DEBT |
3 Months Ended |
|---|---|
Jun. 30, 2016 | |
| Debt Disclosure [Abstract] | |
| DEBT |
DEBT
On April 15, 2016, our credit agreement with Wells Fargo (as amended, the "WF credit agreement") was amended to modify the maturity date, increase the excess availability requirement over time and reduce the maximum amount of intellectual property assets that may be included in the borrowing base over time.
Under the WF credit agreement, we have the ability to borrow the lesser of $75 million or the amount of the monthly borrowing base under a senior secured revolving credit facility, which matures August 10, 2017. As of June 30, 2016, we had a $61.8 million outstanding balance on the line of credit at a weighted average interest rate of 3.13%. In addition, as of June 30, 2016, we had letters of credit totaling $1.0 million and an excess availability requirement of $6.5 million, reducing the maximum amount available to borrow to $5.7 million. Quarterly, we are required to pay a 0.375% commitment fee on undrawn amounts under the revolving credit facility.
The WF credit agreement contains financial covenants and customary events of default for such securities, including cross-payment default and cross-acceleration to other material indebtedness for borrowed money which require notice from the trustee or holders of at least 25% of the notes and are subject to a cure period upon receipt of such notice. Average liquidity must exceed $15 million each month, and at all times we must maintain minimum liquidity of $10 million, at least $5 million of which must be excess availability under the WF revolving credit facility. The excess availability requirement increased by $1.5 million on June 1, 2016, and will continue to increase on the first day of each September, December, March and June occurring thereafter. The fixed charge coverage ratio is required to be greater than 1.2 for the 12 month period ending on the last day of any month in which the covenant is applicable. This covenant is applicable only in months in which borrowings exceed $5 million at any time during the month. To avoid triggering mandatory field audits and Wells Fargo controlling our cash receipts, we must maintain liquidity of at least $20 million at all times. The fixed charge coverage ratio, average liquidity, liquidity and excess availability are each defined in the WF credit agreement and/or amendments. Certain schedules in the compliance certificate must be filed monthly if borrowings exceed $5 million or if a default has occurred and is continuing; otherwise they are to be filed quarterly. As of June 30, 2016 and during the first quarter of fiscal 2017, we were in compliance with all covenants.
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