Lines of Credit |
3 Months Ended |
|---|---|
Mar. 31, 2025 | |
| Debt Disclosure [Abstract] | |
| Lines of Credit | Lines of Credit U.S. Line of Credit On December 16, 2024, we executed an amendment to our Second Amended and Restated Credit Agreement ("Second Amended Credit Agreement") with U.S. Bank National Association ("U.S. Bank"), which provides for a revolving line of credit ("U.S. Credit Line") through April 30, 2026. We expect to renew the U.S. Credit Line prior to its expiration; however, no assurance can be given that future financing will be available or, if available, that we will be offered terms satisfactory to us. The U.S. Credit Line may be used for working capital and other general corporate purposes including acquisitions, share repurchases and capital expenditures. The U.S. Credit Line has a maximum availability up to $75.0 million, subject to meeting certain financial conditions, including an accounts receivable coverage ratio ("AR Ratio"). This AR Ratio is calculated monthly and adjusts the current U.S. Credit Line total availability. At March 31, 2025, the U.S. Credit Line total availability was $56.1 million based upon the AR Ratio. At April 14, 2025, the U.S. Credit Line total availability was $59.1 million based upon the AR Ratio. Amounts available for borrowing under the U.S. Credit Line are reduced by the balance of any outstanding letters of credit, of which there were none at March 31, 2025 and December 31, 2024. All obligations under the U.S. Credit Line are secured by substantially all of our U.S. personal property and tangible and intangible assets, as well as a guaranty of the U.S. Credit Line by our wholly-owned subsidiary, Universal Electronics BV. Under the Second Amended Credit Agreement, we pay interest on the U.S. Credit Line based on the Secured Overnight Financing Rate ("") plus a 3.00% margin. The amendment also contains a facility fee of 0.25%. The interest rate in effect at March 31, 2025 and December 31, 2024 was 7.31%. The Second Amended Credit Agreement includes financial covenants and contains other customary affirmative and negative covenants and events of default. Subsequent to December 31, 2024, our covenants are based upon a minimum fixed charge coverage ratio and a maximum cash flow leverage ratio. We were in compliance with the covenants and conditions of the Second Amended Credit Agreement at March 31, 2025. At March 31, 2025 and December 31, 2024, we had $20.0 million and $26.0 million outstanding under the U.S. Credit Line, respectively. At March 31, 2025, our remaining availability under our U.S. Credit Line was $36.1 million. Our total interest expense on borrowings under the U.S. Credit Line was $0.6 million and $1.3 million during the three months ended March 31, 2025 and 2024, respectively. Our total facility fee expense under the U.S. Credit Line was immaterial during the three months ended March 31, 2025 and 2024, respectively. China Line of Credit On August 29, 2024, our subsidiary, Gemstar Technology (Yangzhou) Co. Ltd. ("GTY"), executed a Line of Credit Agreement (the "Line of Credit Agreement") with the Bank of China, which provides for a revolving line of credit ("China Credit Line") through July 24, 2025. We expect to renew our Line of Credit Agreement with the Bank of China prior to its expiration; however, no assurance can be given that future financing will be available or, if available, that we will be offered terms satisfactory to us. The China Credit Line may be used for working capital purposes. The China Credit Line has a maximum availability up to RMB 80.0 million (approximately $11.0 million), subject to meeting certain financial conditions. Amounts available for borrowing under the China Credit Line are reduced by the balance of any outstanding letters of credit, of which there were none at March 31, 2025 and December 31, 2024. All obligations under the China Credit Line are secured by GTY's buildings and land use rights. Under the Line of Credit Agreement, we pay interest on the China Credit Line based on the one-year rate from the National Interbank Funding Center less a 0.1% margin. There are no associated commitment fees on the China Credit Line. The interest rate in effect at March 31, 2025 and December 31, 2024 was 3.07%. The Line of Credit Agreement includes financial covenants and contains other customary affirmative and negative covenants and events of default. Our covenants are based on a debt to asset ratio and a dividends paid to net income ratio. We were in compliance with the covenants and conditions of the Line of Credit Agreement at and during the three months ended March 31, 2025. At March 31, 2025 and December 31, 2024, we had RMB 80.0 million (approximately $11.0 million) outstanding under the China Credit Line. At March 31, 2025, we had no remaining availability under our China Credit Line. Our total interest expense on borrowings under the China Credit Line was RMB 0.6 million (approximately $0.1 million) during the three months ended March 31, 2025.
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