FINANCING ARRANGEMENTS

3 Months Ended

Mar. 31, 2015

NOTE 3. FINANCING ARRANGEMENTS

We have a credit agreement with Wells Fargo Bank (WFB) which was most recently amended on May 16, 2014 and provides for a line of credit arrangement of $13.5 million that expires, if not renewed, on May 31, 2018. The credit arrangement also has a $1.8 million real estate term note outstanding with a maturity date of March 31, 2027, an additional $1.7 million real estate term note outstanding that is due, if not renewed, on December 31, 2027, an equipment loan for $1.6 million and a new term loan facility of up to $1.0 million for capital expenditures, both with maturity dates of May 31, 2018. As of March 31, 2015, we have borrowed $0.7 million against the $1.0 million capital term note.

Long-term debt at March 31, 2015 and December 31, 2014 consisted of the following:

	March 31		December 31
	2015		2014
Real Estate Term Loan 1, interest at three month LIBOR + 3.0%, due in installments through March 31, 2027	$	1,385,845	$	1,415,461
Real Estate Term Loan 2, interest at three month LIBOR + 3.0%, due in installments through December 31, 2027	1,432,200		1,460,100
Equipment loan, interest at three month LIBOR + 3.0%, due January 31, 2016	79,167		102,917
Equipment loan, interest at three month LIBOR + 3.0%, due May 31, 2018	1,053,372		1,117,863
Equipment loan, interest at three month LIBOR + 3.0%, due May 31, 2018	678,549		349,000
Blue Earth Bond, which bears a variable interest rate, due in installments through June 30, 2021	360,000		360,000
Total debt	4,989,133		4,805,341
Less current maturities	782,912		732,835
Long-term debt	$	4,206,221	$	4,072,506

Under the credit agreement, both the line of credit and real estate term notes are subject to variations in the LIBOR rate. Our line of credit bears interest at three-month LIBOR + 2.5% (approximately 2.75% at March 31, 2015) while our real estate term notes bear interest at three-month LIBOR + 3.0% (approximately 3.25% at March 31, 2015). The weighted-average interest rate on our line of credit was 2.9% and 3.0% for the three months ended March 31, 2015 and 2014, respectively. We had borrowing on our line of credit of $8,942,345 and $7,998,184 outstanding as of March 31, 2015 and December 31, 2014, respectively. The line of credit requires a lock box arrangement; however there are no acceleration clauses that would accelerate the maturity of our outstanding borrowings.

The credit agreement contains certain covenants which, among other things, require us to adhere to regular reporting requirements, abide by annual shareholder dividend limitations, maintain certain financial performance, and limit the amount of annual capital expenditures.

The availability under the line is subject to borrowing base requirements, and advances are at the discretion of the lender. At March 31, 2015, we have net unused availability under our line of credit of approximately $3.2 million. The line is secured by substantially all of our assets.

- 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.

+ References+ Details