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Borrowings And Credit Arrangements
9 Months Ended
Mar. 31, 2012
Borrowings And Credit Arrangements [Abstract]  
Borrowings And Credit Arrangements

 

3.       BORROWINGS AND CREDIT ARRANGEMENTS

 

The Company maintains a credit agreement which provides short-term working capital financing of $15.0 million with interest of LIBOR plus 1% with availability of $10.0 million for letters of credit. No amounts were outstanding at March 31, 2012 and June 30, 2011 under the working capital facility. The Company is contingently liable to insurance carriers under its comprehensive general, product, and vehicle liability policies, as well as some workers' compensation, and has provided letters of credit in the amount of $2.5 million. The credit agreement contains financial covenants. The primary covenant is an interest coverage ratio of 3.0 to 1.0. The ratio is computed as net income plus interest expense and stock-based compensation expense less dividends, divided by interest expense. In addition, the Company must maintain working capital of $60 million. At March 31, 2012, the Company was in compliance with all of the financial covenants contained in the credit agreement.

 

An officer of the Company is a director at a bank where the Company maintains an unsecured $8.0 million line of credit at prime minus 1%, but not less than 2.5%, and where its routine daily banking transactions are processed. No amount was outstanding on the line of credit at March 31, 2012 and June 30, 2011. In addition, the Rabbi Trust assets of $6.0 million are administered by this bank's trust department. The Company receives no special services or pricing on the services performed by the bank due to the directorship of this officer.