Note 8 - Long-Term Debt

12 Months Ended

Mar. 31, 2014

Debt Disclosure [Abstract]

Debt Disclosure [Text Block]

8. LONG-TERM DEBT

Long-term debt consists of the following:

	March 31,
	2014		2013
Revolving loans	$	29,976	$	4,700
Term loan		10,136		48,000
Total outstanding	$	40,112	$	52,700
Less: current portion		40,112		1,370
Total long-term debt	$	-	$	51,330

On May 17, 2013, the Company entered into a credit agreement (the “New Credit Agreement”), among the Company, as borrower and Wells Fargo Bank, National Association, as administrative agent and lender.  The New Credit Agreement provides for a maximum borrowing capacity of $65,000 consisting of the following loans: (1) a $11,505 secured term loan (the “Term Loan”) fully drawn by the Company on May 17, 2013, (2) $5,000 in unsecured delayed draw term loans (collectively, the “Delayed Draw Term Loans”) and (3) up to $53,495 in revolving loans (collectively, the “Revolving Loans”), which may be reduced by the amount of any outstanding Delayed Draw Term Loans drawn by the Company.  The proceeds from the New Credit Agreement were used to repay the Prior Credit Agreement (as described below).  This repayment took place on June 2, 2014 commensurate with the completion of the divestiture of the Patient Care business unit.  Consequently, the entire outstanding balance has been classified as current on our balance sheet as of March 31, 2014.

The Revolving Loans will be used to finance the working capital needs and general corporate purposes of the Company and for permitted acquisitions.  The Term Loan and Revolving Loan mature on May 17, 2018.  The commitments with respect to the Delayed Draw Term Loans terminate on May 17, 2015 and any Delayed Draw Term Loans drawn by the Company also mature on May 17, 2015.  The Term Loan amortizes in consecutive monthly installments, each in the principal amount of $137, commencing June 1, 2013.  Any Delayed Draw Term Loan drawn by the Company will amortize in consecutive monthly installments, each in the principal amount equal to the result of (1) the original principal amount of such Delayed Draw Term Loan divided by (2) the number of months remaining from the date the Delayed Draw Term Loan was drawn until May 17, 2015.  Any undrawn commitments under the Delayed Draw Term Loans will be reduced by $208 on each calendar month, commencing June 1, 2013.

In the event the outstanding principal amount of the Term Loan exceeds the sum of (1) a specified percentage of the value of real property (calculated at least twice during the term of the New Credit Agreement) and (2) a specified percentage of the value of equipment (calculated at least once per calendar year), we will be required to prepay the excess.  The Revolving Loans are subject to a borrowing base such that the total outstanding Revolving Loans may not exceed specified percentages of the value of eligible receivables and finished goods, raw materials, work-in-process and in-transit inventory, all calculated at least monthly.  In the event the outstanding principal amount of Revolving Loans under the New Credit Agreement exceeds this borrowing base, the Company will be required to prepay the excess.

 Term Loans outstanding under the New Credit Agreement bear interest at a rate per annum equal to, at the election of the Company, (1) LIBOR Rate (as defined in the New Credit Agreement) plus a margin ranging from 2.50% to 3.00%, depending on the Average Access Availability (as defined in the New Credit Agreement) at the time of calculation, or (2) Base Rate (as defined in the New Credit Agreement) plus a margin ranging from 1.50% to 2.00%, depending on the Average Access Availability at the time of calculation.  Revolving Loans outstanding under the New Credit Agreement will bear interest at a rate per annum equal to, at the election of the Company, (i) LIBOR Rate plus a margin ranging from 2.00% to 2.50%, depending on the Average Access Availability at the time of calculation, or (ii) Base Rate plus a margin ranging from 1.00% to 1.50%, depending on the Average Access Availability at the time of calculation.  Additionally, the Company is required to pay an unused line fee at a rate per annum ranging from 0.375% to 0.50% on the daily unused amount of the Revolving Loan commitments of the Lender during the period for which the payment is made, payable monthly in arrears.  If drawn, Delayed Draw Term Loans outstanding under the New Credit Agreement will bear interest at a rate per annum equal to, at the election of the Company, (1) LIBOR Rate plus a margin ranging from 4.25% to 4.75%, depending on the Average Access Availability at the time of calculation, or (2) Base Rate plus a margin ranging from 3.25% to 3.75%, depending on the Average Access Availability at the time of calculation. 

