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Credit Arrangements
6 Months Ended
Dec. 31, 2012
Credit Arrangements [Abstract]  
Credit Arrangements

 

3.   BORROWINGS AND CREDIT ARRANGEMENTS

 

The Company maintains a credit agreement which provides short-term working capital financing up to $15.0 million with interest of LIBOR plus 1%, including $5.0 million of letters of credit availability. This credit agreement expires June 30, 2013. No amounts were outstanding at December 31, 2012 and June 30, 2012 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 $2.3 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 $60.0 million. At December 31, 2012, the Company was in compliance with all of the financial covenants contained in the credit agreement.