| Debt | 6. Debt The following table sets forth our outstanding
debt as of the periods presented (in thousands):
March 31, December 31,
2017 2016
Revolving credit facility, LIBOR plus 1.50%, maturing in March 2021 $ 120,634 $ 107,396
Note payable, LIBOR plus 1.50%, maturing in March 2021 — 8,293
Note payable, LIBOR plus 1.50%, maturing in March 2021 12,374 1,392
Note payable, greater of 2% or LIBOR plus 2.15%, maturing in April 2022 4,552 (1) 4,601 (1)
Note payable, LIBOR plus 2.25%, maturing in January 2022 4,079 4,137
Notes payable, 4.12%, 4.33% and 4.60%, maturing in March 2017 — 525
Note payable, LIBOR plus 2.25%, maturing in January 2020 7,030 7,107
Note payable, Prime plus 0.375% or LIBOR plus 2.375%, maturing in November 2017 8,012 8,113
Other note payable, maturing in August 2018 350 351
Total 157,031 141,915
Less: Total current debt 135,700 123,165
Total non-current debt $ 21,331 $ 18,750
(1) This note payable, related to the Irvine Property, has been presented on our Condensed Consolidated Balance Sheet as “Note payable related to asset held for sale” and is included as current debt. See Note 4 above for more information regarding the Irvine Property. The following table sets forth the maturities
of our outstanding debt balance as of March 31, 2017 (in thousands):
Remainder of 2017 2018 2019 2020 2021 Thereafter Total
Total long-term debt obligations $ 14,660 $ 2,327 $ 8,507 $ 2,018 $ 5,011 $ 3,874 $ 36,397
Revolving credit facility 120,634 — — — — — 120,634
Total $ 135,294 $ 2,327 $ 8,507 $ 2,018 $ 5,011 $ 3,874 $ 157,031 Line of Credit and Related Notes We maintain a credit facility, which
functions as a working capital line of credit with a borrowing base of inventory and accounts receivable, including certain credit
card receivables, and a portion of the value of certain real estate. On January 19, 2016, we entered into a Fourth Amended and
Restated Loan and Security Agreement (the “Fourth Amended Loan Agreement”) with certain lenders and Wells Fargo Capital
Finance, LLC as administrative and collateral agent (the “Lenders”). On July 7, 2016, we entered into a First Amendment
to the Fourth Amended Loan Agreement (the “First Amendment”) with the Lenders and on February 24, 2017, we entered
into a Second Amendment to the Fourth Amended Loan Agreement (the “Second Amendment”) with the Lenders. As amended to date, the terms of our
credit facility provide for (i) a Maximum Credit, as defined in the credit facility, of $345,000,000; (ii) a sub-line of up to
C$40,000,000 as the Canadian Maximum Credit ((i) and (ii) collectively the “Revolving Line”); (iii) a Maturity Date
of March 19, 2021; (iv) interest on outstanding balance under the Canadian Maximum Credit based on the Canadian Base Rate (calculated
as the greater of CDOR plus one percentage point and the “prime rate” for Canadian Dollar commercial loans, as further
defined in the Fourth Amended Loan Agreement) or at the election of the Borrowers, based on the CDOR Rate, plus a margin, depending
on average excess availability under the Revolving Line, ranging from 1.50% to 1.75%; and (v) interest on outstanding balance under
the Maximum Credit based on the Eurodollar Rate plus a margin, depending on average excess availability
under the revolving line, ranging from 1.50% to 1.75%. The credit facility is collateralized
by substantially all of our assets. In addition to the security interest required by the credit facility, certain of our vendors
have security interests in some of our assets related to their products. The credit facility has as its single financial covenant
a minimum fixed charge coverage ratio (FCCR) requirement in the event an FCCR triggering event has occurred. An FCCR triggering
event is comprised of maintaining certain specified daily and average excess availability thresholds. In the event the FCCR covenant
applies, the fixed charge coverage ratio is 1.0 to 1.0 calculated on a trailing four-quarter basis as of the end of the last quarter
immediately preceding such FCCR triggering event date. At March 31, 2017, we were in compliance with our financial covenant under
the credit facility. Loan availability under the line of credit
fluctuates daily and is affected by many factors, including eligible assets on-hand, opportunistic purchases of inventory and availability
and our utilization of early-pay discounts. At March 31, 2017, we had $115.5 million available to borrow for working capital advances
