(14) Long-Term Debt — The Company entered into an Amended and Restated Credit Agreement (“Credit Agreement”) with Wells Fargo to finance a portion of the consideration to acquire Amcom. The Credit Agreement provides for a maximum term loan amount of $42.5 million and a maximum revolver amount of $10.0 million. Both the term loan and revolver are subject to mandatory repayments commencing on June 30, 2011 with full repayment of both the term loan and revolver by September 3, 2014. The debt is secured by a lien on substantially all of the existing assets, interests in assets and proceeds owned or acquired by the Company. During the three months ended June 30, 2011, the Company repaid $14.1 million of its debt obligation of which $3.1 million was a mandatory repayment. As of June 30, 2011 the total debt outstanding was $37.8 million. The Company also had outstanding a letter of credit of $0.6 million in support of a customer which was released in July 2011.

Both the term loan and revolver are subject to variable interest rates. The Company may elect to pay interest at:

1. the LIBOR Rate (as defined in the Credit Agreement) plus 3.75% or

2. the Base Rate (as defined in the Credit Agreement) plus 3.75%.

The LIBOR Rate is defined as the greater of (a) 1.5% or (b) the published rate per annum for LIBOR from a designated reporting service. The Base Rate means the greatest of (a) 2.5% per annum, (b) the Base LIBOR Rate (as defined), (c) the Federal Funds rate plus 1/2%, or (d) Wells Fargo’s announced prime rate.

The Company may make a LIBOR Rate election for any amount of its debt for a period of 1, 2 or 3 months at a time; however, the Company may not have more than 5 individual LIBOR Rate loans in effect at any given time. The Company may only exercise the LIBOR Rate election for an amount of at least $1.0 million.

As of June 30, 2011 the Company has elected the LIBOR Rate option and owes interest on its outstanding debt at 5.25% (the LIBOR Rate floor of 1.5% plus 3.75%). Based on currently prevailing interest rates the Company expects that it will continue to elect the LIBOR Rate option for amounts outstanding under the Credit Agreement.

The Company is exposed to changes in interest rates, primarily as a result of using bank debt to finance its acquisition of Amcom. The floating interest rate debt exposes the Company to interest rate risk, with the primary interest rate exposure resulting from changes in the LIBOR Rate should the LIBOR Rate exceed the floor of 1.5%. As of June 30, 2011, the Company has no derivative financial instruments outstanding to manage its interest rate risk.

The table below presents principal cash flows and related interest rates by year of maturity of the Company’s debt.


	(Dollars in thousands)

Revolving Loan at LIBOR with a minimum rate of 1.5% and margin rate of 3.75%. Interest rate at June 30, 2011 of 5.25%.
Due Through June 30, 2012	$	3,750
Thereafter		4,447

Total Revolver		8,197

Term Loan at LIBOR with a minimum rate of 1.5% and margin rate of 3.75%. Interest rate at June 30, 2011 of 5.25%.
Due Through June 30, 2012		8,125
Due Through June 30, 2013		9,375
Due Through June 30, 2014		7,500
Thereafter⁽¹⁾		4,625

Total Term Loan		29,625

Total debt outstanding at June 30, 2011	$	37,822


⁽¹⁾		The maturity date for the Term Loan is September 3, 2014.