $0.07 per share | — | — | — | (493 | ) | — | — | (493 | ) | |||||||||||||||||||
Net Income | — | — | — | 951 | — | — | 951 | |||||||||||||||||||||
Other Comprehensive Loss | — | — | — | — | — | (257 | ) | (257 | ) | |||||||||||||||||||
Balance August 3, 2019 | 10,315,550 | $ | 516 | $ | 55,121 | $ | 51,180 | $ | (33,454 | ) | $ | (1,275 | ) | $ | 72,088 | |||||||||||||
Share-Based Compensation | — | — | 525 | — | — | — | 525 | |||||||||||||||||||||
Employee Option Exercises | 18,365 | 2 | 224 | — | — | — | 226 | |||||||||||||||||||||
Cash Dividend—$0.07 per share | — | — | — | (494 | ) | — | — | (494 | ) | |||||||||||||||||||
Net Income | — | — | — | 456 | — | — | 456 | |||||||||||||||||||||
Other Comprehensive Income | — | — | — | — | — | 152 | 152 | |||||||||||||||||||||
Balance November 2, 2019 | 10,333,915 | $ | 518 | $ | 55,870 | $ | 51,142 | $ | (33,454 | ) | $ | (1,123 | ) | $ | 72,953 | |||||||||||||
Three Months Ended | ||||||||
May 2, 2020 | May 4, 2019 | |||||||
Cash Flows from Operating Activities: | ||||||||
Net Income | $ | 432 | $ | 1,700 | ||||
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: | ||||||||
Depreciation and Amortization | 1,568 | 1,584 | ||||||
Amortization of Debt Issuance Costs | 12 | 13 | ||||||
Share-Based Compensation | 495 | 601 | ||||||
Changes in Assets and Liabilities: | ||||||||
Accounts Receivable | 1,220 | 1,439 | ||||||
Inventories | 1,237 | (2,001 | ) | |||||
Income Taxes | (90 | ) | 263 | |||||
Accounts Payable and Accrued Expenses | (1,140 | ) | (2,796 | ) | ||||
Other | (314 | ) | 184 | |||||
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Net Cash Provided by Operating Activities | 3,420 | 987 | ||||||
Cash Flows from Investing Activities: | ||||||||
Additions to Property, Plant and Equipment | (626 | ) | (586 | ) | ||||
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Net Cash Used by Investing Activities | (626 | ) | (586 | ) | ||||
Cash Flows from Financing Activities: | ||||||||
Net Cash Proceeds from Employee Stock Option Plans | 6 | 270 | ||||||
Net Cash Proceeds from Share Purchases under Employee Stock Purchase Plan | 26 | 26 | ||||||
Net Cash Used for Payment of Taxes Related to Vested Restricted Stock | (54 | ) | (69 | ) | ||||
Borrowings under Revolving Credit Facility | 5,000 | — | ||||||
Payment of Minimum Guarantee Royalty Obligation | (500 | ) | (375 | ) | ||||
Principal Payments of Long-Term Debt | — | (1,578 | ) | |||||
Dividends Paid | (497 | ) | (489 | ) | ||||
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Net Cash Provided (Used) by Financing Activities | 3,981 | (2,215 | ) | |||||
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Effect of Exchange Rate Changes on Cash and Cash Equivalents | 67 | 49 | ||||||
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Net Increase (Decrease) in Cash and Cash Equivalents | 6,842 | (1,765 | ) | |||||
Cash and Cash Equivalents, Beginning of Period | 4,249 | 7,534 | ||||||
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Cash and Cash Equivalents, End of Period | $ | 11,091 | $ | 5,769 | ||||
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Supplemental Disclosures of Cash Flow Information: | ||||||||
Cash Paid During the Period for Interest | $ | 124 | $ | 110 | ||||
Cash Paid During the Period for Income Taxes, Net of Refunds | $ | 128 | $ | 142 | ||||
Schedule ofNon-Cash Financing Activities: | ||||||||
Value of Shares Received in Satisfaction of Option Exercise Price | $ | — | $ | 11 |
Nine Months Ended | ||||||||
October 31, 2020 | November 2, 2019 | |||||||
Cash Flows from Operating Activities: | ||||||||
Net Income | $ | 447 | $ | 3,108 | ||||
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: | ||||||||
Depreciation and Amortization | 4,571 | 4,692 | ||||||
Amortization of Debt Issuance Costs | 48 | 37 | ||||||
Share-Based Compensation | 1,687 | 1,576 | ||||||
Changes in Assets and Liabilities: | ||||||||
Accounts Receivable | 4,248 | 1,296 | ||||||
Inventories | 3,252 | (5,412 | ) | |||||
Income Taxes | 115 | (2,639 | ) | |||||
Accounts Payable and Accrued Expenses | (1,488 | ) | (1,586 | ) | ||||
Other | (1,213 | ) | (84 | ) | ||||
Net Cash Provided by Operating Activities | 11,667 | 988 | ||||||
Cash Flows from Investing Activities: | ||||||||
Additions to Property, Plant and Equipment | (2,102 | ) | (2,422 | ) | ||||
Net Cash Used for Investing Activities | (2,102 | ) | (2,422 | ) | ||||
Cash Flows from Financing Activities: | ||||||||
Net Cash Proceeds from Employee Stock Option Plans | 6 | 633 | ||||||
Net Cash Proceeds from Share Purchases under Employee Stock Purchase Plan | 75 | 88 | ||||||
Net Cash Used for Payment of Taxes Related to Vested Restricted Stock | (91 | ) | (445 | ) | ||||
Borrowings under Revolving Credit Facility | 5,000 | 5,000 | ||||||
Repayment under Revolving Credit Facility | (11,500 | ) | — | |||||
Payment of Minimum Guarantee Royalty Obligation | (1,500 | ) | (1,375 | ) | ||||
Proceeds from Long-Term Debt – PPP Loan | 4,422 | — | ||||||
Proceeds from Long-Term Debt Borrowings | 15,232 | — | ||||||
Payoff of Long-Term Debt | (11,732 | ) | — | |||||
Principal Payments of Long-Term Debt | (2,906 | ) | (3,998 | ) | ||||
Payment of Debt Issuance Costs | (89 | ) | — | |||||
Dividends Paid | (497 | ) | (1,477 | ) | ||||
Net Cash Used for Financing Activities | (3,580 | ) | (1,574 | ) | ||||
Effect of Exchange Rate Changes on Cash and Cash Equivalents | (631 | ) | (58 | ) | ||||
Net Increase (Decrease) in Cash and Cash Equivalents | 5,354 | (3,066 | ) | |||||
Cash and Cash Equivalents, Beginning of Period | 4,249 | 7,534 | ||||||
Cash and Cash Equivalents, End of Period | $ | 9,603 | $ | 4,468 | ||||
Supplemental Disclosures of Cash Flow Information: | ||||||||
Cash Paid During the Period for Interest | $ | 517 | $ | 350 | ||||
Cash Paid During the Period for Income Taxes, Net of Refunds | $ | 250 | $ | 2,746 | ||||
Schedule of Non-Cash Financing Activities: | ||||||||
