Long - Term Debt

9 Months Ended

Sep. 30, 2011

Long-term Debt, Unclassified [Abstract]

LONG-TERM DEBT

Long-term debt consists of the following:



	September 30, 2011		December 31, 2010
Asset-based loan	$	77,000	$	77,000
Less: current maturities	—		—
Long-term debt	$	77,000	$	77,000

On April 27, 2011, we refinanced our revolving credit facility with a group of financial institutions. The amended and restated facility is a five-year asset based loan (the “ABL”) with commitments to lend up to $250,000. The thresholds at which certain covenants and restrictions become effective were lessened in this amended and restated ABL, resulting in additional availability to borrow. Under this amended and restated ABL we are also no longer subject to certain representation requirements regarding our pension underfunded status, for which we previously had obtained a waiver.

The ABL provides for the issuance of letters of credit and cash borrowings, is secured by our accounts receivable, inventory and cash and is guaranteed by all of our domestic subsidiaries. The issuance of letters of credit and cash borrowings are limited by the level of a borrowing base consisting of eligible accounts receivable and inventory.

The amount of the borrowing base above the current level of letters of credit and cash borrowings outstanding represents the total borrowing availability. Certain covenants and restrictions, including cash dominion, weekly borrowing base reporting, and a fixed charge coverage ratio, would become effective if total availability fell below various thresholds. If total availability falls below $42,000, we are subject to cash dominion and weekly borrowing base reporting. If total availability falls below $35,000, we are also subject to the fixed charge coverage ratio, which we currently do not meet. As of September 30, 2011, total availability was $74,341. Therefore, as of September 30, 2011, we have $32,341 of excess availability without being subject to the cash dominion and weekly reporting covenants of the agreement and $39,341 of excess availability before we would be subject to the fixed charge coverage ratio.

We intend to continue to manage our availability to remain above the $42,000 threshold, as we choose not to be subject to the cash dominion and weekly reporting covenants.

The borrowing base is reported on the 25th day of each month based on our financial position at the end of the previous month. Our borrowing base calculations are subject to periodic examinations by the financial institutions which can result in adjustments to the borrowing base and our availability under the ABL. These examinations have not resulted in material adjustments to our borrowing base or availability in the past and are not expected to result in material adjustments in the future.

The interest rate on cash borrowings outstanding under the ABL is either (i) a base rate (the greatest of the prime rate, the Federal Funds Effective Rate plus 1/2%, and the adjusted LIBOR plus 1%) plus a margin ranging from 1.00% to 1.75% or (ii) LIBOR plus a margin ranging from 2.25% to 3.00%. These margins fluctuate with average availability. As of September 30, 2011, loans outstanding were $77,000 with a weighted average interest rate of 3.13%.

Under the terms of the ABL, we are required to comply with certain operating covenants, the most significant of which have been described above. We are currently in compliance with all of these covenants and expect to remain in compliance for the foreseeable future.