NOTE 13 – DEBT:

On December 2, 2020, the Company entered into a new revolving credit facility agreement with JPMorgan Chase Bank, N.A. that provides a $22,000 line of credit, expandable at the Company’s option and upon the bank’s approval at any time up to $37,000, including a $7,000 commitment for letters of credit and bank guarantees.  The agreement has a one year term. This facility replaced the previous facility with JPMorgan Chase Bank, N.A.

At the Company’s option, amounts outstanding under the agreement will bear interest at either: (i) a rate equal to the bank’s prime rate; or (ii) a rate equal to LIBOR plus 1.75%.  Amounts available for borrowing under the agreement are subject to an unused commitment fee of 0.375%.

Outstanding letters of credit under the agreement are subject to a fee of 0.75%.  The agreement requires the Company to secure outstanding letters of credit with cash and cash equivalents and investments.

Under the new revolving credit facility, the Company covenants to maintain a maximum funded debt to EBITDA (as defined in the agreement) ratio of 3.5 to 1.0 and a minimum earnings before interest expense and income taxes to interest ratio of 4.0 to 1.0. The agreement also provides that the Company is permitted to pay dividends without limitation if it maintains a maximum funded debt to EBITDA ratio equal to or less than 2.0 to 1.0 and permits the Company to pay dividends in an amount equal to 25% of net income if it maintains a maximum funded debt to EBITDA ratio of greater than 2.0 to 1.0.  The Company was in compliance with all such provisions as of December 31, 2020.

On October 28, 2020, the Company entered into a letter agreement to amend the letter of credit facility agreement with HSBC Bank USA, N.A.  The letter agreement increases the letter of credit facility from $14,000 to $15,000 and requires the Company to secure outstanding letters of credit with cash and cash equivalents and investments.  Outstanding letters of credit under the agreement are subject to a fee of between 0.75% and 0.85%, depending on the term of the letter of credit.

Availability for borrowings and letters of credit was $15,000 and $4,900, respectively, under the JPMorgan Chase Bank, N.A. and HSBC Bank USA, N.A. facilities at December 31, 2020.  At March 31, 2020 availability was $21,672 under the previous facilities.