Long-Term Debt Refinancing

9 Months Ended

Sep. 30, 2012

Debt Disclosure [Abstract]

Long-term Debt [Text Block]

Note 6-- Long-Term Debt Refinancing

On September 30, 2012, the Company re-financed its term loan agreement with its primary lender. The re-financed term loan is for a period of thirty-eight months with interest accruing at a floating interest rate based on the 30-day LIBOR plus 2%. As of September 30, 2012, the term loan's interest rate was 2.231%. Monthly principal and interest are based upon approximately a seven-year amortization. The aggregate outstanding balance of principal and interest is due and payable on November 30, 2015. At September 30, 2012, the outstanding term loan balance was approximately $2.9 million.

Concurrently with the expiration of its prior agreement, effective September 30, 2012, the Company entered into a new one-year $5 million revolving loan agreement with its primary lender. Similar to the prior agreement, any advances under the revolver accrue interest at a variable interest rate based on the 30-day LIBOR plus 1.85%. Interest, if any, is payable monthly. At September 30, 2012, the oustanding revolving line of credit balance was zero.

A separate letter agreement dated April 4, 2012 stating the financial covenants related to the term loan and revolving loan agreements continues in effect. These financial covenants require the Company to maintain net tangible worth of not less than $11 million and that borrowings under the agreements shall not exceed EBITDA by a ratio of 2.5:1. At September 30, 2012, the Company was in compliance with its loan covenants. The term loan and revolving line of credit continue to be secured by all tangible and intangible assets of the Company and also by a mortgage on the real estate of the Company's headquarters.