CREDIT FACILITIES

3 Months Ended

Jun. 30, 2011

CREDIT FACILITIES

CREDIT FACILITIES

5.   CREDIT FACILITIES

The Company had in place a Loan and Security Agreement with Silicon Valley Bank which provided a $30.0 million facility to support routine letters of credit and working capital needs.  This Loan and Security Agreement expired on November 12, 2010 and the Company decided not to renew this facility given the cash flows provided from operations and the Company’s available cash and investments balance.

In the normal course of business, the Company may provide certain customers and potential customers with performance guarantees, which are generally backed by standby letters of credit. In general, the Company would only be liable for the amount of these guarantees in the event of default in the performance of its obligations; the probability of which management believes is low.  As of June 30, 2011, the Company had outstanding $26,677,000 in standby letters of credit.  During the quarter ended June 30, 2011, the Company’s bank reduced the collateral requirement on these standby letters of credit.  These outstanding standby letters of credit are now cash-secured at amounts ranging from 52.5% to 55% of the outstanding letters of credit.  This resulted in a restricted cash balance of $14,075,000 at June 30, 2011 of which $2,000,000 was considered long-term restricted cash due to the expiration date of the underlying letters of credit.