Long-Term Debt

6 Months Ended

Sep. 30, 2011

Long-Term Debt

Long-Term Debt

Note 7 - Long-Term Debt

Our long-term debt consists of the following:

	September 30,		March 31,
	2011		2011
	(in thousands)
Revolving credit facility –
Acquisition loans	$	—	$	65,000
Working capital loans	50,000		—
Other notes payable	737		1,371
	50,737		66,371
Less - current maturities	40,647		830
Long-term debt	$	10,090	$	65,541

Revolving Credit Facility

We and our subsidiaries have a $330 million credit agreement (the “Credit Agreement”) with a group of banks, consisting of a $130 million working capital facility and a $200 million acquisition facility.  Borrowings under the working capital facility are subject to a defined borrowing base.  In addition, we can elect to reallocate the lesser of up to $75.0 million or the unused portion of our acquisition facility at the request date to our working capital facility up to three times per year.  Subsequent to September 30, 2011, we reallocated $50 million to our working capital facility.  Substantially all of our assets are pledged as collateral under the Credit Agreement.

Borrowings under the Credit Agreement bear interest at designated interest rates depending on the computed “leverage ratio,” which is the ratio of total indebtedness (as defined) at any determination date to consolidated EBITDA for the period of the four fiscal quarters most recently ended.  Interest is payable quarterly.  Interest rates vary at LIBOR plus 2.75% to 3.50% for any LIBOR borrowings, or the bank’s prime rate plus 1.75% to 2.50% for any base rate borrowings (5% at September 30, 2011 for the working capital facility), in each case depending upon the leverage ratio.  We had no LIBOR borrowings at September 30, 2011.  We are also required to pay a 0.375% commitment fee on all undrawn commitments when our leverage ratio is less than or equal to 3.0 to 1.0, otherwise the commitment fee is 0.50%.

Our revolving credit facility further indicates that our “leverage ratio” cannot exceed 4.0 to 1.0 at any quarter end.  At September 30, 2011, our ratio of total funded debt to consolidated EBITDA was .05 to 1.

During the three months and six months ended September 30, 2011, we had a maximum borrowing under our working capital facility of approximately $50 million and an average borrowing of $25.3 million and $15.7 million, respectively.  The weighted average interest rate of our working capital borrowings during the three months and six months ended September 30, 2011 was 5.23% and 5.32%, respectively, and the interest rate at September 30, 2011 was 5%.

The Credit Agreement has a final maturity on October 1, 2016, except for a $30 million portion of the working capital facility that terminates in February 2012.  Once a year, we must prepay the outstanding working capital revolving loans and collateralize outstanding letters of credit in order to reduce the total working capital borrowings to less than $10.0 million for 30 consecutive days.  In May 2011, we repaid the $65.0 million advances under our acquisition facility using the proceeds from our initial public offering (see Note 10).  Subsequent to September 30, 2011, we have borrowed approximately $107 million against our acquisition facility and an additional approximately $91 million against our working capital facility, primarily to fund our business combinations with Osterman and SemStream.

Our revolving credit facility includes customary events of default.  At September 30, 2011, we were in compliance with all debt covenants to our revolving credit facility.  Our revolving credit facility also contains various covenants limiting our ability to (subject to certain exceptions), among other things:

· incur other indebtedness (other than permitted debt as defined in the credit facility);

· grant or incur liens on our property;

· create or incur any contingent obligations;

· make investments, loans and acquisitions;

· enter into a merger, consolidation or sale of assets;

· change the nature of the business or name or place of business of any of the Credit Parties without approval;

· pay dividends or make distributions if we are in default under the revolving credit facility or in excess of available cash; and

· prepay, redeem, defease or otherwise acquire any permitted subordinated debt or make certain amendments to permitted subordinated debt.

Other Notes Payable

The other notes payable of approximately $0.7 million mature as follows (in thousands):

Year Ending March 31,
2012 (six months)	$	195
2013	452
2014	90
	$	737