Note 10 - Long-term Debt

3 Months Ended

Mar. 31, 2012

Debt Disclosure [Text Block]

NOTE 10 – LONG-TERM DEBT

Long-term debt consisted of the following:

	(in thousands)
	March 31,			December 31,
	2012			2011
Revolving credit agreement (1)	$	75,500		$	68,800
Capitalized lease obligations (2)		48,859			49,273
		124,359			118,073
Less current maturities		(16,251	)		(19,146	)
Long-term debt and capital leases, less current maturities	$	108,108		$	98,927

(1)  On April 19, 2010, we entered into a Credit Agreement with Branch Banking and Trust Company as Administrative Agent, which replaced our Amended and Restated Senior Credit Facility scheduled to mature on September 1, 2010.  The Credit Agreement provides for available borrowings of up to $100.0 million, including letters of credit not to exceed $25.0 million.  Availability may be reduced by a borrowing base limit as defined in the Credit Agreement.  The Credit Agreement provides an accordion feature allowing us to increase the maximum borrowing amount by up to an additional $75.0 million in the aggregate in one or more increases, subject to certain conditions.  The Credit Agreement bears variable interest based on the type of borrowing and on the Administrative Agent’s prime rate or the London Interbank Offered Rate plus a certain percentage, which is determined based on our attainment of certain financial ratios.  A quarterly commitment fee is payable on the unused portion of the credit line and bears a rate which is determined based on our attainment of certain financial ratios.  The obligations of the Company under the Credit Agreement are guaranteed by the Company and secured by a pledge of substantially all of the Company’s assets with the exception of real estate.  The Credit Agreement includes usual and customary events of default for a facility of this nature and provides that, upon the occurrence and continuation of an event of default, payment of all amounts payable under the Credit Agreement may be accelerated, and the lenders’ commitments may be terminated.  The Credit Agreement contains certain restrictions and covenants relating to, among other things, dividends, liens, acquisitions and dispositions outside of the ordinary course of business, and affiliate transactions.  The new Credit Agreement will expire on April 19, 2014.

Borrowings under the Credit Agreement are classified as “base rate loans,” “LIBOR loans” or “Euro dollar loans.” Base rate loans accrue interest at a base rate equal to the Administrative Agent’s prime rate plus an applicable margin that is adjusted quarterly between 0.0% and 1.5%, based on the Company’s leverage ratio.  LIBOR loans accrue interest at LIBOR plus an applicable margin that is adjusted quarterly between 2.00% and 3.75% based on the Company’s leverage ratio.  Euro dollar loans accrue interest at the LIBOR rate in effect at the beginning of the month in which the borrowing occurs plus an applicable margin that is adjusted quarterly between 2.00% and 3.75% based on the Company’s leverage ratio.  On a quarterly basis, the Company must pay a fee on the unused amount of the revolving credit facility of between 0.25% and 0.375% based on the Company’s leverage ratio, and it must pay an annual administrative fee to the Administrative Agent of 0.03% of the total commitments.

On March 8, 2012, we entered into a Second Amendment to Credit Agreement (the “Second Amendment”) with Branch Banking and Trust Company, as Administrative Agent (the “Agent”), Regions Bank, as Syndications Agent, U.S. Bank National Association, Bank of America, N.A., and BancorpSouth (collectively, the “Lenders”), which amends the Credit Agreement, dated April 19, 2010, by and among the Company, the Agent, and the Lenders.

