Debt, Inventory Financing Facility, Capital Lease and Other Financing Obligations | 9 Months Ended |
Sep. 30, 2014 |
Debt Disclosure [Abstract] | ' |
Debt, Inventory Financing Facility, Capital Lease and Other Financing Obligations | ' |
3. Debt, Inventory Financing Facility, Capital Lease and Other Financing Obligations |
Debt |
Our long-term debt consists of the following (in thousands): |
|
| | | | | | | | |
| | September 30, | | | December 31, | |
2014 | 2013 |
Senior revolving credit facility | | $ | 17,000 | | | $ | 16,500 | |
Accounts receivable securitization financing facility | | | 35,000 | | | | 50,000 | |
Capital lease and other financing obligations | | | 2,505 | | | | 666 | |
| | | | | | | | |
Total | | | 54,505 | | | | 67,166 | |
Less: current portion of capital lease and other financing obligations | | | (914 | ) | | | (217 | ) |
Less: current portion of revolving credit facilities | | | — | | | | — | |
| | | | | | | | |
Long-term debt | | $ | 53,591 | | | $ | 66,949 | |
| | | | | | | | |
Our senior revolving credit facility (“revolving facility”) has an aggregate U.S. dollar equivalent maximum borrowing capacity of $350,000,000. The revolving facility matures April 26, 2017, is guaranteed by the Company’s material domestic subsidiaries and is secured by a lien on substantially all of the Company’s and each guarantor’s assets. The balance of $17,000,000 outstanding at September 30, 2014 was borrowed under the prime rate option at 3.25% per annum. As of September 30, 2014, $333,000,000 was available under the revolving facility. See “Debt Covenants” below. |
On June 25, 2014, we entered into an amendment to our accounts receivable securitization financing facility (the “ABS facility”) to extend the maturity date from April 24, 2015 to June 30, 2017, to change the administrative agent and to modify fees for unused capacity under the facility. The maximum borrowing capacity of the ABS facility remained unchanged at $200,000,000. While the ABS facility has a stated maximum amount, the actual availability under the ABS facility is limited by the quantity and quality of the underlying accounts receivable. Under the ABS facility, the floating interest rate applicable at September 30, 2014 was 1.06% per annum. As of September 30, 2014, qualified receivables were sufficient to permit access to the full $200,000,000 facility amount, of which $35,000,000 was outstanding. See “Debt Covenants” below. |
Debt Covenants |
Our revolving facility and our ABS facility contain various covenants customary for transactions of this type, including limitations on the payment of dividends and the requirement that we comply with maximum leverage, minimum fixed charge and minimum asset coverage ratio requirements and meet monthly, quarterly and annual reporting requirements. If we fail to comply with these covenants, the lenders would be able to demand payment within a specified period of time. At September 30, 2014, we were in compliance with all such covenants. |
Our consolidated debt balance that can be outstanding at the end of any fiscal quarter under our revolving facility and our ABS facility is limited by certain financial covenants, particularly a maximum leverage ratio. The maximum leverage ratio is calculated as aggregate debt outstanding divided by the sum of our trailing twelve month net earnings (loss) plus (i) interest expense, excluding non-cash imputed interest on our inventory financing facility, (ii) income tax expense (benefit), (iii) depreciation and amortization and (iv) non-cash stock-based compensation (“adjusted earnings”). The maximum leverage ratio permitted under the agreements is 2.75 times trailing twelve-month adjusted earnings. A significant drop in our adjusted earnings would limit the amount of indebtedness that could be outstanding at the end of any fiscal quarter to a level that would be below our combined facility maximum amount. Based on our maximum leverage ratio as of September 30, 2014, our consolidated debt balance that could have been outstanding under our revolving facility and our ABS facility was reduced from the maximum borrowing capacity of $550,000,000 to $495,528,000, of which $52,000,000 was outstanding at September 30, 2014. |
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Inventory Financing Facility |
Our inventory financing facility has a maximum borrowing capacity of $200,000,000 and matures on April 26, 2017. As of September 30, 2014 and December 31, 2013, $125,660,000 and $115,252,000, respectively, was included in accounts payable within our consolidated balance sheets related to our inventory financing facility. |
Capital Lease and Other Financing Obligations |
The present value of minimum lease payments under our capital lease, which expires on December 31, 2016, is included in our current and long-term debt balances as summarized in the table above. |
From time to time, we also enter into other financing agreements with financial intermediaries to facilitate the purchase of products from certain vendors. At September 30, 2014, amounts owed under other financing agreements of $2,002,000, which are payable in installments through August 2016, are included in our current and long-term debt balances as summarized in the table above. |