Note 7 - Long-Term Debt

9 Months Ended

Sep. 30, 2014

Disclosure Text Block [Abstract]

Long-term Debt [Text Block]

Note 7 – LONG-TERM DEBT

Long-term debt consisted of the following (in thousands):

	September 30,		December 31,
	2014		2013
Revolving credit agreement	$	63,500	$	64,000

Credit Agreement

In 2012, the Company entered into a $125.0 million Revolver with Wells Fargo Capital Finance, LLC, as Administrative Agent, and PNC Bank. The Revolver, which expires in 2017, is collateralized by substantially all of the Company’s assets, and includes letters of credit not to exceed $15.0 million. In addition, the Revolver has an accordion feature whereby the Company may elect to increase the size of the Revolver by up to $50.0 million, subject to customary conditions and lender participation. The Revolver is governed by a borrowing base with advances against eligible billed and unbilled accounts receivable and eligible revenue equipment, and has a first priority perfected security interest in all of the Company’s business assets (excluding tractors and trailers financed through capital leases and real estate). Proceeds are used to finance working capital, to fund capital expenditures and for general corporate purposes. The Revolver bears interest at rates typically based on the Wells Fargo prime rate or LIBOR, in each case, plus an applicable margin ranging from 2.25% to 2.75% based on average excess availability. The Revolver contains a minimum excess availability requirement equal to 15.0% of the maximum revolver amount (currently $18.8 million) and an annual capital expenditure limit ($73.5 million in 2014 and with further increases thereafter).

Under the Revolver’s terms, the Company is required to maintain a minimum collateral cushion above the maximum facility size, referred to as “suppressed availability.” During 2014 (after giving effect to an amendment to the Revolver signed on March 14, 2014, and effective as of December 31, 2013), if a minimum suppressed availability threshold of $30.0 million is not maintained, our borrowing availability will reduce by the amount of the shortfall below $30.0 million. After 2014, if the minimum suppressed availability threshold is not maintained, the advance rate on eligible revenue equipment will reduce and a permanent amortization of the revenue equipment portion of the Company’s borrowing base at the rate of 1/72nd, or approximately $1.6 million, per month would trigger based on the September 30, 2014, revenue equipment collateral. At September 30, 2014, the suppressed availability was $42.8 million, which did not reduce the Company’s borrowing availability. Future fluctuations in the amount and value of equipment serving as collateral under the Revolver will impact borrowing availability. If suppressed availability falls below $20.0 million, there will be additional restrictions on which items of revenue equipment may be included as eligible revenue equipment. The Revolver does not contain any financial maintenance covenants, but does contain certain restrictions and covenants relating to, among other things, dividends, liens, acquisitions and dispositions outside the ordinary course of business and affiliate transactions. The Revolver includes usual and customary events of default for a credit facility of this nature.

The Company had no overnight borrowings under the Revolver at September 30, 2014. The average interest rate including all borrowings made under the Revolver as of September 30, 2014 was 2.5%. As debt is repriced on a monthly basis, the borrowings under the Revolver approximate fair value. As September 30, 2014, the Company had outstanding $3.8 million in letters of credit and had approximately $38.9 million available under the Revolver (net of the required minimum availability of approximately $18.8 million).