The Second Amendment, among other things, (i) amended the “Applicable Margin” and “Applicable Unused Fee Rate” as set forth in the tables below, (ii) eased the consolidated leverage ratio through the 2012 calendar year such that, where previously the ratio of consolidated debt to consolidated EBITDAR was not to exceed 3.00 to 1.00, now the consolidated leverage ratio is not to exceed:  3.60 to 1.00 for the period January 1, 2012 through June 30, 2012; 3.40 to 1.00 for the period July 1, 2012 through September 30, 2012; 3.25 to 1.00 for the period October 1, 2012 through December 31, 2012; and 3.00 to 1.00 for the period commencing January 1, 2013 and at all times thereafter, and (iii) eased the consolidated fixed charge coverage ratio through the 2012 calendar year such that, where previously the consolidated fixed charge coverage ratio was not to be less than 1.40 to 1.00, now the consolidated fixed charge coverage ratio is not to fall below:  1.00 to 1.00 for the period January 1, 2012 through June 30, 2012; 1.10 to 1.00 for the period July 1, 2012 through September 30, 2012; 1.20 to 1.00 for the period October 1, 2012 through December 31, 2012; and 1.40 to 1.00 for the period commencing January 1, 2013 and at all times thereafter.

New Pricing

Ratio of Consolidated Debt to Consolidated EBITDAR	Euro-Dollar Loans and Letters of Credit	Base Rate Loans		Applicable Unused Fee Rate
Greater than 3.00 to 1.00	3.75%		1.50%		0.375%
Greater than 2.75 to 1.00 but less than or equal to 3.00 to 1.00	3.25%		1.00%		0.375%
Greater than 2.25 to 1.00 but less than or equal to 2.75 to 1.00	2.75%		0.5%		0.30%
Greater than 1.75 to 1.00 but less than or equal to 2.25 to 1.00	2.50%		0.25%		0.25%
Less than or equal to 1.75 to 1.00	2.00%		0%		0.25%

Prior Pricing

Ratio of Consolidated Debt to Consolidated EBITDAR	Euro-Dollar Loans and Letters of Credit	Base Rate Loans		Applicable Unused Fee Rate
Greater than 2.75 to 1.00	3.25%		1.0%		0.375%
Greater than 2.25 to 1.00 but less than or equal to 2.75 to 1.00	2.75%		0.5%		0.30%
Greater than 1.75 to 1.00 but less than or equal to 2.25 to 1.00	2.50%		0.25%		0.25%
Less than or equal to 1.75 to 1.00	2.00%		0%		0.25%

In exchange for these amendments, the Company agreed to pay fees of $250,000.

The interest rate on our overnight borrowings under the Credit Agreement at March 31, 2012 was 4.25%.  The interest rate including all borrowings made under the Credit Agreement at March 31, 2012 was 3.6%.  The interest rate on the Company’s borrowings under the agreements for the three months ended March 31, 2012 was 3.8%.  A quarterly commitment fee is payable on the unused portion of the credit line and bears a rate which is determined based on our attainment of certain financial ratios.  At March 31, 2012, the rate was 0.375% per annum.  The Credit Agreement is collateralized by revenue equipment having a net book value of $162.3 million at March 31, 2012, and all trade and other accounts receivable.  The Credit Agreement requires us to meet certain financial covenants (i.e., a maximum leverage ratio of 3.6 and a minimum fixed charge ratio of 1.0) and to maintain a minimum tangible net worth of approximately $106.4 million at March 31, 2012.  We were in compliance with these covenants at March 31, 2012.  The covenants would prohibit the payment of dividends by us if such payment would cause us to be in violation of any of the covenants.  As the Company reprices its debt on a quarterly basis, the borrowings under the Credit Agreement approximate its fair value.  And, at March 31, 2012, the Company had outstanding $2.2 million in letters of credit and had approximately $16.3 million available to be borrowed under the Credit Agreement.

We amended our Credit Agreement during the first quarter of 2012 to prevent a default and ease two of the financial covenants through 2012.  We continue to closely monitor financial results in light of the revised financial covenants.  We believe attaining compliance in the second quarter will be difficult.  Failure to comply with the covenants in the Credit Agreement could result in a default.

(2) Our capitalized lease obligations have various termination dates extending through November 2015 and contain renewal or fixed price purchase options.  The effective interest rates on the leases range from 1.6% to 4.0% at March 31, 2012.  The lease agreements require us to pay property taxes, maintenance and operating expenses.