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Secured Credit Facility | 6 Months Ended
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Jan. 31, 2017
Line of Credit Facility [Abstract] |
Secured Credit Facility | Secured Credit Facility On February 23, 2016, in connection with our acquisition of TCS, we entered into a $400,000,000 Secured Credit Facility with a syndicate of lenders. The Secured Credit Facility comprises a senior secured term loan A facility of $250,000,000 (the “Term Loan Facility”) and a secured revolving loan facility of up to $150,000,000, including a $25,000,000 letter of credit sublimit (the “Revolving Loan Facility”) and, together, with the Term Loan Facility, matures on February 23, 2021. The proceeds of these borrowings were primarily used to finance our acquisition of TCS, including the repayment of certain existing indebtedness of TCS. The Term Loan Facility requires mandatory quarterly repayments. During the six months ended January 31, 2017, we repaid $4,427,000 principal amount of borrowings under the Term Loan Facility. Under the Revolving Loan Facility, we had outstanding balances ranging from $56,904,000 to $84,904,000 during the six months ended January 31, 2017. As of January 31, 2017 and July 31, 2016, amounts outstanding under our Secured Credit Facility, net, were as follows:
|  | January 31, 2017 |  |  | July 31, 2016 |
Term Loan Facility |  | $ | 168,220,000 |  |  | 172,647,000 |
Less unamortized deferred financing costs related to Term Loan Facility |  | 4,909,000 |  |  | 5,515,000 |
Term Loan Facility, net |  | 163,311,000 |  |  | 167,132,000 |
Revolving Loan Facility |  | 79,804,000 |  |  | 83,904,000 |
Amount outstanding under Secured Credit Facility, net |  | 243,115,000 |  |  | 251,036,000 |
Less current portion of long-term debt |  | 13,281,000 |  |  | 11,067,000 |
Non-current portion of long-term debt |  | $ | 229,834,000 |  |  | 239,969,000 |
Interest expense, including amortization of deferred financing costs, recorded during the three and six months ended January 31, 2017 related to the Secured Credit Facility was $2,708,000 and $5,883,000, respectively, and reflects a blended interest rate of approximately 5.06% and 4.79%, respectively. There was no corresponding interest expense recorded during the three and six months ended January 31, 2016. At January 31, 2017, we had $3,690,000 of standby letters of credit outstanding related to our guarantees of future performance on certain customer contracts and no outstanding commercial letters of credit. The Revolving Loan Facility can be used for working capital and other general corporate purposes of the Company, including the issuance of letters of credit. Borrowings under the Secured Credit Facility, pursuant to terms defined in the Secured Credit Facility, shall be either (i) Alternate Base Rate ("ABR") borrowings, which bear interest from the applicable borrowing date at a rate per annum equal to (x) the greatest of (a) the Prime Rate in effect on such day, (b) the Federal Funds Effective Rate in effect on such day plus 0.50% per annum and (c) the Adjusted LIBO Rate on such day (or, if such day is not a business day, the immediately preceding business day) plus 1.00% per annum (provided that if the LIBO Rate is less than 1.00%, then the LIBO Rate shall be deemed to be 1.00%), plus (y) the Applicable Rate, or (ii) Eurodollar borrowings, which bear interest from the applicable borrowing date at a rate per annum equal to (x) the Adjusted LIBO Rate for such interest period (provided that if the LIBO Rate is less than 1.00%, then the LIBO Rate shall be deemed to be 1.00%) plus (y) the Applicable Rate. The Applicable Rate is determined based on a pricing grid that is dependent upon our leverage ratio as of the end of each fiscal quarter. The Secured Credit Facility contains customary representations, warranties and affirmative covenants and customary negative covenants, subject to negotiated exceptions, on (i) liens, (ii) investments, (iii) indebtedness, (iv) significant corporate changes, including mergers and acquisitions, (v) dispositions, (vi) restricted payments, including stockholder dividends, and (vii) certain other restrictive agreements. The Secured Credit Facility also contains certain financial covenants and customary events of default (subject to grace periods, as appropriate), such as payment defaults, cross-defaults to other material indebtedness, bankruptcy and insolvency, the occurrence of a defined change in control and the failure to observe the negative covenants and other covenants related to the operation of our business. Our Secured Credit Facility requires that we maintain compliance with various financial covenants, including a maximum Leverage Ratio (which, in simple terms, represents Total Indebtedness less Available Cash (up to $50,000,000) divided by the trailing twelve months Consolidated EBITDA, as such terms are defined in the Secured Credit Facility). The definition of Consolidated EBITDA is similar to our Adjusted EBITDA metric (which is fully described in Note (15) - "Segment Information"); however, Adjusted EBITDA is reduced by the favorable adjustment to operating income related to the settlement of a TCS intellectual property matter during the three months ended January 31, 2017 (which is discussed in Note (19) - "Legal Proceedings and Other Matters"). As such, the trailing twelve months Consolidated EBITDA for purposes of our Secured Credit Facility financial covenant calculations is higher by $9,979,000 as compared to the Adjusted EBITDA financial metric presented in our segment disclosures for the same period. During the three months ended January 31, 2017, our Leverage Ratio was 2.57 x Consolidated EBITDA as compared to a maximum allowable of 3.00 x Consolidated EBITDA. The maximum allowable Leverage Ratio for the third quarter of fiscal 2017 will remain at 3.00 x Consolidated EBITDA and will decrease to 2.75 x Consolidated EBITDA by the end of our fiscal 2017. Given our $63,144,000 of cash and cash equivalents as of January 31, 2017 and our expected fiscal 2017 business performance, we anticipate maintaining compliance with our Leverage Ratio and other covenants in our Secured Credit Facility for at least the remainder of fiscal 2017. We may not be able to maintain compliance with such covenants at all times in the future. Accordingly, in order to obtain increased flexibility and other enhancements, we continue to be actively engaged in substantive discussions with our financial lenders to modify various terms and conditions contained in our Secured Credit Facility. We believe we have good working relationships with our financial lenders and, based on specific feedback we have received, we believe we will be able to obtain modifications and or waivers, if necessary, to remain in compliance with the terms of our Secured Credit Facility. The obligations under the Secured Credit Facility are guaranteed by certain of our domestic subsidiaries (the “Subsidiary Guarantors”). As collateral security for amounts outstanding under our Secured Credit Facility and the guarantees thereof, we and our Subsidiary Guarantors have granted to an administrative agent, for the benefit of the lenders, a lien on, and first priority security interest in, substantially all of our tangible and intangible assets. Capitalized terms used but not defined herein have the meanings set forth for such terms in the credit agreement, dated as of February 23, 2016, pursuant to which the Secured Credit Facility is documented and which has been filed with the SEC.

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- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21475-112644 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02.19,20,22) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 + Details
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