(5) DEBT

A summary of the components of debt is as follows:


	April 30, 2012		October 31, 2011
	(in thousands)
Credit facility (a)	$	56,307	$	32,646
8.25% senior notes due 2019 (b)		200,000		200,000
Pennsylvania Industrial Loans (c)		1,282		1,354
Foreign bank borrowings (d)		—		—

Total debt		257,589		234,000
Less: current portion		149		145

Long-term debt	$	257,440	$	233,855

(a)

Credit Facility

On February 22, 2012, the Company entered into a Second Amended and Restated Loan and Security Agreement (the "Amended and Restated Credit Facility") with Wells Fargo Bank National Association ("Wells Fargo") successor to Wachovia Bank N.A., as a lender thereunder and as agent for the secured parties thereunder. The Company previously was party to a Loan and Security Agreement with Wells Fargo as initial lender thereunder and as agent for the lenders thereunder which was last amended and restated on October 30, 2008 (the "Credit Facility"). "Credit Facility" refers to either the prior Credit Facility or the Amended and Restated Credit Facility as the context requires. The maximum borrowing amount under the Amended and Restated Credit Facility remains the same as the Credit Facility at $150.0 million with a maximum for letters of credit of $20.0 million. The maturity date has been extended from December 15, 2012 to February 21, 2017.

The Company utilizes the Credit Facility to provide funding for operations and other corporate purposes through daily bank borrowings and/or cash repayments to ensure sufficient operating liquidity and efficient cash management. The Company had average borrowings under the Credit Facility of approximately $61.2 million and $46.8 million, with a weighted average interest rate of 2.7% and 2.8%, during the three months ended April 30, 2012 and 2011, respectively. The Company had average borrowings under the Credit Facility of approximately $54.7 million and $42.9 million, with a weighted average interest rate of 2.8% during each of the six month periods ended April 30, 2012 and 2011, respectively. Under the Amended and Restated Credit Facility, interest rates are based upon the Quarterly Average Excess Availability (as defined therein) at a margin of the prime rate (defined as the greater of Wells Fargo's prime rate or the Federal Funds rate plus 0.5%) plus 0% to 0.25% or LIBOR plus 1.75% to 2.50%. Under the prior Credit Facility, interest rates were substantially similar, although LIBOR borrowings up to six months were at a margin of LIBOR plus 2.25% to 2.75%.

Borrowings and letters of credit available under the Amended and Restated Credit Facility are limited to a borrowing base based upon specific advance percentage rates on eligible accounts receivable and inventory, subject, in the case of inventory, to amount limitations. The prior Credit Facility's borrowing base also included real property and equipment. The sum of the eligible assets at April 30, 2012 and October 31, 2011 supported a borrowing base of $144.8 million and $148.4 million, respectively. Availability was reduced by the aggregate amount of letters of credit outstanding totaling $0.5 million at April 30, 2012 and October 31, 2011, respectively. Availability at April 30, 2012 and October 31, 2011 under the Credit Facility was $88.0 million and $115.3 million, respectively. The Credit Facility is secured by liens on most of the Company's domestic assets (other than real property and equipment) and on 66% of the Company's ownership interest in certain foreign subsidiaries. Pursuant to the Amended and Restated Credit Facility, mortgages and liens on the Company's real property and equipment under the prior Credit Facility were released.

The Credit Facility provides for events of default. If an event of default occurs and is continuing, amounts due under the Credit Facility may be accelerated and the commitments to extend credit thereunder terminated, and the rights and remedies of the lenders may be exercised including rights with respect to the collateral securing the obligations under the Credit Facility. The Credit Facility also contains covenants, including, but not limited to, limitations on the incurrence of debt and liens, the disposition and acquisition of assets, and the making of investments and restricted payments, including the payment of cash dividends. The prior Credit Facility had key financial covenants applicable if Excess Availability was below a specified amount. The Amended and Restated Credit Facility resulted in the removal of the financial covenants except for the fixed charge coverage ratio, which is triggered when Excess Availability is below $22.5 million for the immediately preceding fiscal quarter (compared to the $35 million trigger in the prior Credit Facility), in which case a fixed charge coverage ratio test of 1.0x must be met.