Value of Shares Received in Satisfaction of Option Exercise Price | $ | — | $ | 11 |
Three Months Ended | ||||||||
(In thousands) | May 2, 2020 | May 4, 2019 | ||||||
United States | $ | 19,789 | $ | 21,992 | ||||
Europe | 7,450 | 7,875 | ||||||
Canada | 1,428 | 1,516 | ||||||
Asia | 1,009 | 3,450 | ||||||
Central and South America | 954 | 888 | ||||||
Other | 289 | 460 | ||||||
|
|
|
| |||||
Total Revenue | $ | 30,919 | $ | 36,181 | ||||
|
|
|
|
Three Months Ended | Nine Months Ended | |||||||||||||||
(In thousands) | October 31, 2020 | November 2, 2019 | October 31, 2020 | November 2, 2019 | ||||||||||||
United States | $ | 16,788 | $ | 21,831 | $ | 54,442 | $ | 64,471 | ||||||||
Europe | 7,081 | 7,059 | 20,845 | 22,408 | ||||||||||||
Canada | 1,273 | 1,441 | 4,154 | 4,346 | ||||||||||||
Central and South America | 1,233 | 1,019 | 3,101 | 3,232 | ||||||||||||
Asia | 1,209 | 1,396 | 3,050 | 7,063 | ||||||||||||
Other | 433 | 572 | 1,003 | 1,447 | ||||||||||||
Total Revenue | $ | 28,017 | $ | 33,318 | $ | 86,595 | $ | 102,967 | ||||||||
Three Months Ended | ||||||||
(In thousands) | May 2, 2020 | May 4, 2019 | ||||||
Hardware | $ | 8,914 | $ | 12,918 | ||||
Supplies | 19,118 | 19,727 | ||||||
Service and Other | 2,887 | 3,536 | ||||||
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|
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| |||||
Total Revenue | $ | 30,919 | $ | 36,181 | ||||
|
|
|
|
Three Months Ended | Nine Months Ended | |||||||||||||||
(In thousands) | October 31, 2020 | November 2, 2019 | October 31, 2020 | November 2, 2019 | ||||||||||||
Hardware | $ | 7,667 | $ | 12,160 | $ | 25,021 | $ | 37,514 | ||||||||
Supplies | 17,996 | 17,655 | 54,254 | 55,463 | ||||||||||||
Service and Other | 2,354 | 3,503 | 7,320 | 9,990 | ||||||||||||
Total Revenue | $ | 28,017 | $ | 33,318 | $ | 86,595 | $ | 102,967 | ||||||||
2020 and
Three Months Ended | ||||||||
May 2, 2020 | May 4, 2019 | |||||||
Weighted Average Common Shares Outstanding – Basic | 7,073,278 | 6,970,914 | ||||||
Effect of Dilutive Options, Restricted Stock Awards and Restricted Stock Units | 31,365 | 277,412 | ||||||
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|
| |||||
Weighted Average Common Shares Outstanding – Diluted | 7,104,643 | 7,248,326 | ||||||
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|
Three Months Ended | Nine Months Ended | |||||||||||||||
October 31, 2020 | November 2, 2019 | October 31, 2020 | November 2, 2019 | |||||||||||||
Weighted Average Common Shares Outstanding – Basic | 7,120,286 | 7,046,803 | 7,099,505 | 7,012,595 | ||||||||||||
Effect of Dilutive Options, Restricted Stock Awards and Restricted Stock Units | 65,199 | 151,795 | 37,973 | 259,840 | ||||||||||||
Weighted Average Common Shares Outstanding – Diluted | 7,185,485 | 7,198,598 | 7,137,478 | 7,272,435 | ||||||||||||
May 2, 2020 | January 31, 2020 | |||||||||||||||||||||||||||||||
(In thousands) | Gross Carrying Amount | Accumulated Amortization | Currency Translation Adjustment | Net Carrying Amount | Gross Carrying Amount | Accumulated Amortization | Currency Translation Adjustment | Net Carrying Amount | ||||||||||||||||||||||||
Miltope: | ||||||||||||||||||||||||||||||||
Customer Contract Relationships | $ | 3,100 | $ | (2,098 | ) | $ | — | $ | 1,002 | $ | 3,100 | $ | (2,021 | ) | $ | — | $ | 1,079 | ||||||||||||||
RITEC: | ||||||||||||||||||||||||||||||||
Customer Contract Relationships | 2,830 | (1,156 | ) | — | 1,674 | 2,830 | (1,076 | ) | — | 1,754 | ||||||||||||||||||||||
Non-Competition Agreement | 950 | (918 | ) | — | 32 | 950 | (871 | ) | — | 79 | ||||||||||||||||||||||
TrojanLabel: | ||||||||||||||||||||||||||||||||
Existing Technology | 2,327 | (1,136 | ) | 68 | 1,259 | 2,327 | (1,053 | ) | 78 | 1,352 | ||||||||||||||||||||||
Distributor Relations | 937 | (320 | ) | 22 | 639 | 937 | (297 | ) | 27 | 667 | ||||||||||||||||||||||
Honeywell: | ||||||||||||||||||||||||||||||||
Customer Contract Relationships | 27,243 | (7,521 | ) | — | 19,722 | 27,243 | (6,791 | ) | — | 20,452 | ||||||||||||||||||||||
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| |||||||||||||||||
Intangible Assets, net | $ | 37,387 | $ | (13,149 | ) | $ | 90 | $ | 24,328 | $ | 37,387 | $ | (12,109 | ) | $ | 105 | $ | 25,383 | ||||||||||||||
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|
|
October 31, 2020 | January 31, 2020 | |||||||||||||||||||||||||||||||
(In thousands) | Gross Carrying Amount | Accumulated Amortization | Currency Translation Adjustment | Net Carrying Amount | Gross Carrying Amount | Accumulated Amortization | Currency Translation Adjustment | Net Carrying Amount | ||||||||||||||||||||||||
Miltope: | ||||||||||||||||||||||||||||||||
Customer Contract Relationships | $ | 3,100 | $ | (2,253 | ) | $ | — | $ | 847 | $ | 3,100 | $ | (2,021 | ) | $ | — | $ | 1,079 | ||||||||||||||
RITEC: | ||||||||||||||||||||||||||||||||
Customer Contract Relationships | 2,830 | (1,316 | ) | — | 1,514 | 2,830 | (1,076 | ) | — | 1,754 | ||||||||||||||||||||||
Non-Competition Agreement | 950 | (950 | ) | — | — | 950 | (871 | ) | — | 79 | ||||||||||||||||||||||
TrojanLabel: | ||||||||||||||||||||||||||||||||
Existing Technology | 2,327 | (1,313 | ) | 147 | 1,161 | 2,327 | (1,053 | ) | 78 | 1,352 | ||||||||||||||||||||||
Distributor Relations | 937 | (370 | ) | 63 | 630 | 937 | (297 | ) | 27 | 667 | ||||||||||||||||||||||
Honeywell: | ||||||||||||||||||||||||||||||||
Customer Contract Relationships | 27,243 | (8,982 | ) | — | 18,261 | 27,243 | (6,791 | ) | — | 20,452 | ||||||||||||||||||||||
Intangible Assets, net | $ | 37,387 | $ | (15,184 | ) | $ | 210 | $ | 22,413 | $ | 37,387 | $ | (12,109 | ) | $ | 105 | $ | 25,383 | ||||||||||||||
Amortization expense of $3.1 million and $3.2 million related to the above acquired intangibles has been included in the accompanying condensed consolidated statement of income for the nine months ended October 31, 2020 and November 2, 2019, respectively.
