LONG-TERM DEBT

9 Months Ended

Mar. 30, 2014

Long-term Debt, Unclassified [Abstract]

LONG-TERM DEBT

NOTE G – LONG-TERM DEBT

Long-term debt payable consists of the following:

On August 8, 2012, QMT entered into an agreement with TD Bank, N.A.(“TD Bank”) for a $25.0 million credit facility to partially fund the AFT Acquisition and to pay off the balances of other outstanding loans held as of that date.

The Credit facility is described in the first four items below. Unless otherwise noted, interest rate for the Credit facility below is variable and can range from one month LIBOR plus 250-300 bps and is determined based on total leverage ratio as measured on a rolling four quarter basis at the end of each fiscal quarter.

Subsequent to March 30, 2014 the long-term debt was refinanced, see Note P.

	Balance as of (in thousands)
	March 30, 2014		June 30, 2013
Revolving line of credit not to exceed $10.0 million with a maturity date of August 8, 2015; collateralized by accounts receivable and inventory; the amount available from this line is determined by a monthly borrowing base, at December 29, 2013. Interest is accrued and payable monthly.	$	3,314	$	2,868
Term Loan A in the amount of $3.6 million, collateralized by equipment payable in equal monthly payments of $60 thousand plus accrued interest, with a maturity date of August 8, 2017.		2,468		3,010
Term Loan B (commercial mortgage) in the amount of $5.5 million payable in equal monthly installments of $18 thousand plus accrued interest with maturity date of August 8, 2022, with a five year call option.		5,124		5,288
Term Bridge Loan in the amount of $6.9 million with interest only payments for the first 6 months and 23 monthly principal payments of $300 thousand plus interest with maturity date of February 8, 2015.		1,934		5,032
Subtotal	$	12,840	$	16,198

Promissory Notes Payable to Capital One Equipment Finance Corp. in the amount of $2.2 million with interest accrued and payable monthly. The Promissory Notes represent interim financing and will be converted to a capital lease obligation upon completion of the equipment build and the finalization of a lease agreement.		2,156			—
Convertible Note Payable to PCC in the amount of $17.6 million; due at 8/8/2017; interest is equal to the Five-Year U.S. Treasury Note Constant Maturity rate adjusted on each anniversary and is paid on a quarterly basis; this Note is subordinated to the first priority security interest of TD Bank Subject to certain terms of the agreement PCC has the option to convert outstanding principal and unpaid interest into shares of the Company’s Common Stock.	$	17,600		$	17,600
Convertible note interest discount(1)		(1,418	)		(1,734	)
Convertible note, net of discount		16,182			15,866
Total Long-Term Debt from Continuing Operations and Short-Term Borrowings		31,178			32,064
Less: Current Portion from Continuing Operations		(8,345	)		(7,410	)
Total Long-Term Debt Less Current Portion	$	22,833		$	24,654

(1) The interest discount represents the difference between the actual negotiated interest rate being the Five-Year U.S. Treasury Note Constant Maturity rate, and the Company’s assumption of market rate of 4%. The total interest discount calculated was $2.1 million, which is amortized over the life of the note. The fiscal year 2014 non-cash interest discount amortization reduces the interest discount balance by $316 thousand, resulting in an ending balance as of March 30, 2014 of $1.4 million.

The Company uses an economic hedging instrument through TD Bank to synthetically convert a floating rate to a fixed rate on 50% of the notional amounts of Term Loan A and B for five years. The fixed rate, through a derivative swap was locked in at the time the swap was executed; the swap is discussed in Note H.

Certain loans are subject to financial and non-financial covenants established by TD Bank with compliance determined on a period basis using audited and consolidated financial statements. As of the quarter ended March 30, 2014 and year ended June 30, 2013, the Company was in compliance with all covenants.