SUBSEQUENT EVENT |
6 Months Ended |
|---|---|
Sep. 30, 2017 | |
| Subsequent Events [Abstract] | |
| SUBSEQUENT EVENT |
SUBSEQUENT EVENT
As of September 30, 2017, the Company was in violation of financial covenants applicable to the credit facility which constituted an event of default under the terms of the related agreements. On November 6, 2017, the Company entered into an amendment to our credit facility, including amendments to both the revolving credit agreement and the term loan agreement, to provide the Company with an additional $20.0 million through an incremental delayed draw term loan (“IDDTL”) and to retroactively and prospectively modify certain financial covenants. As a result, the covenant violations existing as of September 30, 2017 were cured. The amended credit facility agreements contains customary conditions to borrowings, events of default, restrictions, and positive and negative covenants, described below. Management’s current projections indicate, and management considers it probable, that the Company will be in compliance with covenants applicable under the amended credit facility, and be able to meet its obligations as they become due, for more than twelve months from the date these financial statements were filed. In the event the Company is unable to meet its projected results of operations, it may violate applicable covenants resulting in a default under the revised credit facility agreements, which could adversely impact the Company’s ability to meet its obligations as they come due.
Interest rates for borrowings under the amended revolving credit agreement were adjusted to increase the margin percentages by 0.50% for either option, and interest rates for borrowings under the term loan agreement increased from LIBOR plus 7.50% to LIBOR plus 8.25%.
Financial covenants for both the revolving credit agreement and term loan agreement, including the fixed charge coverage ratio, senior net leverage ratio and total leverage ratio, were amended. The fixed charge coverage ratio multiplier was decreased by 0.25 for all quarters through maturity. The senior net leverage ratio multiplier increases in each quarter from October 1, 2017 through September 30, 2018 ranging from 0.25 to 1.50, and remains unchanged for the subsequent periods through maturity. The total leverage ratio multiplier increases in each quarter from October 1, 2017 through September 30, 2018 ranging from 0.25 to 1.75, and remains unchanged for the subsequent periods through maturity.
The minimum restricted cash requirement under the revolving credit agreement was also amended. Minimum restricted cash set at initial closing remained unchanged at $20.0 million through November 15, 2017, the payment date of the convertible notes, and was decreased to $12.0 million from the convertible notes payment date through June 30, 2018. Subsequent to June 30, 2018 through maturity, the minimum restricted cash requirement will reset each quarter based upon achievement of certain EBITDA targets, to either $12.0 million or $20.0 million. In addition, the one-time minimum liquidity requirement at November 15, 2017 after payment of our 4.50% Notes decreased from $27.0 million to $20.0 million.
Principal outstanding under the IDDTL is payable in equal installments of $1.0 million in each quarter of fiscal 2019, $2.5 million in each quarter of fiscal 2020, with the remaining outstanding balance due on June 30, 2020. In addition, the amended agreement includes certain mandatory prepayment provisions triggered by the sale of indebtedness or issuance of equity securities with certain defined limits on the proceeds to be used to repay the term loans.
In connection with the amendment, the Company incurred aggregate closing and amendment fees of $0.8 million. Additionally, the Company issued warrants to the lenders to purchase 330,000 shares of the Company’s common stock at an exercise price of $0.01 per share. Under the terms of the warrant agreement, warrants to purchase 198,000 shares of the Company’s common stock were exercisable immediately upon issuance and the ability for the warrant holders to exercise the remaining warrants to purchase 132,000 shares of the common stock are contingent upon the occurrence of specified twelve month trailing EBITDA targets and if the IDDTL has not been repaid in full by March 31, 2019.
On November 8, 2017, the Company borrowed $20.0 million under the DDTL and $20.0 million under the IDDTL.
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