(In thousands) | Remaining 2021 | 2022 | 2023 | 2024 | 2025 | |||||||||||||||
Estimated amortization expense | $ | 3,018 | $ | 3,964 | $ | 3,957 | $ | 3,960 | $ | 3,392 |
(In thousands) | Remaining 2021 | 2022 | 2023 | 2024 | 2025 | |||||||||||||||
Estimated amortization expense | $ | 999 | $ | 3,979 | $ | 3,972 | $ | 3,975 | $ | 3,395 |
(In thousands) | May 2, 2020 | January 31, 2020 | ||||||
Materials and Supplies | $ | 20,793 | $ | 20,151 | ||||
Work-In-Process | 1,684 | 1,408 | ||||||
Finished Goods | 16,781 | 17,992 | ||||||
|
|
|
| |||||
39,258 | 39,551 | |||||||
Inventory Reserve | (6,701 | ) | (5,626 | ) | ||||
|
|
|
| |||||
$ | 32,557 | $ | 33,925 | |||||
|
|
|
|
(In thousands) | October 31, 2020 | January 31, 2020 | ||||||
Materials and Supplies | $ | 21,058 | $ | 20,151 | ||||
Work-In-Process | 1,631 | 1,408 | ||||||
Finished Goods | 16,464 | 17,992 | ||||||
39,153 | 39,551 | |||||||
Inventory Reserve | (8,285 | ) | (5,626 | ) | ||||
$ | 30,868 | $ | 33,925 | |||||
At May 2, Agreement and Debt
At May 2, 2020, $11.5 million was drawn on the revolving line of credit. The outstanding balance bears interest at a weighted average annual rate of 2.52% and $73,000 and $19,000 of interest has been incurred on this obligation and included in other expense in the accompanying condensed consolidated income statement for the three-month periods ended May 2, 2020 and May 4, 2019, respectively. At May 2, 2020, there was $6.0 million available for borrowing under the revolving credit facility. Pursuant to the terms of the Fourth Amendment to our Credit Agreement, which we and Bank of America entered into in December 2019, the aggregate amount available for borrowings under the revolving line of credit will decrease to $10.0 million at the end of the third quarter of fiscal year 2021.
We are also required to pay a commitment fee on the undrawn portion of the revolving credit facility atthat varies within a range of 0.25% and 0.675% based on our consolidated leverage ratio.
See Note 17–Subsequent Events–Letter Agreementproperty, (b) net cash proceeds from certain issuances of equity, (c) net cash proceeds from certain issuances of additional debt and (d) net cash proceeds from certain extraordinary receipts.
intomust comply with Bankvarious customary financial and
Note 8 –our owned real property in West Warwick, Rhode Isla
(In thousands) | May 2, 2020 | January 31, 2020 | ||||||
USD Term Loan (2.24% as of May 2, 2020 and 3.03% as of January 31, 2020); maturity date of November 30, 2022 | $ | 8,250 | $ | 8,250 | ||||
USD Term Loan (2.24% as of May 2, 2020 and 3.03% as of January 31, 2020); maturity date of January 31, 2022 | 4,784 | 4,784 | ||||||
|
|
|
| |||||
$ | 13,034 | $ | 13,034 | |||||
Debt Issuance Costs, net of accumulated amortization | (98 | ) | (111 | ) | ||||
Current Portion of Term Loans | (6,602 | ) | (5,208 | ) | ||||
|
|
|
| |||||
Long-Term Debt | $ | 6,334 | $ | 7,715 | ||||
|
|
|
|
(In thousands) | October 31, 2020 | January 31, 2020 | ||||||
USD Term Loan (3.80% as of October 31, 2020); maturity date of June 15, 2022) | $ | 13,628 | $ | — | ||||
USD Term Loan (3.03% as of January 31, 2020) | — | 8,250 | ||||||
USD Term Loan (3.03% as of January 31, 2020) | — | 4,784 | ||||||
$ | 13,628 | $ | 13,034 | |||||
Debt Issuance Costs, net of accumulated amortization | (156 | ) | (111 | ) | ||||
Current Portion of Term Loans | (4,984 | ) | (5,208 | ) | ||||
Long-Term Debt | $ | 8,488 | $ | 7,715 | ||||
| ||||
| ||||
| ||||
(In thousands) | ||||
Fiscal 2021, remainder | $ | 1,052 | ||
Fiscal 2022 | 5,326 | |||
Fiscal 2023 | 7,250 | |||
$ | 13,628 | |||
We
The
May 2, 2020 | January 31, 2020 | |||||||||||||||||||||||
Cash Flow Hedges | Fair Value Derivatives | Fair Value Derivatives | ||||||||||||||||||||||
(In thousands) | Notional Amount | Asset | Liability | Notional Amount | Asset | Liability | ||||||||||||||||||
Cross-currency Interest Rate Swap | $ | 4,489 | $ | — | $ | 192 | $ | 4,489 | $ | — | $ | 250 | ||||||||||||
Interest Rate Swap | $ | 8,250 | $ | — | $ | 202 | $ | 8,250 | $ | — | $ | 96 |
October 31, 2020 | January 31, 2020 | |||||||||||||||||||||||
Cash Flow Hedges (In thousands) | Fair Value Derivatives | Fair Value Derivatives | ||||||||||||||||||||||
Notional Amount | Asset | Liability | Notional Amount | Asset | Liability | |||||||||||||||||||
Cross-currency Interest Rate Swap | $ | — | $ | — | $ | — | $ | 4,489 | $ | — | $ | 250 | ||||||||||||
Interest Rate Swap | $ | — | $ | — | $ | — | $ | 8,250 | $ | — | $ | 96 |
Amount of Gain (Loss) Recognized in OCI on Derivative | Location of Gain (Loss) Reclassified from Accumulated OCI into Income (Expense) | Amount of Gain (Loss) Reclassified from Accumulated OCI into Income (Expense) | ||||||||||||||||||
Cash Flow Hedge (In thousands) | May 2, 2020 | May 4, 2019 | May 2, 2020 | May 4, 2019 | ||||||||||||||||
Swap Contracts | $ | (58 | ) | $ | 149 | Other Income (Expense | ) | $ | 43 | $ | 185 | |||||||||
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|
|
Three Months Ended | ||||||||||||||||||||
Amount of Gain (Loss) Recognized in OCI on Derivative | Location of Gain (Loss) Reclassified from Accumulated OCI into Income | Amount of Gain (Loss) Reclassified from Accumulated OCI into Income | ||||||||||||||||||
Cash Flow Hedge (In thousands) | October 31, 2020 | November 2, 2019 | October 31, 2020 | November 2, 2019 | ||||||||||||||||
Swap contracts | $ | 20 | $ | 80 | Other expense | $ | — | $ | (3) | |||||||||||
Nine Months Ended | ||||||||||||||||||||
Amount of Gain (Loss) Recognized in OCI on Derivative | Location of Gain (Loss) Reclassified from Accumulated OCI into Income | Amount of Gain (Loss) Reclassified from Accumulated OCI into Income | ||||||||||||||||||
Cash Flow Hedge (In thousands) | October 31, 2020 | November 2, 2019 | October 31, 2020 | November 2, 2019 | ||||||||||||||||
Swap contracts | $ | (320) | $ | 82 | Other expense | $ | (248) | $ | 259 | |||||||||||
Operating Leases (In thousands) | Balance Sheet Classification | May 2, 2020 | January 31, 2020 | |||||||
Lease Assets | Right of Use Assets | $ | 1,553 | $ | 1,661 | |||||
Lease Liabilities – Current | Other Accrued Expenses | 391 | 416 | |||||||
Lease Liabilities – Long Term | Lease Liabilities | 1,199 | 1,279 |
Operating Leases (In thousands) | Balance Sheet Classification | October 31, 2020 | January 31, 2020 | |||||||||
Lease Assets | Right of Use Assets | $ | 1,436 | $ | 1,661 | |||||||
Lease Liabilities – Current | Other Liabilities and Accrued Expenses | 376 | 416 | |||||||||
Lease Liabilities – Long Term | Lease Liabilities | 1,105 | 1,279 |
Three Months Ended | ||||||||||
