CREDIT AGREEMENT

9 Months Ended

Sep. 30, 2012

Subsequent Events [Abstract]

CREDIT AGREEMENT

NOTE C – CREDIT AGREEMENT

On October 10, 2012, we executed a Second Amended and Restated Credit Agreement (the “Credit Agreement”) with a financial institution.  The Credit Agreement provides for up to $40 million of borrowings under a revolving credit facility (the “Revolver”).  The Revolver matures on October 10, 2015 with interest on outstanding borrowings payable at the London Interbank Offered Rate (“LIBOR”) plus 1.75%. The Revolver also provides for a $5 million sub-limit for trade and stand-by letters of credit. The Credit Agreement is unsecured, but provides for a lien to be established on substantially all of our assets upon certain events of default.  The Credit Agreement contains representations and warranties, as well as affirmative, reporting and negative covenants customary for financings of this type.  Among other things, the Credit Agreement restricts the incurrence of certain additional debt and certain capital expenditures, and requires the maintenance of certain financial ratios, including a minimum fixed charge coverage ratio, a maximum senior liabilities to tangible net worth ratio, and the maintenance of minimum liquid assets of $10 million, as all such ratios and terms are defined in the Credit Agreement.

This Credit Agreement amended and restated our prior credit agreement, which was scheduled to mature on October 31, 2012 and provided for a $30 million revolving loan with interest payable at LIBOR plus 2.25% and letter of credit commitment.  At September 30, 2012, outstanding borrowings totaled $22 million and outstanding letters of credit totaled approximately $946,000.