| LINE OF CREDIT
On June 9, 2017, we entered into a $40.0 million credit agreement with Whitney Bank, as lender (the “New Credit Facility”). The New Credit Facility matures June 9, 2019, and may be used for issuing letters of credit and/or general corporate and working capital purposes. Interest on drawings under the New Credit Facility may be designated, at our option, as either Base Rate (as defined in the New Credit Facility) or LIBOR plus 2.0% per annum. Unused commitment fees on the undrawn portion of the facility and the letter of credit fee on undrawn stated amounts under letters of credit issued by the lenders are 0.4% per annum and 2.0% per annum, respectively. The New Credit Facility is secured by substantially all of our assets (other than the assets of Gulf Marine Fabricators, L.P., which are currently held for sale).
We must comply with the following financial covenants each quarter during the term of the facility:
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i. |
ratio of current assets to current liabilities of not less than 1.25:1.00;
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ii. |
minimum tangible net worth requirement of at least the sum of: |
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b) |
an amount equal to 50% of consolidated net income for each fiscal quarter ending after June 30, 2017 (with no deduction for a net loss in any such fiscal quarter except for any gain or loss in connection with the sale of assets by Gulf Marine Fabricators, L.P.), plus
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c) |
100% of all net proceeds of any issuance of any stock or other equity after deducting of any fees, commissions, expenses and other costs incurred in such offering; and
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iii. |
ratio of funded debt to tangible net worth of not more than 0.50:1.00.
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Concurrent with our execution of the New Credit Facility, we terminated our prior credit facility with JPMorgan Chase Bank, N.A. At the time of the termination, there was approximately $4.6 million of letters of credit outstanding, all of which was temporarily cash collateralized by us.
At June 30, 2017, no amounts were outstanding under the New Credit Facility. Subsequent to June 30, 2017, we were able to reissue new letters of credit under the New Credit Facility for the same amount which have been accepted by the beneficiaries and the corresponding amount of cash collateral has been released. As of June 30, 2017, we were in compliance with all of our covenants.
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