Operating Leases (In thousands) | Statement of Income Classification | May 2, 2020 | May 4, 2019 | |||||||
Operating Lease Costs | General and Administrative Expense | $ | 120 | $ | 92 |
Three Months Ended | Nine Months Ended | |||||||||||||||||
Operating Leases (In thousands) | Statement of Income Classification | October 31, 2020 | November 2, 2019 | October 31, 2020 | November 2, 2019 | |||||||||||||
Operating Lease Costs | General and Administrative Expense | $ | 120 | $ | 119 | $ | 362 | $ | 329 |
(In thousands) | May 2, 2020 | |||
2021 | $ | 305 | ||
2022 | 348 | |||
2023 | 298 | |||
2024 | 272 | |||
2025 | 168 | |||
Thereafter | 391 | |||
|
| |||
Total Lease Payments | 1,782 | |||
Less: Imputed Interest | (192 | ) | ||
|
| |||
Total Lease Liabilities | $ | 1,590 | ||
|
|
(In thousands) | October 31, 2020 | |||
2021 , remaining | $ | 106 | ||
2022 | 361 | |||
2023 | 310 | |||
2024 | 283 | |||
2025 | 177 | |||
Thereafter | 415 | |||
Total Lease Payments | 1,652 | |||
Less: Imputed Interest | (171) | |||
Total Lease Liabilities | $ | 1,481 | ||
Three Months Ended | ||||||||
(In thousands) | May 2, 2020 | May 4, 2019 | ||||||
Cash paid for amounts included in the measurement of lease liabilities: | $ | 106 | �� | $ | 100 |
Three Months Ended | Nine Months Ended | |||||||||||||||
(In thousands) | October 31, 2020 | November 2, 2019 | October 31, 2020 | November 2, 2019 | ||||||||||||
Cash paid for amounts included in the measurement of lease liabilities: | ||||||||||||||||
Operating cash flows for operating leases | $ | 102 | $ | 108 | $ | 333 | $ | 306 |
(In thousands) | Foreign Currency Translation Adjustments | Cash Flow Hedges | Total | |||||||||
Balance at January 31, 2020 | $ | (985 | ) | $ | (108 | ) | $ | (1,093 | ) | |||
Other Comprehensive Loss before reclassification | (142 | ) | (46 | ) | (188 | ) | ||||||
Amounts reclassified from AOCL to Earnings | — | (33 | ) | (33 | ) | |||||||
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|
|
|
| |||||||
Other Comprehensive Loss | (142 | ) | (79 | ) | (221 | ) | ||||||
|
|
|
|
|
| |||||||
Balance at May 2, 2020 | $ | (1,127 | ) | $ | (187 | ) | $ | (1,314 | ) | |||
|
|
|
|
|
|
(In thousands) | Foreign Currency Translation Adjustments | Cash Flow Hedges | Total | |||||||||
Balance at January 31, 2020 | $ | (985) | $ | (108) | $ | (1,093) | ||||||
Other Comprehensive Loss before reclassification | 53 | (255) | (202) | |||||||||
Amounts reclassified from AOCL to Earnings | — | 193 | 193 | |||||||||
Cross-Currency Interest Rate Swap Termination | — | 45 | 45 | |||||||||
Other Comprehensive Income (Loss) | 53 | (17) | 36 | |||||||||
Balance at October 31, 2020 | $ | (932) | $ | (125) | $ | (1,057) | ||||||
Three Months Ended | ||||||||
(In thousands) | May 2, 2020 | May 4, 2019 | ||||||
Stock Options | $ | 133 | $ | 212 | ||||
Restricted Stock Awards and Restricted Stock Units | 357 | 384 | ||||||
Employee Stock Purchase Plan | 5 | 5 | ||||||
|
|
|
| |||||
Total | $ | 495 | $ | 601 | ||||
|
|
|
|
Three Months Ended | Nine Months Ended | |||||||||||||||
(In thousands) | October 31, 2020 | November 2, 2019 | October 31, 2020 | November 2, 2019 | ||||||||||||
Stock Options | $ | 126 | $ | 148 | $ | 390 | $ | 487 | ||||||||
Restricted Stock Awards and Restricted Stock Units | 462 | 371 | 1,284 | 1,074 | ||||||||||||
Employee Stock Purchase Plan | 3 | 6 | 13 | 15 | ||||||||||||
Total | $ | 591 | $ | 525 | $ | 1,687 | $ | 1,576 | ||||||||
Number of Options | Weighted Average Exercise Price | |||||||
Outstanding at January 31, 2020 | 679,044 | $ | 14.46 | |||||
Granted | — | — | ||||||
Exercised | (800 | ) | 7.36 | |||||
Forfeited | (48,374 | ) | 12.83 | |||||
Canceled | (1,400 | ) | 7.36 | |||||
|
|
|
| |||||
Outstanding at May 2, 2020 | 628,470 | $ | 14.61 | |||||
|
|
|
|
Number of Options | Weighted Average Exercise Price | |||||||
Outstanding at January 31, 2020 | 679,044 | $ | 14.46 | |||||
Granted | — | — | ||||||
Exercised | (800) | 7.36 | ||||||
Forfeited | (54,261) | 12.89 | ||||||
Canceled | (1,400) | 7.36 | ||||||
Outstanding at October 31, 2020 | 622,583 | $ | 14.62 | |||||
Outstanding | Exercisable | |||||||||||||||||||||||
Range of Exercise prices | Number of Shares | Weighted- Average Exercise Price | Weighted- Average Remaining Contractual Life | Number of Shares | Weighted- Average Exercise Price | Weighted Average Remaining Contractual Life | ||||||||||||||||||
$5.00-10.00 | 42,281 | $ | 7.98 | 2.0 | 42,281 | $ | 7.98 | 2.0 | ||||||||||||||||
$10.01-15.00 | 364,464 | $ | 13.63 | 5.5 | 319,166 | $ | 13.65 | 5.3 | ||||||||||||||||
$15.01-20.00 | 221,725 | $ | 17.48 | 7.5 | 128,871 | $ | 16.92 | 7.1 | ||||||||||||||||
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|
| |||||||||||||
628,470 | $ | 14.61 | 6.0 | 490,318 | $ | 14.02 | 5.5 | |||||||||||||||||
|
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|
|
|
|
|
Outstanding | Exercisable | |||||||||||||||||||||||
Range of Exercise prices | Number of Shares | Weighted- Average Exercise Price | Weighted- Average Remaining Contractual Life | Number of Shares | Weighted- Average Exercise Price | Weighted Average Remaining Contractual Life | ||||||||||||||||||
$5.00-10.00 | 41,444 | $ | 7.97 | 1.6 | 41,444 | $ | 7.97 | 1.6 | ||||||||||||||||
$10.01-15.00 | 359,414 | $ | 13.63 | 5.1 | 314,241 | $ | 13.65 | 4.9 | ||||||||||||||||
$15.01-20.00 | 221,725 | $ | 17.48 | 7.1 | 167,367 | $ | 17.22 | 7.0 | ||||||||||||||||
622,583 | $ | 14.62 | 5.6 | 523,052 | $ | 14.34 | 5.3 | |||||||||||||||||
(RSAs)
RSUs, PSUs & RSAs | Weighted Average Grant Date Fair Value | |||||||
Outstanding at January 31, 2020 | 134,634 | $ | 16.79 | |||||
Granted | 197,131 | 7.94 | ||||||
Vested | (23,638 | ) | 13.00 | |||||
|
|
|
| |||||
Outstanding at May 2, 2020 | 308,127 | $ | 11.42 | |||||
|
|
|
|
RSAs & RSUs | Weighted Average Grant Date Fair Value | |||||||
Outstanding at January 31, 2020 | 134,634 | $ | 16.79 | |||||
Granted | 245,131 | 7.61 | ||||||
Vested | (59,747) | 17.58 | ||||||
Forfeited | (3,997) | 16.40 | ||||||
Outstanding at October 31, 2020 | 316,021 | $ | 9.53 | |||||
| ||||
|
Three Months Ended | Nine Months Ended | |||||||
Fiscal 2021 | 160.0 | % | 45.9 | % | ||||
Fiscal 2020 | (118.2 | )% | 5.5 | % |
We maintain a valuation allowance on some of our deferred tax assets in certain jurisdictions. A valuation allowance is required when, based upon an assessment of various factors, including recent operating loss history, anticipated future earnings, and prudent and reasonable tax planning strategies, it is more likely than not that some portion of the deferred tax assets will not be realized.
