Long-Term Debt and Credit Agreements

12 Months Ended

Dec. 31, 2012

Long-term debt at December 31, 2012 and 2011 consisted of the following:



	2012		2011
Credit agreement	$	57,814	$	37,800
Senior notes	35,000		35,000
Industrial revenue bonds	—		1,230
	92,814		74,030
Less current portion	—		305
	$	92,814	$	73,725

Under terms of the Credit Agreement with a group of banks, the Company may borrow up to $180 million, reduced for letters of credit issued. As of December 31, 2012, the Company had $116.1 million available under the Credit Agreement. Interest is based on the bank’s Prime rate or Euro dollar rate plus an applicable margin that varies depending on the Company’s ratio of total debt to earnings before interest, taxes, depreciation and amortization. The average interest rate on borrowing under the Credit Agreement was 3.81 percent at December 31, 2012 and 3.25 percent at December 31, 2011 which includes a quarterly facility fee on the used and unused portion. The Credit Agreement expires November 19, 2015.

In December 2003, the Company issued $100 million in Senior Unsecured Notes (the Notes) consisting of $65 million of notes with an interest rate of 6.08 percent and a 7 year maturity and $35 million of notes with an interest rate of 6.81 percent and a 10 year maturity. Proceeds from the issuance of the Notes were used to pay down the term loan and revolving credit facility borrowing outstanding at that time. As of December 31, 2012, the Company has classified the $35 million of Senior Notes due in December 2013 as a long-term liability since it has the intent to refinance the debt on a long-term basis and has demonstrated the ability via capacity available under the non-cancelable revolver feature of our current Credit Agreement. In December 2010, the Company paid the $65 million Senior Notes at maturity with borrowings from the Credit Agreement.

In the fourth quarter of 2012, the Company repaid debt related to industrial revenue bonds for a total of $1.2 million.

As of December 31, 2012, the Company also has $6.0 million of letters of credit issued related to insurance and other financing contracts in the ordinary course of business.

As of December 31, 2012, the Company was in compliance with all its debt covenants associated with its Credit Agreement and Senior Notes. The significant financial covenants include an interest coverage ratio, defined as earnings before interest and taxes divided by interest expense, and a leverage ratio, defined as earnings before interest, taxes, depreciation, and amortization, as adjusted, compared to total debt. The ratios as of December 31, 2012 are shown in the following table:




	Required Level	Actual Level
Interest Coverage Ratio	2.25 to 1 (minimum)	11.46
Leverage Ratio	3.25 to 1 (maximum)	1.14

Maturities of long-term debt under the loan agreements in place at December 31, 2012 are as follows: $35,000 in 2013 (with intent and ability to refinance); $0 in 2014; and $57,814 in 2015.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

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