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Note 8 - Revolving Credit Facilities
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12 Months Ended |
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Dec. 31, 2011
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| Schedule of Line of Credit Facilities [Table Text Block] |
8. Revolving
Credit Facility
On
March 31, 2011, the Company amended the credit agreement
governing the Company’s revolving credit facility and
the term loan described in Note 7 above to extend the
maturity date of the revolving credit facility to March 31,
2013 and to eliminate the receivables borrowing base
limitation previously applicable to the revolving credit
facility. The revolving credit facility continues to provide
for a line of credit of up to $10.0 million. The Company may
draw upon this line of credit up to $10.0 million, less
amounts outstanding under letters of credit. The proceeds of
the line of credit will be used exclusively for working
capital purposes.
Substantially
all of the assets of the Company and its wholly owned
subsidiaries are pledged as collateral securing the
Company’s performance under the revolving credit
facility and term loan. The revolving credit
facility bears interest based at the one-month LIBOR plus an
initial increment of 175 basis points (2.01% as of December
31, 2011).
The
credit agreement governing the revolving credit facility and
the term loan contains certain covenants related to the
Company’s financial performance. Included among the
covenants are a fixed charge coverage ratio and a total
funded debt to earnings before interest, taxes, depreciation
and amortization ratio. As of December 31, 2011, the Company
was not in compliance with the terms of the credit agreement
with respect to the declaration and payment of cash dividends
in 2011 by the Company to the holders of the Company’s
Series A Convertible Perpetual Preferred Stock, as well as
certain other technical matters not involving the
Company’s financial performance or financial
maintenance covenants. Subsequent to December 31,
2011, the Company received a waiver from its lender regarding
the payment of dividends on the preferred stock in October
2011 and January 2012 and the other technical matters noted
above. As of December 31, 2011, the Company was in
compliance with all other terms under the credit agreement
and no other events of default existed under the terms of
such agreement.
The
Company had outstanding standby letters of credit as of both
December 31, 2011 and 2010 totaling $410,000 related to
insurance policies either continuing in force or recently
canceled. Amounts outstanding for letters of credit reduce
the amount available under the revolving credit facility, on
a dollar-for-dollar basis.
Available
capacity in excess of outstanding borrowings under the line
was approximately $9.6 million and $6.8 million of the as of
December 31, 2011 and 2010, respectively. The line of credit
carries a maturity date of March 31, 2013. As of
December 31, 2011 and 2010 the line of credit balance was $0
and $2,749,000, respectively.
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