Three Months Ended | ||||||||||||||||
Revenue | Segment Operating Profit (Loss) | |||||||||||||||
(In thousands) | May 2, 2020 | May 4, 2019 | May 2, 2020 | May 4, 2019 | ||||||||||||
PI | $ | 22,380 | $ | 23,591 | $ | 3,146 | $ | 2,886 | ||||||||
T&M | 8,539 | 12,590 | (156 | ) | 2,581 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | $ | 30,919 | $ | 36,181 | 2,990 | 5,467 | ||||||||||
|
|
|
| |||||||||||||
Corporate Expenses | 2,327 | 2,999 | ||||||||||||||
|
|
|
| |||||||||||||
Operating Income | 663 | 2,468 | ||||||||||||||
Other Expense, Net | (349 | ) | (368 | ) | ||||||||||||
|
|
|
| |||||||||||||
Income Before Income Taxes | 314 | 2,100 | ||||||||||||||
Income Tax (Benefit) Provision | (118 | ) | 400 | |||||||||||||
|
|
|
| |||||||||||||
Net Income | $ | 432 | $ | 1,700 | ||||||||||||
|
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|
|
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||||||
Revenue | Segment Operating Profit (Loss) | Revenue | Segment Operating Profit (Loss) | |||||||||||||||||||||||||||||
(In thousands) | October 31, 2020 | November 2, 2019 | October 31, 2020 | November 2, 2019 | October 31, 2020 | November 2, 2019 | October 31, 2020 | November 2, 2019 | ||||||||||||||||||||||||
Product Identification | $ | 22,898 | $ | 21,749 | $ | 3,521 | $ | 1,880 | $ | 66,907 | $ | 67,484 | $ | 9,813 | $ | 6,990 | ||||||||||||||||
T&M | 5,119 | 11,569 | (751) | 1,397 | 19,688 | 35,483 | (1,314) | 5,533 | ||||||||||||||||||||||||
Total | $ | 28,017 | $ | 33,318 | 2,770 | 3,277 | $ | 86,595 | $ | 102,967 | 8,499 | 12,523 | ||||||||||||||||||||
Corporate Expenses | 2,353 | 2,830 | 7,214 | 8,445 | ||||||||||||||||||||||||||||
Operating Income | 417 | 447 | 1,285 | 4,078 | ||||||||||||||||||||||||||||
Other Expense, Net | (437) | (238) | (459) | (788) | ||||||||||||||||||||||||||||
Income (Loss) Before Income Taxes | (20) | 209 | 826 | 3,290 | ||||||||||||||||||||||||||||
Income Tax (Benefit) Provision | (32) | (247) | 379 | 182 | ||||||||||||||||||||||||||||
Net Income | $ | 12 | $ | 456 | $ | 447 | $ | 3,108 | ||||||||||||||||||||||||
Liabilities measured at fair value: | Fair value measurement at May 2, 2020 | Fair value measurement at January 31, 2020 | ||||||||||||||||||||||||||||||
(In thousands) | Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||||
Cross-Currency Interest Rate Swap Contract (included in Other Long-Term Liabilities) | $ | — | $ | 192 | $ | — | $ | 192 | $ | — | $ | 250 | $ | — | $ | 250 | ||||||||||||||||
Interest Rate Swap Contract (included in Other Long-Term Liabilities) | — | 202 | — | 202 | — | 96 | — | 96 | ||||||||||||||||||||||||
Earnout Liability (included in Other Long-Term Liabilities) | — | — | — | — | — | — | 14 | 14 | ||||||||||||||||||||||||
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Total Liabilities | $ | — | $ | 394 | $ | — | $ | 394 | $ | — | $ | 346 | $ | 14 | $ | 360 | ||||||||||||||||
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Liabilities measured at fair value: | Fair value measurement at October 31, 2020 | Fair value measurement at January 31, 2020 | ||||||||||||||||||||||||||||||
(In thousands) | Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||||
Cross-Currency Interest Rate Swap Contract (included in Other Long-Term Liabilities) | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 250 | $ | — | $ | 250 | ||||||||||||||||
Interest Rate Swap Contract (included in Other Long-Term Liabilities) | — | — | — | — | — | 96 | — | 96 | ||||||||||||||||||||||||
Earnout Liability (included in Other Long-Term Liabilities) | — | — | — | — | — | — | 14 | 14 | ||||||||||||||||||||||||
Total Liabilities | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 346 | $ | 14 | $ | 360 | ||||||||||||||||
May 2, 2020 | ||||||||||||||||||||
Fair Value Measurement | Carrying Value | |||||||||||||||||||
(In thousands) | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||
Long-Term Debt and related current maturities | $ | — | $ | — | $ | 13,227 | $ | 13,227 | $ | 13,034 | ||||||||||
January 31, 2020 | ||||||||||||||||||||
Fair Value Measurement | Carrying Value | |||||||||||||||||||
(In thousands) | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||
Long-Term Debt and related current maturities | $ | — | $ | — | $ | 13,258 | $ | 13,258 | $ | 13,034 |
October 31, 2020 | ||||||||||||||||||||
Fair Value Measurement | ||||||||||||||||||||
(In thousands) | Level 1 | Level 2 | Level 3 | Total | Carrying Value | |||||||||||||||
Long-Term debt and related current maturities | $ | — | $ | — | $ | 13,637 | $ | 13,637 | $ | 13,628 |
January 31, 2019 | ||||||||||||||||||||
Fair Value Measurement | ||||||||||||||||||||
(In thousands) | Level 1 | Level 2 | Level 3 | Total | Carrying Value | |||||||||||||||
Long-Term debt and related current maturities | $ | — | $ | — | $ | 13,258 | $ | 13,258 | $ | 13,034 |
Note 17 – Subsequent Events
Payroll Protection Program Loan
On May 6, 2020, we entered into a loan agreement with, and executed a promissory note in favor of Greenwood Credit Union (“Greenwood”) pursuant to which we borrowed $4.4 million (the “ PPP Loan”) from Greenwood pursuant to the Paycheck Protection Program (“PPP”) administered by the United States Small Business Administration (the “SBA”) and authorized by the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), enacted on March 27, 2020.