under the line of credit. In connection with, and as part of, our
revolving credit facility, we maintain sub-line with a limit of $12.5 million secured by our properties located in Santa Monica,
California and has a monthly principal amortization of $149,083. Also on July 7, 2016, we entered into
a Credit Agreement with Castle Pines Capital LLC (“Castle Pines”), which provides for a credit facility (“Channel
Finance Facility”) to finance the purchase of inventory from a list of approved vendors. The aggregate availability under
the Channel Finance Facility is variable and discretionary, but has initially been set at $35 million. Each advance under the Channel
Finance Facility will be made directly to an approved vendor and must be repaid on the earlier of (i) the payment due date as set
by Castle Pines or (ii) the date (if any) when the inventory is lost, stolen or damaged. No interest accrues on advances paid on
or prior to payment due date. The Channel Finance Facility is secured by a lien on certain of our assets, subject to an intercreditor
arrangement with the Lenders. The Channel Finance Facility has an initial term of one year, but shall be automatically renewed
for one year periods from year to year thereafter unless terminated earlier by either party within reasonable notice periods. Other Notes Payable In March 2015, we completed the purchase
of real property in Irvine, California for approximately $5.8 million and financed $4.9 million with a long-term note. The loan
agreement provides for a seven-year term and a 25 year straight-line, monthly principal repayment amortization period that began
on May 1, 2015 with a balloon payment at maturity in April 2022. The loan is secured by the real property and contains financial
covenants substantially similar to those of our existing asset-based credit facility. In September 2015, we listed the Irvine Property
for sale. In January 2015, we completed the purchase
of certain real property in Lewis Center, Ohio for approximately $6.6 million and financed $4.575 million with a long-term note.
The $4.575 million term note provides for a seven-year term and a 25 year straight-line, monthly principal repayment amortization
period that began in February 2015 with a balloon payment at maturity in January 2022. The loan is secured by the real property
and contains financial covenants substantially similar to those of our existing asset-based credit facility. Throughout 2014, we entered into three
financing arrangements with a bank to finance the costs of equipment, software and professional services related to our ERP upgrade.
The total amount financed was $5.6 million, with a quarterly repayment schedule which matured in March 2017. In December 2012, we completed the purchase
of 7.9 acres of land for approximately $1.1 million and have incurred additional costs of $12.2 million through December 31, 2014
towards the construction of a new cloud data center that we opened in June 2014. In July 2013, we entered into a loan agreement
for with a bank for draws up to $7.725 million to finance the build out of the new data center. The loan agreement provides for
a five-year term and a 25 year straight-line, monthly principal repayment amortization period with a balloon payment at maturity
in January 2020. The loan is secured by the real property and contains financial covenants substantially similar to those of our
existing asset-based credit facility. In June 2011, we entered into a credit
agreement to finance a total of $10.1 million of the acquisition and improvement costs for the real property we purchased in March
2011 in El Segundo, California. The credit agreement provides for a five-year term and a 25 year straight-line, monthly principal
repayment amortization period with a balloon payment at maturity in September 2016. In August 2016, we entered into an amendment
with the lender extending the term of the loan to November 30, 2017. The loan is secured by the real property and contains financial
covenants substantially similar to those of our existing asset-based credit facility. At March 31, 2017, the effective weighted
average annual interest rate on our outstanding amounts under the credit facility, term note and variable interest rate notes payable
was 2.58%. The carrying amounts of our line of credit
borrowings and notes payable approximate their fair value based upon the current rates offered to us for obligations of similar
terms and remaining maturities. |
