Short-Term Borrowings

12 Months Ended

Dec. 31, 2011

Short-Term Borrowings

Short-Term Borrowings

(6)Short-Term Borrowings

We have a $35 million Financing and Security Agreement (the “Credit Agreement”) with a bank that expires on October 31, 2013 with annual renewal options. The Credit Agreement is secured by certain of our assets. The maximum interest rate on the Credit Agreement is the daily LIBOR market index rate plus 2.25%. Based upon our financial performance, the interest rate can be reduced. As of December 31, 2011, the rate was LIBOR plus 1.0%. The Credit Agreement contains covenants with respect to our minimum tangible net worth, total liabilities to tangible net worth ratio and interest coverage ratio. We were in compliance with all loan covenants under the amended Credit Agreement as of December 31, 2011. The Credit Agreement also contains certain restrictive covenants regarding future acquisitions, incurrence of debt and the payment of dividends. The Credit Agreement permits us to repurchase up to a certain dollar amount of our outstanding common stock in the open market. As of December 31, 2011, $5,152,000 was remaining available for future share repurchases under the Credit Agreement.

As of December 31, 2011, there were no borrowings outstanding and $34,542,000 of available borrowings under the Credit Agreement, based upon 80% of eligible accounts receivable and 80% of eligible unbilled receivables.