During fiscal 2014, the average interest rate on the Term Loan under the New Credit Agreement approximated 2.86% and the average interest rate on the Revolving Loans under the New Credit Agreement approximated 3.22%.

Borrowings under the New Credit Agreement are collateralized by substantially all the assets of, and are fully guaranteed by, the Company and its subsidiaries.  The New Credit Agreement contains certain restrictive covenants, including, among others, covenants limiting our ability to incur indebtedness, grant liens, guarantee obligations, sell assets, make loans and investments, enter into merger and acquisition transactions, and declare or make dividends.  The Company committed to certain post-closing conditions, including providing monthly financial statements, annual updates of financial projections, and the filing of a mortgage on the Company’s Brentwood, New York corporate headquarters.  If the Company’s Excess Availability (as defined in the New Credit Agreement) falls below a specified amount, the Company will become subject to financial covenants relating to a minimum fixed charge coverage ratio of 1.00 to 1.00, measured on a month-end basis.  If the Company draws a Delayed Draw Term Loan, the Company will be required to comply with a maximum leverage financial ratio covenant ranging from 3:00 to 1:00 to 3.25 to 1:00, measured on a month-end basis.

On June 2, 2014, the Company entered into the First Amendment to Credit Agreement and Guaranty and Security Agreement (the “Amendment”), among the Company, as borrower, and Wells Fargo Bank, National Association, as administrative agent and lender (the “Lender”).

The Amendment amended the terms of the New Credit Agreement that the Company entered into with the Lender on May 17, 2013, as follows: (a) the Lender’s maximum total loan commitments under the Credit Agreement were reduced from $65,000 to $55,000, (b) provided no Event of Default (as defined in the Credit Agreement) occurs and is continuing, the unused line fee (the “Unused Line Fee”) that the Company is required to pay the Lender, has been capped at 0.375% of the daily unused amount of the revolving loan commitments of the Lender during the period for which the payment is made, through and including December 31, 2014, and (c) solely for purposes of calculating the Unused Line Fee, the aggregate amount of the Lender’s revolving loan commitments was deemed to be the lesser of $30,000 and the actual aggregate amount of the Lender’s revolving loan commitments.

As a result of the Transaction, the Company repaid all amounts outstanding on both the Revolving and Term loans under the New Credit Agreement subsequent to year end and has recorded all amounts due related to the New Credit Agreement as current as of March 31, 2014.

The Company had unamortized financing costs of $1,068 and $879 in other assets, net as of March 31, 2014 and 2013, respectively.  Of the amount at March 31, 2014, approximately $216 is related to the Term Loan and, as a result of the Transaction, will be charged to interest expense during the three months ending June 30, 2014.  The remaining balance represents costs associated with the Revolving Loans and will be amortized over the remaining life of the New Credit Agreement using the straight-line interest method.

On June 7, 2012, the Company entered into the Second Amended and Restated Credit Agreement (the “Prior Credit Agreement”) with certain lenders and JPMorgan Chase Bank, N.A. acting as administrative agent for the lenders. The Prior Credit Agreement provided the Company with total borrowings of up to $76,000, consisting of (1) a secured term loan with a principal amount of $51,000 and (2) a secured revolving credit facility, which amounts may be borrowed, repaid and re-borrowed up to $25,000.  Both the term loan and the revolving credit facility bore interest at LIBOR plus 4% under the terms of the Prior Credit Agreement.  The average interest rate on the term loan under the Prior Credit Agreement approximated 6.25% during the fiscal year ended March 31, 2014, and the average interest rate on the revolving credit facility under the Prior Credit Agreement approximated 4.25% during the fiscal year ended March 31, 2014. 

On May 17, 2013, a portion of the proceeds from the New Credit Agreement was used to repay all amounts owed under the Prior Credit Agreement.  Upon such repayment, all obligations under the Prior Credit Agreement were satisfied and the agreement was terminated.