In addition, if Excess Availability under the Credit Facility is less than $25.0 million (which was $15.0 million under the prior Credit Facility), a springing cash dominion is activated and all remittances received from customers in the United States will automatically be applied to repay the balance outstanding. The automatic repayments through the springing cash dominion remain in place until Excess Availability exceeds $25.0 million, and no other event of default has occurred and is continuing, in each case for 30 consecutive days. Excess Availability under the Credit Facility ranged from $64.1 million to $124.4 million during the six months ended April 30, 2012 and from $74.1 million to $149.5 million during the six months ended April 30, 2011.

The Company has capitalized $1.3 million of fees related to the Amended and Restated Credit Facility. These fees, along with the unamortized fees of $0.4 million related to the prior Credit Facility, are being amortized on a straight line basis over 60 months, the term of the Amended and Restated Credit Facility.

The Company was in compliance with the financial covenants at April 30, 2012 and October 31, 2011.

(b)

8.25% Senior Notes due 2019

On April 18, 2011, the Company completed the sale of $200 million aggregate principal amount of 8.25% Senior Notes due 2019 (the "2019 Notes") through a private offering.

The 2019 Notes mature on April 15, 2019, and the indenture governing the 2019 Notes contains certain customary covenants that, among other things, limit the Company's ability and the ability of its subsidiaries to incur additional indebtedness, declare or pay dividends, purchase or redeem its capital stock, make investments, sell assets, merge or consolidate, guarantee or pledge any assets or create liens. The Company was in compliance with all of these covenants at April 30, 2012 and October 31, 2011.

The 2019 Notes do not have any sinking fund requirements. If the Company experiences certain changes in control, it must offer to repurchase all of the 2019 Notes at a price equal to 101% of the principal amount, plus accrued and unpaid interest. In addition, if the Company sells certain assets, under certain circumstances, it must offer to repurchase the 2019 Notes pro rata up to a maximum amount equal to the proceeds of such sale at 100% of the principal amount, plus accrued and unpaid interest.

The 2019 Notes will be redeemable at the option of the Company, in whole or in part, at any time on or after April 15, 2014 and prior to maturity at certain fixed redemption prices plus accrued and unpaid interest. The 2019 Notes may be redeemed, in whole or in part, at any time prior to April 15, 2014 at a redemption price equal to 100% of the principal amount of the 2019 Notes plus a make-whole premium, as defined, together with accrued and unpaid interest. In addition, the Company may redeem up to 35% of the 2019 Notes prior to April 15, 2014, using net proceeds from certain equity offerings.

Interest is paid semi-annually on April 15 and October 15 of each year beginning on October 15, 2011.

Approximately $4.9 million of fees were capitalized related to the issuance of the 2019 Notes. These fees are being amortized on a straight line basis over eight years, the term of the 2019 Notes. During the three and six months ended April 30, 2012, $0.2 million and $0.3 million, respectively, was amortized into interest expense related to the 2019 Notes.

(c)

Pennsylvania Industrial Loans

The Company has certain amortizing fixed rate term loans in connection with the expansion in fiscal 2008 of its Wright Township, Pennsylvania manufacturing facility. These financing arrangements are secured by the real property of the manufacturing facility located in Wright Township, Pennsylvania, which had a net carrying value of $11.6 million at April 30, 2012.

(d)

Foreign bank borrowings

In addition to the amounts available under the Credit Facility, the Company also maintains a secured credit facility at its Canadian subsidiary used to support operations which is generally serviced by local cash flows from operations. There was zero outstanding under this arrangement at April 30, 2012 and October 31, 2011. Availability under the Canadian credit facility at April 30, 2012 and October 31, 2011 was $5.1 million and $5.0 million, respectively.

Fair Value Measurements

The fair value of the 2019 Notes is based on quoted market rates (Level 1). The Company believes that the carrying value of the Company's Pennsylvania Industrial Loans approximates its fair value based on observable inputs (Level 2). The carrying value and fair value of the Company's fixed rate debt at April 30, 2012 and October 31, 2011 are as follows:


	April 30, 2012				October 31, 2011
	Carrying Value		Fair Value		Carrying Value		Fair Value
	(in thousands)
2019 Notes	$	200,000	$	209,500	$	200,000	$	192,626
Pennsylvania Industrial Loans		1,282		1,282		1,354		1,354

Total	$	201,282	$	210,782	$	201,354	$	193,980