The terms of the PPP Loan were subsequently revised in accordance with the provisions of the Paycheck Protection Flexibility Act of 2020 (the “PPP Flexibility Act”) which was enacted on June 5, 2020.
The PPP Loan, which will mature on the fifth anniversary of the date on which we submit our request for forgiveness with respect to the PPP Loan, is unsecured and bears interest at a rate of 1.0% per annum. The PPP Loan may be prepaid at any time without penalty. The Loan Agreement and Promissory Note include customary provisions for a loan of this type, including prohibitions on our payment of dividends or repurchase of shares of our stock while the PPP Loan remains outstanding. The Loan Agreement and Promissory Note also include events of default relating to, among other things, payment defaults, breaches of the provisions of the Loan Agreement or the Promissory Note, and cross-defaults on other loans.
Subject to the limitations and conditions set forth in the CARES Act, the PPP Flexibility Act, and the regulations and guidance provided by the SBA with respect to the PPP, a portion of the PPP Loan in an amount up to the amount of the PPP Loan proceeds that we spend on payroll, rent, utilities and interest on certain debt during the twenty-four-week period following incurrence of the PPP Loan, may be forgiven under the PPP. The amount of the PPP Loan to be forgiven in respect of rent, utilities and interest on certain debt will be capped at 40% of the forgiven amount, with the remaining forgiven amount allocated to payroll costs. We intend to utilize the proceeds of the PPP Loan in a manner which will enable us to qualify for forgiveness of the PPP Loan. However, no assurance can be provided that all or any portion of the PPP Loan will be forgiven.
Letter Agreement with Bank of America
On June 22, 2020, we entered into a Letter Agreement with Bank of America, N.A. Pursuant to that agreement, Bank of
America agreed to waive compliance with certain financial covenants in our Credit Agreement related to our consolidated leverage ratio and consolidated EBITDA (as defined in the Credit Agreement) for the measurement period ending May 2, 2020. The Letter Agreement imposes an additional financial covenant that requires us to have, as of June 30, 2020, consolidated EBITDA of not less than $9.5 million on a trailing twelve-months basis, and to report our compliance with such covenant on or before August 15, 2020. The Letter Agreement provides that such covenant will not be tested until August 15, 2020 and we do not expect to be in compliance with the covenants at the time, hence constituting an immediate event of default under the Credit Agreement. However, we and Bank of America are actively negotiating the terms of an amendment to restructure the Credit Agreement that would provide for mutually acceptable revised financial and operational covenants and other mutually acceptable revised terms and we both fully expect that amendment to be executed prior to August 15, 2020. The effect of the Letter Agreement therefore is to give both parties sufficient time to complete the relevant documentation and also enable us to execute the amendment by that deadline.
Item 2. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
In March 2019, all major civil aviation authorities worldwide grounded the Boeing 737 MAX aircraft for safety reasons. In April 2019, Boeing reduced the number
On March 11, 2020, the World Health Organization declaredglobal a respiratory illness caused by a novel coronavirus, to be aour suppliers and our other business partners conduct business. Governments in affected regions have implemented, and we expect that they will continue to implement and periodically change policies in relation to safety precautions including quarantines, travel restrictions, business closures, cancellations of public gatherings and any other measures as they deem necessary. Many organizations and individuals, including us and our employees have taken and are taking additional steps to avoid or reduce infection, including limiting travel and working from home when possible. These measures are disrupting normal business operations including both inside our operations and outside of affected areasin our customer base, and as a result have had significant negative impacts on businesses and financial markets worldwide.
Due to theCOVID-19 pandemic, global air travel demand has precipitously declined, and the number of flights scheduled by airlines has been sharply curtailed. As a result, demand for aircraft by airlines has declined and is expected to remain lower for an unknown period, and thus manufacturers who make the airplanes that use our aerospace products have reduced their projected production rates across most or all of their product lines. Demand for spare products, paper, and parts and repairs has also been significantly impacted by the decline in air travel demand. While the major aircraft manufacturers have given some general statements to the public about their projected production rate changes that can be used to help align our overall production capacity, in general, we produce products according to customer forecasts and order rates and at this time, the actual rates and timing of production requirements that will materialize is uncertain. The degree and duration of the decline in future demand for aircraft and when and over what period any recovery will occur is still unknown. The decline in demand has had, and will continue to have a material adverse impact on our revenues and results of operations until demand recovers. Our strategy and operational plans are to maintain sufficient capabilities to satisfy demand as and when it occurs, while prudently adjusting costs as appropriate in the interim.
TheCOVID-19 pandemic has also had an adverse impact on the sales of our Product Identification hardware products due to travel restrictions, because, in most, cases customers preferin-person demonstrations of these printers at their production sites prior to placing orders with us and those visits have been severely limited. Additionally, the widespread cancellation of trade shows, which traditionally provided an effective forum for customers to consider our products, has also had an adverse impact. A greater reliance on remote video demonstrations, sample deliveries and digital marketing has proven effective in obtaining sales, but at a lower level than traditional methods. We expect that, while our customers’ acceptance of remote methods in their buying processes may have changed permanently, the degree to which that will prove to be the case once the currentCOVID-19 crisis has abated is unknown. Despite favorable market reception to our recently refreshed and expanded product lines, we expect that the level of hardware sales will remain lower until it is possible for our direct sales force and distributors to travel to visit customers and attend and present products at trade shows. The same dynamic has also affected our Test and Measurement product lines.
Shortly after theCOVID-19 crisis began, we experienced a somewhat greater demand for ink, toner, media and parts supplies that are used in our digital label printers. In addition to the strong demand from our food & beverage customers, we have also seen increased demand coming from customers selling products that have experienced higher demand as a result of the COVID-19 crisis, such as, certain medical, janitorial and sanitation related products. We do not know how long this trend will continue. However, although we have had to occasionally extend our lead times because of some temporary labor shortages, we have been able to adjust production and satisfy our customer demands successfully, and being a reliable supplier is one of the characteristics on which we compete.
Since theincluding requiringbased on that guidance and on our growing experience. As the
In responsenormal order fulfillment lead times after some initial periods of extended lead times because of temporary labor shortages.
is unknown at this time.
