Quarterly report pursuant to Section 13 or 15(d)

Long Term Debt

v3.22.1
Long Term Debt
6 Months Ended
Mar. 31, 2022
Debt Disclosure [Abstract]  
Long Term Debt

Note 8: Long-Term Debt

Long-term debt as of March 31, 2022 and September 30, 2021 consisted of the following (in $000's):

 

 

 

March 31, 2022

 

 

September 30, 2021

 

Bank of America Revolver Loan

 

$

3,729

 

 

$

 

Encina Business Credit Revolver Loan

 

 

 

 

 

12,735

 

Texas Capital Bank Revolver Loan

 

 

8,594

 

 

 

8,794

 

Fifth-Third Bank Revolver

 

 

14,094

 

 

 

 

Fifth-Third Bank Term Loan

 

 

3,417

 

 

 

 

Encina Business Credit Term Loan

 

 

 

 

 

1,319

 

Note Payable to the Sellers of Vintage Stock

 

 

 

 

 

4,200

 

Note #3 Payable to Banc of America Leasing & Capital LLC

 

 

1,039

 

 

 

1,320

 

Note #4 Payable to Banc of America Leasing & Capital LLC

 

 

319

 

 

 

406

 

Note #5 Payable to Banc of America Leasing & Capital LLC

 

 

1,699

 

 

 

1,985

 

Note #6 Payable to Banc of America Leasing & Capital LLC

 

 

545

 

 

 

618

 

Note #7 Payable to Banc of America Leasing & Capital LLC

 

 

3,834

 

 

 

4,121

 

Note #8 Payable to Banc of America Leasing & Capital LLC

 

 

2,724

 

 

 

2,943

 

Note #9 Payable to Banc of America Leasing & Capital LLC

 

 

5,274

 

 

 

 

Note Payable to Extruded Fibers

 

 

 

 

 

700

 

Note Payable to the Sellers of Precision Marshall

 

 

2,500

 

 

 

2,500

 

Note Payable to Store Capital Acquisitions, LLC

 

 

9,202

 

 

 

9,209

 

Note payable to individuals, interest at 10-11% per annum, payable on a 90 day written notice,
   
unsecured

 

 

207

 

 

 

207

 

Note payable to individual, interest at 10% per annum, payable on a 90 day
   written notice,
unsecured

 

 

500

 

 

 

500

 

Note payable to individual, noninterest bearing, monthly payments of $19 through March 2023

 

 

306

 

 

 

472

 

Note payable to individuals, interest at 7% per annum, unsecured

 

 

198

 

 

 

198

 

Note payable RSSI/(VSSS)

 

 

130

 

 

 

130

 

Note Payable to JCM Holdings

 

 

1,746

 

 

 

1,833

 

Total notes payable

 

 

60,057

 

 

 

54,190

 

Less unamortized debt issuance costs

 

 

(666

)

 

 

(576

)

Net amount

 

 

59,391

 

 

 

53,614

 

Less current portion

 

 

(20,032

)

 

 

(16,055

)

Total long-term debt

 

$

39,359

 

 

$

37,559

 

 

 

Future maturities of long-term debt at March 31, 2022, are as follows which does not include related party debt separately stated (in $000's):

 

Twelve months ending March 31,

 

 

 

2023

 

$

20,162

 

2024

 

 

4,161

 

2025

 

 

3,642

 

2026

 

 

2,969

 

2027

 

 

19,048

 

Thereafter

 

 

10,075

 

Total future maturities of long-term debt

 

$

60,057

 

 

Bank of America Revolver Loan

On January 31, 2020, Marquis entered into an amended $25.0 million revolving credit agreement (“BofA Revolver”) with Bank of America Corporation (“BofA”). The BofA Revolver is a five-year, asset-based facility that is secured by substantially all of Marquis’ assets. Availability under the BofA Revolver is subject to a monthly borrowing base calculation. Marquis’ ability to borrow under the BofA Revolver is subject to the satisfaction of certain conditions, including meeting all loan covenants under the credit agreement with BofA. As of March 31, 2022, the outstanding balance was approximately $3.7 million.

Loans with Encina Business Credit, LLC

On July 14, 2020, Precision Marshall entered into a Loan and Security Agreement (the “Loan Agreement”) with Encina Business Credit, LLC, as Agent (the “Agent”). The Loan Agreement provides for secured revolving loans (the “Encina Revolver Loans”) in a principal amount not to exceed the lesser of (i) $23.5 million and (ii) a borrowing base equal to the sum of (a) 85% of Precision's eligible accounts receivable, plus (b) 85% of Precision's eligible inventory, subject to an eligible inventory sublimit that begins at $14.0 million and declines to $12.0 million during the term of the Loan Agreement, minus (c) customary reserves. The Encina Revolver Loans mature on July 14, 2023. On January 20, 2022, the Precision Marshall refinanced these loans with Fifth-Third Bank (see below). The refinanced credit facility, totaling $29 million, is comprised of $23.0 million in revolving credit, $3.5 million in machinery and equipment (“M&E”) lending, and $2.5 million for capital expenditure (“Capex”) lending.

Loan with Fifth Third Bank

On January 20, 2022, Precision Marshall refinanced its Encina Business Credit loans with Fifth Third Bank (see above), and the balance outstanding was repaid. The refinanced credit facility, totaling $29 million, is comprised of $23.0 million in revolving credit, $3.5 million in M&E lending, and $2.5 million for capital Capex lending. Advances under the new credit facility will bear interest at the 30-day SOFR plus 200 basis points for lending under the revolving facility, and 30-day SOFR plus 225 basis points for M&E and Capex lending (Effective December 31, 2021, SOFR replaced the USD LIBOR for most financial benchmarking). The refinancing of the Borrower’s existing credit facility reduces interest costs and improves the availability and liquidity of funds by approximately $3.0 million at the close. The facility terminates on January 20, 2027, unless terminated earlier in accordance with its terms. As of March 31, 2022, the outstanding balance on the revolving loan was approximately $14.1 million, and the outstanding balance on the term note was approximately $3.4 million.

Texas Capital Bank Revolver Loan

On November 3, 2016, Vintage Stock entered into an amended $12.0 million credit agreement with Texas Capital Bank (“TCB Revolver”). The TCB Revolver is a five-year, asset-based facility that is secured by substantially all of Vintage Stock’s assets. Availability under the TCB Revolver is subject to a monthly borrowing base calculation. The TCB Revolver matures, as amended September 30, 2020, on November 3, 2023. As of March 31, 2022, the balance outstanding was approximately $8.6 million.

Note payable to JCM Holdings

During October 2020, Marquis purchased a manufacturing facility for $2.5 million. Marquis had previously been leasing this facility. Additionally, Marquis entered into a $2.0 million note in favor of the seller of the facility for the balance of the purchase price, which note is secured by the facility. The note bears interest at 6%, and matures in January 2030. Principal and interest payments are due monthly, and the note is fully amortized at maturity. As of March 31, 2022, the remaining principal balance was approximately $1.7 million.

Equipment Loans

On June 20, 2016 and August 5, 2016, Marquis entered into a transaction that provided for a master agreement and separate loan schedules (the “Equipment Loans”) with Banc of America Leasing & Capital, LLC that provided for the following during the six months ended March 31, 2022:

In December 2021, Marquis funded the acquisition of $5.5 million of new equipment under note #9 of its master agreement. The note, which is secured by the equipment, matures December 2026, and is payable in 60 monthly installments of $92,000 beginning January 2022, bearing interest at 3.75%.

Loan Covenant Compliance

As of March 31, 2022, the Company was in compliance with all covenants under its existing revolving and other loan agreements.