Quarterly report pursuant to Section 13 or 15(d)

Short-Term Borrowings

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Short-Term Borrowings
6 Months Ended
Sep. 30, 2018
Debt Disclosure [Abstract]  
Short-Term Borrowings

4. Short-Term Borrowings:

 

On February 12, 2009, we entered into a credit facility (the “Credit Agreement”) with Wells Fargo Bank, National Association (“Wells Fargo”). This credit facility, which was most recently amended in March 2018 (see below) and matures March 31, 2020, contains customary affirmative and negative covenants, including, among other things, covenants requiring us to maintain certain financial ratios and is collateralized by customer accounts receivable and certain other assets of the Company as defined in the Credit Agreement.

 

The Credit Agreement provides for a letter of credit sub-line in an aggregate amount of up to $1.5 million. The Credit Agreement also provides for interest to be calculated on the outstanding principal balance of the revolving loans at the floating 90 day LIBOR rate plus 1.75%. For LIBOR loans, interest will be calculated on the outstanding principal balance of the LIBOR loans at the 30 day LIBOR rate plus 1.75%.

 

On March 14, 2018, we entered into a ninth amendment (the “Ninth Amendment”) to our Credit Agreement. The Ninth Amendment increased the revolving line of credit from $27.5 million to $35.0 million.

 

Under the Credit Agreement, as of September 30, 2018, the interest rate was 3.875% for LIBOR loans and 4.25% for revolving loans, an increase of 0.875% and 1.125%, respectively, as compared with September 30, 2017. At September 30, 2018, we had approximately $1.7 million of cash on hand, $7.0 million of LIBOR loans outstanding, $3.5 million of revolving loans outstanding and $0.4 million outstanding under our letters of credit sub-line under the Credit Agreement, representing approximately 49% of the maximum borrowing capacity under the Credit Agreement based on our “eligible accounts receivable” (as defined in the Credit Agreement) as of such date. As of the close of business October 26, 2018, we had total short term borrowings, net of cash, of approximately $8.3 million, representing approximately 50% of the maximum borrowing capacity under the Credit Agreement based on our “eligible accounts receivable” (as defined in the Credit Agreement) as of such date.

 

We rely on our revolving loan from Wells Fargo which contains a fixed charge covenant and various other financial and non-financial covenants. If we breach a covenant, Wells Fargo has the right to immediately request the repayment in full of all borrowings under the Credit Agreement, unless Wells Fargo waives the breach. For the six months ended September 30, 2018, we were in compliance with all covenants under the Credit Agreement.