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Short-Term Debt
6 Months Ended
Dec. 31, 2014
Debt Disclosure [Abstract]  
Short-Term Debt

NOTE 9. SHORT-TERM DEBT

At December 31, 2014, the Company had a $275 million revolving bank credit facility ("the Credit Facility") with a syndicate of banks, for which JPMorgan Chase Bank is the administrative agent, which generally provides for borrowings on a revolving basis, with a sub-limit of $25 million for letters of credit. On January 7, 2015, the commitments under the Credit Facility were increased by an additional $25 million to a total of $300 million. In December 2014, the Credit Facility was amended to among other things, (i) extend its maturity date from January 2016 to December 2019, with a sublimit of $25 million for letters of credit, and (ii) revise the interest rate and unused commitment fee applicable under the Credit Facility. Under the terms of the Credit Facility, the Company may, at any time, increase the size of the Credit Facility up to $375 million without entering into a formal amendment requiring the consent of all of the banks, subject to the Company's satisfaction of certain conditions.

The Credit Facility is guaranteed by all of the Company's U.S. subsidiaries and is collateralized by a first priority lien on all of the Company's U.S. accounts receivable and inventory. Borrowings under the Credit Facility are limited to 85% of eligible accounts receivable and 85% of the appraised net liquidation value of the Company's inventory, as determined pursuant to the terms of the Credit Facility; provided, however, that from August 15 to October 31 of each year the Company's borrowing base may be temporarily increased by up to $25 million.

The Credit Facility, as amended, has only one financial maintenance covenant, which is a debt service coverage ratio that must be maintained at not less than 1.1 to 1 if (a) average borrowing base capacity (calculated on a rolling three-day basis) is equal to or less than ten percent (10%) of total borrowing availability under the Credit Facility, or (b) the Companys borrowing availability under the Credit Facility, plus domestic cash and cash equivalents, is less than $20 million at any time. The Company's average borrowing base capacity and borrowing availability during the quarter ended December 31, 2014, did not fall below the applicable thresholds noted above. Accordingly, the debt service coverage ratio did not apply for the quarter ended December 31, 2014.

Under the terms of the Credit Facility, as amended, the Company may pay dividends or repurchase common stock if (a) it maintains a debt service coverage ratio of not less than 1.1 to 1.0 and maintains borrowing base capacity plus domestic cash and cash equivalents, in each case after giving effect to the applicable payment, of (i) at least $30 million from February 1 to August 31, and (ii) at least $35 million from September 1 to January 31, or (b) it maintains borrowing base capacity plus domestic cash and cash equivalents of (i) at least $40 million from February 1 to August 31, and (ii) at least $45 million from September 1 to January 31.

Borrowings under the credit portion of the Credit Facility continue to bear interest at a floating rate based on an Applicable Margin that is determined by reference to a debt service pricing ratio. At the Companys option, the Applicable Margin may be applied to either the London InterBank Offered Rate (LIBOR) or the base rate. As amended, the Applicable Margin charged on LIBOR loans now ranges from 1.50% to 2.50%, as compared to 1.75% to 2.50% previously, and ranges from 0% to 1.0%, as compared to 0.25% to 1.0% previously, for base rate loans. The Applicable Margin on the first $25 million of borrowings from August 15 to October 31 of each year, while the temporary increase in the Companys borrowing base is in effect, is 1.0% higher. The unused commitment fee rate is now 0.375% per annum, as compared to 0.50% per annum previously, and is based on quarterly average utilization.

At December 31, 2014, the Applicable Margin was 2.50% for LIBOR loans and 1.00% for base rate loans. The commitment fee on the unused portion of the Credit Facility at December 31, 2014 was 0.375%. For the six months ended December 31, 2014 and 2013, the weighted average annual interest rate on borrowings under the Credit Facility was 2.8% and 2.1%, respectively.

The Company also has a second lien credit agreement (the "Second Lien Facility") with JPMorgan Chase Bank, N.A. providing the Company the ability to borrow up to $30 million on a revolving basis. The Second Lien Facility matures on January 2016. The Second Lien Facility is collateralized by a second priority lien on all of the Company's U.S. accounts receivable and inventories, and the interest on borrowings charged under the Second Lien Facility is either (i) LIBOR plus an applicable margin of 3.25% or (ii) the base rate specified in the Second Lien Facility (which is comparable to prime rates) plus a margin of 1.75%. The unused commitment fee applicable to the Second Lien Facility ranges from 0.25% to 0.375% based on the quarterly average unused portion of the Second Lien Facility. To the extent the Company borrows amounts under the Second Lien Facility, the Company has the option to prepay all or a portion of such borrowings, provided the borrowing base capacity under the Credit Facility is in excess of $35 million after giving effect to the applicable prepayment each day for the 30 day period ending on the date of the prepayment.

At December 31, 2014, the Company had $58.9 million in outstanding borrowings and approximately $3.1 million in letters of credit outstanding under the Credit Facility, compared with $78.0 million in borrowings and $3.3 million in letters of credit outstanding at June 30, 2014. At both December 31, 2014 and June 30, 2014, the Company had no outstanding borrowings under the Second Lien Facility. At December 31, 2014, based on eligible accounts receivable and inventory available as collateral, an additional $196.7 million in the aggregate could be borrowed under the Credit Facility and the Second Lien Facility. In periods when there are outstanding borrowings, the Company classifies the Credit Facility and Second Lien Facility as short term debt on its balance sheet because it expects to reduce outstanding borrowings over the next twelve months.

In connection with the amendment of the Credit Facility in December 2014, the Company (i) recorded approximately $0.2 million of debt extinguishment costs in the second quarter of fiscal 2015, and (ii) incurred and capitalized approximately $2.0 million of bank related costs. Such amounts are reflected in debt financing costs, net, on the consolidated balance sheet.