Disruptions
(Dollars in thousands) | May 2, 2020 | As a % of Revenue | May 4, 2019 | As a % of Revenue | % Change Over Prior Year | |||||||||||||||
Product Identification | $ | 22,380 | 72.4 | % | $ | 23,591 | 65.2 | % | (5.1 | )% | ||||||||||
T&M | 8,539 | 27.6 | % | 12,590 | 34.8 | % | (32.2 | )% | ||||||||||||
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Total | $ | 30,919 | 100.0 | % | $ | 36,181 | 100.0 | % | (14.5 | )% | ||||||||||
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(Dollars in thousands) | October 31, 2020 | As a % of Revenue | November 2, 2019 | As a % of Revenue | % Change Compared to Prior Year | �� | ||||||||||||||
Product Identification | $ | 22,898 | 81.7 | % | $ | 21,749 | 65.3 | % | 5.3 | % | ||||||||||
T&M | 5,119 | 18.3 | % | 11,569 | 34.7 | % | (55.8 | )% | ||||||||||||
Total | $ | 28,017 | 100.0 | % | $ | 33,318 | 100.0 | % | (15.9 | )% | ||||||||||
the TrojanLabel product group.
group.
period costs.
(Dollars in thousands) | October 31, 2020 | As a % of Revenue | November 2, 2019 | As a % of Revenue | % Change Compared to Prior Year | |||||||||||||||
Product Identification | $ | 66,907 | 77.3 | % | $ | 67,484 | 65.5 | % | (0.9 | )% | ||||||||||
T&M | 19,688 | 22.7 | % | 35,483 | 34.5 | % | (44.5 | )% | ||||||||||||
Total | $ | 86,595 | 100.0 | % | $ | 102,967 | 100.0 | % | (15.9 | )% | ||||||||||
The benefit for federal, state and foreign
The Companystock.
Three Months Ended | ||||||||||||||||
Revenue | Segment Operating Profit (Loss) | |||||||||||||||
(In thousands) | May 2, 2020 | May 4, 2019 | May 2, 2020 | May 4, 2019 | ||||||||||||
Product Identification | $ | 22,380 | $ | 23,591 | $ | 3,146 | $ | 2,886 | ||||||||
T&M | 8,539 | 12,590 | (156 | ) | 2,581 | |||||||||||
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Total | $ | 30,919 | $ | 36,181 | 2,990 | 5,467 | ||||||||||
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Corporate Expenses | 2,327 | 2,999 | ||||||||||||||
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Operating Income | 663 | 2,468 | ||||||||||||||
Other Expense, Net | (349 | ) | (368 | ) | ||||||||||||
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Income Before Income Taxes | 314 | 2,100 | ||||||||||||||
Income Tax (Benefit) Provision | (118 | ) | 400 | |||||||||||||
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Net Income | $ | 432 | $ | 1,700 | ||||||||||||
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Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||||||
Revenue | Segment Operating Profit (Loss) | Revenue | Segment Operating Profit (Loss) | |||||||||||||||||||||||||||||
(In thousands) | October 31, 2020 | November 2, 2019 | October 31, 2020 | November 2, 2019 | October 31, 2020 | November 2, 2019 | October 31, 2020 | November 2, 2019 | ||||||||||||||||||||||||
Product Identification | $ | 22,898 | $ | 21,749 | $ | 3,521 | $ | 1,880 | $ | 66,907 | $ | 67,484 | $ | 9,813 | $ | 6,990 | ||||||||||||||||
T&M | 5,119 | 11,569 | (751 | ) | 1,397 | 19,688 | 35,483 | (1,314 | ) | 5,533 | ||||||||||||||||||||||
Total | $ | 28,017 | $ | 33,318 | 2,770 | 3,277 | $ | 86,595 | $ | 102,967 | 8,499 | 12,523 | ||||||||||||||||||||
Corporate Expenses | 2,353 | 2,830 | 7,214 | 8,445 | ||||||||||||||||||||||||||||
Operating Income | 417 | 447 | 1,285 | 4,078 | ||||||||||||||||||||||||||||
Other Expense, Net | (437 | ) | (238 | ) | (459 | ) | (788 | ) | ||||||||||||||||||||||||
Income Before Income Taxes | (20 | ) | 209 | 826 | 3,290 | |||||||||||||||||||||||||||
Income Tax (Benefit) Provision | (32 | ) | (247 | ) | 379 | 182 | ||||||||||||||||||||||||||
Net Income | $ | 12 | $ | 456 | $ | 447 | $ | 3,108 | ||||||||||||||||||||||||
Total current quarter revenue
year is due to lower sales revenue in the current year.
Conditions have deteriorated in the credit markets generally and in the bank financing market specifically, and the availability of credit has been reduced as a result of lending institutions taking a more conservative posture in response to the risks introduced by theCOVID-19 pandemic. Because offiscal 2021, the deterioration of our financial condition and operating results due to the decline in 737 our first quarter operating results caused us to violate athe financial covenantcovenants in our Credit Agreement dated February 28, 2017 (the “Existing Credit Agreement”) with Bank of America. Specifically, under the terms of our current Credit Agreement we are obligated to maintain, as of the end of each fiscal quarter, a minimum EBITDA (as defined in the agreement) of $9.5 million on a trailing twelve-months basis and a maximum consolidated leverage ratio of 3.0 to 1.0. Our actual EBITDA was below the required level for the period ended May 2, 2020. However, onAmerica, N.A. (the “Lender”). On June 22, 2020, we entered into a letter agreement with Bank of America, N.A. (the “Letter Agreement”),the Lender wherein Bank of Americait agreed to waive compliance with both of those financial covenants for the measurement period ended May 2, 2020. The Letter Agreement requires us to have, as
If for any reason we are unable to reach agreement with Bank of America on the restructuring of the Credit Agreement or secure alternative financing on acceptable terms prior to August 15, 2020, and the Letter Agreement were not extended or otherwise modified to eliminate any failure by us to comply with its terms or the terms of the Credit Agreement, Bank of America would have the right to declare a default, accelerate all of our outstanding indebtedness under theExisting Credit Agreement and demand payment thereof, which demand we would be unable to satisfy. In addition, any defaulta portion of the outstanding revolving loans borrowed by us under the Existing Credit Agreement, that would permit Bank of America to accelerate the repayment of the indebtedness outstanding under that facility would also constituteand (ii) a default under the PPP Loan and cause the indebtedness outstanding thereunder to become immediately payable. If any of the foregoing were to occur, it would have a material adverse impact on us.
Under the terms of the Letter Agreement, we are also not permitted to request any additional borrowings under the revolving line of credit through August 15, 2020, and we will not be permitted to request any such additional borrowings thereafter unless we are in compliance with the Credit Agreement. The Letter Agreement also prohibits us from making any dividend or stock repurchase payments or other restricted payments through August 15, 2020, and we will be permitted to make restricted payments thereafter only in compliance with the Credit Agreement.
During the first quarter of the current year, we borrowed an additional $5.0$10.0 million on our revolving credit facility andavailable to us for general corporate purposes. Revolving credit loans may be borrowed, at May 2, 2020 we had $11.5 million of borrowings outstanding under that facility. On May 2, 2020, our cash and cash equivalents were $11.1 million and at that date we had $6.0 million remaining available for borrowing under our revolving credit facility. Pursuantoption, in U.S. Dollars or, subject to the terms of the Fourth Amendment to the Credit Agreement, which we and Bank of America entered into in December 2019, the aggregate amount available for borrowings under the revolving line of credit will decrease to $10.0 million at the end of the third quarter of fiscal 2021. Pursuant to the Letter Agreement, we are not permitted to request any additional borrowings under the revolving line of credit through August 15, 2020.
