Financing Arrangements

Debt consists of the following:



	July 31, 2014		October 31, 2013
Credit Agreement —interest rate at 1.88% and 1.95% at July 31, 2014 and October 31, 2013, respectively	$	198,100	$	117,400
Equipment security note	2,104		2,461
Capital lease obligations	6,878		—
Insurance broker financing agreement	850		405
Total debt	207,932		120,266
Less: Current debt	2,091		882
Total long-term debt	$	205,841	$	119,384

The weighted average interest rate of all debt was 1.93% and 2.03% for the nine months ended July 31, 2014 and July 31, 2013, respectively.

On October 25, 2013, the Company entered into a Credit Agreement (the “Credit Agreement”) with Bank of America, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer, Merrill Lynch, Pierce, Fenner & Smith Incorporated and J.P. Morgan Securities, LLC as Joint Lead Arrangers and Joint Book Managers, The PrivateBank and Trust Company, Compass Bank and RBS Citizens, N.A., as Co-Documentation Agents, and the other lender parties thereto. The Company's domestic subsidiaries have guaranteed certain of the Company's obligations under the Credit Agreement.

The Credit Agreement has a five-year term and provides for a $300,000 secured revolving line of credit, which may be increased up to an additional $100,000 subject to the Company’s compliance with the terms of the Credit Agreement and pro forma compliance with certain financial covenants, notice to the Administrative Agent and the Company obtaining commitments for such increase. Funds borrowed from the Credit Agreement were used to pay off borrowed funds under the Company's prior credit agreement.

Borrowings under the Credit Agreement bear interest at LIBOR plus the applicable rate as referenced in the Credit Agreement or at the option of the Company the highest of (a) the Federal Funds Rate plus 0.50%, (b) the prime rate of interest in effect for such day as publicly announced from time to time by Bank of America, N.A. or (c) the Eurocurrency Rate plus 1.00%. In addition to interest charges, the Company will pay in arrears a quarterly commitment fee ranging from 0.20% - 0.35% based on the Company’s daily revolving exposure.

The Credit Agreement contains customary restrictive and financial covenants, including covenants regarding the Company’s outstanding indebtedness and maximum leverage and interest coverage ratios. The Credit Agreement also contains standard provisions relating to conditions of borrowing. In addition, the Credit Agreement contains customary events of default, including the non-payment of obligations by the Company and the bankruptcy of the Company. If an event of default occurs, all amounts outstanding under the Credit Agreement may be accelerated and become immediately due and payable. The Company was in compliance with the financial covenants as of July 31, 2014, and October 31, 2013.

On December 30, 2013, the Company entered into a First Amendment Agreement (the “First Amendment”) amending the Credit Agreement.

The First Amendment permits the incurrence of state or local Governmental Authority bonds as part of a government tax incentive program, the proceeds of which are used to finance or refinance the acquisition, construction, equipping or improvement of facilities or property used by the Company, subject to a cap of $30,000 and certain other terms and conditions, and was executed in connection with the issuance of certain Development Authority of Jefferson, Georgia Taxable Industrial Development Revenue Bonds (Jefferson Blanking Inc.) Series 2013 with a principal amount not exceeding $8,000. As of July 31, 2014, there were no borrowings under this agreement.

On June 26, 2014, the Company, together with SHILOH HOLDINGS NETHERLANDS B.V., organized under the laws of the Netherlands (the “Dutch Borrower”) entered into into a Second Amendment Agreement (the “Second Amendment”) amending the Credit Agreement.

The Second Amendment adds the Dutch Borrower as a borrower under the Existing Credit Agreement.

After considering letters of credit of $2,980 that the Company has issued, available funds under the Credit Agreement were $98,920 at July 31, 2014.

Borrowings under the Credit Agreement are collateralized by a first priority security interest in substantially all of the tangible and intangible property of the Company and its domestic subsidiaries and 65% of the stock of foreign subsidiaries.

In July 2014, the Company entered into a finance agreement with an insurance broker for various insurance policies that bears interest at a fixed rate of 1.87% requiring an initial down payment of $254 due with the first monthly payment of $95. The monthly payments extend through April 2015. As of July 31, 2014, $850 remained outstanding under this agreement.

On September 2, 2013, the Company entered into an equipment security note that bears interest at a fixed rate of 2.47% and requires monthly payments of $44 through September 2018. As of July 31, 2014, $2,104 remained outstanding under this agreement and $486 was classified as current debt and $1,618 was classified as long term debt in the Company’s condensed consolidated balance sheets.

On December 27, 2013, the Company entered into a master lease agreement with The Huntington National Bank for machinery and equipment. The lease bears interest at a fixed rate of 3.05% and requires monthly payments of $8 through November 2018. As of July 31, 2014, $408 remained outstanding under this agreement and $90 was classified as current debt and $318 was classified as long term debt in the Company's condensed consolidated balance sheets.

On March 24, 2014, the Company entered into a master lease agreement with PNC Equipment Finance, LLC for machinery and equipment. The lease bears interest at a fixed rate of 3.55% and requires monthly payments of $22 through March 2019. As of July 31, 2014, $1,138 remained outstanding under this agreement and $228 was classified as current debt and $910 was classified as long term debt in the Company's condensed consolidated balance sheets.

Included in the acquisition of Finnveden, the Company assumed a master lease agreement with Swedebank for machinery and equipment. The lease bears interest at a fixed rate of 3.77% and requires monthly payments of $53 through October 2020. As of July 31, 2014, $5,332 remained outstanding under this agreement and $437 was classified as current debt and $4,895 was classified as long term debt in the Company's consolidated balance sheets.

On February 25, 2014, the Company entered into an interest rate swap with an aggregate notional amount of $75,000 designated as a fair value hedge of a portion of the Company's $300,000 secured revolving line of credit dated October 25, 2013 to manage interest rate exposure on the Company’s floating rate LIBOR based debt. The interest rate swap is an agreement to exchange payment streams based on a notional principal amount. This agreement fixes the Company’s future interest payments at 2.74% plus the applicable rate (defined above), the designated benchmark interest rate being hedged (the “hedged risk”), on an amount of the Company’s debt principal equal to the then-outstanding swap notional amount. The forward interest rate swap commences on March 1, 2015 with an initial $25,000 base notional amount with $25,000 increases to the base notional amount on September 1, 2015 and March 1, 2016, respectively. The base notional amount plus each incremental addition to the base notional amount have a five year maturity which mature on February 29, 2020, August 31, 2020 and February 28, 2021, respectively. On the date the interest swap was entered into, the Company designated the interest rate swap as a hedge of the variability of cash flows to be paid relative to its variable rate monies borrowed. Any ineffectiveness in the hedging relationship is recognized immediately into earnings. On July 31, 2014, the Company determined the mark-to-market adjustment for the interest rate swap to be a liability of $843, net of tax which is reflected in other comprehensive income.

Scheduled repayments under the terms of the Credit Agreement and repayments of other debt for the next five years are listed below:



Twelve Months Ending July 31,	Credit Agreement		Equipment Security Note		Capital Lease Obligations		Other Debt		Total
2015	$	—	$	486	$	755	$	850	$	2,091
2016	—		498		783		—		1,281
2017	—		510		811		—		1,321
2018	—		523		841		—		1,364
2019	198,100		87		715		—		198,902
Thereafter	—		—		2,973		—		2,973
Total	$	198,100	$	2,104	$	6,878	$	850	$	207,932