Nautilus said that on July 20 it amended its credit agreement to ease the restrictiveness of certain provisions by increasing the borrowing availability, raising the limitation on capital expenditures and reducing interest rates applicable to outstanding borrowings.
Under the agreement, Bank of the West provides the company with up to $15.0 million in revolving credit, which is available for working capital, standby letters of credit and general corporate purposes through August 31, 2012. Borrowing availability under the agreement is subject to the company’s compliance with certain financial and operating covenants at the time borrowings are requested, and calculation of the company’s eligible base of assets against which borrowings under the agreement are secured. The interest rate applicable to borrowings under the agreement is based on Bank of the West’s base rate or LIBOR, plus an applicable margin based on the company’s eligible borrowing base. The Amendment, dated effective as of June 30, 2011, increases the amount of eligible accounts receivable for calculating the borrowing base.
Specifically, the Amendment (i) permits up to 40 percent of total accounts receivable included in the borrowing base to consist of receivables of a specific customer, an increase from the prior limitation of 25 percent; and (ii) permits accounts receivable of certain customers granted extended payment terms to be included in the borrowing base, subject to certain conditions and limitations.
In addition, the company and Bank of the West agreed to increase the limitation on the company’s capital expenditures permitted in any one calendar year from $1,500,000 to $3,000,000, and to reduce the interest rate margins applied to outstanding borrowings under the agreement.
