Debt

6 Months Ended

Jun. 30, 2011

Debt [Abstract]

Debt

8. Debt

The Company’s existing senior credit facility, as amended in December 2010 consists of a revolving line of credit with a principal amount of up to $125.0 million, which includes a swingline facility with an original principal amount of up to $8.0 million. The credit facility also has a $50.0 million accordion feature allowing us to increase our borrowing capacity to up to $175.0 million, subject to obtaining commitments for the incremental capacity from existing or new lenders. The outstanding borrowings are collateralized by a security interest in substantially all the Company’s assets. The lenders also require a direct assignment of all contracts at the lenders’ discretion. The outstanding balance under the credit facility accrues interest based on LIBOR plus an applicable margin, ranging from 200 to 300 basis points, based on the ratio of outstanding senior debt to Earnings before Interest, Taxes, Depreciation, and Amortization (EBITDA) adjusted for acquisitions. The credit facility expires on December 13, 2014.

The credit facility contains various restrictive covenants that, among other things, restrict the Company’s ability to: incur or guarantee additional debt; make certain distributions, investments and other restricted payments, including cash dividends on the Company’s outstanding common stock; enter into transactions with certain affiliates; create or permit certain liens; and consolidate, merge, or sell assets. In addition, the credit facility contains certain financial covenants that require the Company to: maintain a minimum tangible net worth; maintain a minimum fixed charge coverage ratio and a minimum funded debt to earnings ratio; and limit capital expenditures below certain thresholds.

The previous credit facility (the “2006 Credit Facility”) provided for a revolving line of credit with a principal amount of up to $90.0 million, which included a swingline facility with an original principal amount of up to $5.0 million. The 2006 Credit Facility contained similar restrictive covenants and the outstanding borrowings were collateralized by a security interest in substantially all the Company’s assets. The outstanding balance of the facility accrued interest based on LIBOR plus an applicable margin, ranging from 100 to 175 basis points, based on a ratio of funded debt to earnings.

During the second quarter of 2011, NCI had a weighted average outstanding loan balance of $80.9 million which accrued interest at a weighted average borrowing rate of 2.2%. During the second quarter of 2010, NCI had a weighted average outstanding loan balance of $28.3 million which accrued interest at a weighted average borrowing rate of 1.4%. During the first six months of 2011, NCI had a weighted average outstanding loan balance of $50.4 million which accrued interest at a weighted average borrowing rate of approximately 2.2%. During the first six months of 2010, NCI had a weighted average outstanding loan balance of $33.5 million which accrued interest at a weighted average borrowing rate of approximately 1.3%. As of June 30, 2011 and December 31, 2010, the Company was in compliance with all its loan covenants.