Borrowing Arrangements

9 Months Ended

Sep. 30, 2012

Debt Disclosure [Abstract]

BORROWING ARRANGEMENTS

BORROWING ARRANGEMENTS

Under the terms of an unsecured credit facility with Bank of the West, the Company has a $5.0 million line of credit available for general working capital needs, which includes a $5.0 million letter of credit sub-facility including a $2.0 million foreign exchange sub-facility. In April 2011, the expiration date of the line of credit was extended from April 30, 2011 to April 30, 2013. Interest rates under the amended agreement are based on one of three interest rates, at the Company’s option: (1) a variable alternate base rate plus 1.0%, the alternate base rate being the greater of (x) Bank of the West’s prime rate, (y) the Fed Funds Rate plus 0.5% or (z) daily adjusted one-month LIBOR plus 1.0%; (2) floating one-month LIBOR plus 2.0% or (3) fixed LIBOR for one, two, three or six month periods, plus 2.0%. As of September 30, 2012, the Company had no borrowings under the line of credit. The agreement includes certain restrictive covenants and, as of September 30, 2012, the Company was in compliance with such covenants.

The credit facility also included a $15.0 million term loan facility to finance the repurchase of shares of the Company’s common stock. In May 2009, the Company borrowed $15.0 million under the term loan. Interest under the term loan facility was payable at a rate equal to floating one-month LIBOR plus 2.25%. Borrowings were payable over 21 equal monthly installments, which commenced on August 31, 2009. The final payment was made on April 30, 2011.

Through the PhaseLink acquisition, the Company acquired two term loans totaling $282,000 with a local bank in Taiwan. The Company paid off the acquired bank loans in full in June 2012.