The terms of the PPP Loan were subsequently revised in accordance with the provisions of the Paycheck Protection Flexibility Act of 2020 (the “PPP Flexibility Act”), which was enacted on June 5, 2020.
We believe that our obtaining the PPP Loan and suspending the payment of dividends on our common stock were instrumental in our ability to successfully negotiate the A&R Credit Agreement.
As a result of the impact of theCOVID-19 pandemic, our customers may also experience liquidity pressure and be unable to pay us for products on a timely basis. During the first quarter we experienced a limited number of cases in which certain of our aerospace customers failed to pay us on a timely basis and we increased our reserves for potential losses on those accounts. We also wrote off a small receivable from an airline that has declared bankruptcy. If the impact of theCOVID-19 crisis continues for a prolonged period of time or worsens, we may experience further similar, but more material adverse impacts on our results and financial condition.
Our backlog decreased 2.8% fromyear-end to $25.9 million at the end of the first quarter of fiscal 2021.
Indebtedness
We and our wholly owned Danish subsidiaries, ANI ApS and TrojanLabel ApS (collectively, the “Parties”), are parties to a credit agreement (“Credit Agreement”) with Bank of America, N.A. The Credit Agreement and its subsequent amendments through fiscal 2019 provided for a secured credit facility consisting of a term loan to ANI ApS in the principal amount of $9.2 million, a term loan to us in the principal amount of $15.0 million and a $10.0 million revolving credit facility. On December 9, 2019, the Parties entered into a Fourth Amendment (the “Fourth Amendment”) to the Credit Agreement. The Fourth Amendment amended the Credit Agreement to, among other things, (i) increase the aggregate amount available to us for borrowings under the revolving line of credit from $10.0 million to $17.5 million through the third quarter of fiscal 2021 and (ii) modify the financial covenants with which we must comply thereunder by excluding certain capital expenditures from the calculation of our consolidated fixed charge coverage ratio, providing that the minimum consolidated fixed charge coverage ratio covenant will be suspended through the second quarter of fiscal 2021, and adding a minimum consolidated EBITDA covenant commencing withassociated accrued interest) during the fourth quarter of the current fiscal 2020 and continuing through the second quarter of fiscal 2021.
See Note 17 of the condensed consolidated financial statements included in this Quarterly Report on Form10-Qyear. Whether our application for a discussion of the letter agreement we entered into with Bank of America on June 22, 2020, which, among other things, suspends our access to the revolving line of credit under the Credit Agreement on the terms described therein.
Both term loans bear interest at a rate per annum equal to the LIBOR rate plus a margin that varies within a range of 1.0% to 1.5% based on our consolidated leverage ratio.
In connection with our entry into the Credit Agreement, ANI ApS entered into a hedging agreement to manage the variable interest rate risk and currency risk associated with its payments in respect to the term loan. Under this combined arrangement, payments of principal and interest with respect to approximately $8.9 million of the principal of the term loanforgiveness will be madegranted and in Danish Kroner, and interest on such principalwhat amount will be payable at a fixed rate of 0.67% per annum for the entire term, subject only to potential changes based on our consolidated leverage ratio. Additionally, we entered into a hedging agreement to manage the variable interest rate risk associated with our payments with respect to the $15.0 million term loan. Under this combined arrangement, interest will be payable at a fixed rate of 2.04% per annum for the entire term, plus an incremental margin of 1.0% to 1.5%, based on our consolidated leverage ratio.
Revolving credit loans may be borrowed, at our option, in U.S. Dollars or,is subject to certain conditions, Euros, British Pounds, Canadian Dollars or Danish Kroner. Amounts borrowed underan application to, and approval by, the revolving credit facility bear interest at a rate per annum equal to, at our option, either (a) the LIBOR rate (or, in the case of revolving credit loans denominated in a currency other than U.S. Dollars, the applicable quoted rate), plus a margin that varies within a range of 1.0% to 1.5% based on our consolidated leverage ratio, or (b) a fluctuating reference rate equal to the highest of (i) the federal funds’ rate plus 0.50%, (ii) Bank of America’s publicly announced prime rate or (iii) the LIBOR rate plus 1.00%, plus a margin that varies within a range of 0.0% to 0.5% based on our consolidated leverage ratio. We are required to pay a commitment fee on the undrawn portion of the revolving credit facility at the rate of 0.25% per annum. Outstanding borrowings under the revolving credit line during fiscal 2020 bear interest at a weighted average annual rate of 2.52%SBA and we paid $73,000 of interest expense for revolving credit line borrowings for the three months ended May 2, 2020.
The obligations of ANI ApS in respect of the $9.2 million term loan are guaranteed by us and TrojanLabel ApS. Our obligations in respect of the $15.0 million term loan, revolving credit facility and its guarantee in respect of the ANI ApS term loan are secured by substantially all of our assets (including a pledge of a portion of the equity interests we hold in ANI ApS and our wholly owned German subsidiary, AstroNova GmbH),may also be subject to certain exceptions.
The Lender is entitled to accelerate repaymentfurther requirements in any regulations and guidelines the SBA may adopt.
Our The decline in days sales outstanding is largely due to the relative decline in sales of aerospace products, which tend to have longer collection cycles.
Product Identification inventory decreases. Inventory days on hand increased by virtue of the lower aerospace sell through.
Item 3. |
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Item 4. |
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Item 1. |
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Item 1A. |
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We continue
its impacts on the economy evolve. While it is not possible at this time to estimate the full scope of the impact thatcountries,areas, actions taken to protect employees, and the impact of the pandemic on all business activities to furthercontinue to adversely impact our operational capacity and the efficiency of our team members and will continue to materially adverselynegatively affect our results of operations and financial condition.
financing should it be needed.
Item 2. |
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Total Number of Shares Repurchased | Average Price paid Per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Maximum Number of Shares That May Be Purchased Under the Plans or Programs | |||||||||||||
February 1 – February 29 | — | — | — | — | ||||||||||||
March 1 – March 31 | 5,570 | (a)(b) | 6.92 | (a)(b) | — | — | ||||||||||
April 1 – April 30 | — | — | — | — |
| ||||||||||||||||
Total Number of Shares Repurchased | Average Price paid Per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Maximum Number of Shares That May Be Purchased Under the or | |||||||||||||
August 1—August 31 | — | $ | — | — | — | |||||||||||
September 1—September 30 | — | $ | — | — | — | |||||||||||
October 1—October 31 | — | $ | — | — | — |
Item 5. |
Other Information |
We are providing the following information underin this Item 5 in lieu of reportingdisclosing the information under Item 1.01 “Entry Into a Material Definitive Agreement,” of a Current Report on
hereof.
Thesecond, third and fourth quarters of our fiscal year 2021.
Item 6. |
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* | Management contract or compensatory plan or arrangement. |
ASTRONOVA, | ||||||||
(Registrant) | ||||||||
Date: | By | /s/ Gregory A. Woods | ||||||
Gregory A. Woods, | ||||||||
President and Chief Executive Officer | ||||||||
(Principal Executive Officer) | ||||||||
By | /s/ David S. Smith | |||||||
David S. Smith, | ||||||||
Vice President, Chief Financial Officer and Treasurer (Principal Accounting Officer and Principal Financial Officer) |