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Debt | 12 Months Ended
--- | ---
Sep. 30, 2013
Debt [Abstract] |
Debt | 8. DEBT Debt consists of the following:
|  |  | September 30, |  | September 30,
|  |  | 2013 |  | 2012
Wells Fargo Term Loan, paid in installments thru Aug 9, 2016 |  |  | 13,708 |  |  | -
Tontine Term Loan |  | $ | - |  | $ | 10,000
Insurance Financing Agreements |  |  | - |  |  | 196
Capital leases and other |  |  | 64 |  |  | 284
| Total debt |  |  | 13,772 |  |  | 10,480
Less — Short-term debt and current maturities of long-term debt |  |  | (3,562) |  |  | (10,456)
| Total long-term debt |  | $ | 10,210 |  | $ | 24
Future payments on debt in future fiscal y ears at September 30, 2013 are as follows:
|  | Capital Leases and Other |  |  |  |  |  |
|  |  | Term Debt |  | Total
2014 |  | $ | 62 |  | $ | 3,500 |  | $ | 3,562
2015 |  |  | 4 |  |  | 3,500 |  |  | 3,504
2016 |  |  | - |  |  | 6,708 |  |  | 6,708
2017 |  |  | - |  |  | - |  |  | -
2018 |  |  | - |  |  | - |  |  | -
Thereafter |  |  | - |  |  | - |  |  | -
Less: Imputed Interest |  |  | (2) |  |  | - |  |  | (2)
Total |  | $ | 64 |  | $ | 13,708 |  | $ | 13,772
For the years ended September 30, 2013, 2012 and 2011, we incurred interest expense of $1,771, $2,324 and $2,278, respectively. The 2012 Revolving Credit Facility On August 9, 2012, we entered into a Credit and Security Agreement (the “Credit Agreement”), for a $30,000 revolving credit facility (the “2012 Credit Facility”) with Wells Fargo Bank, National Association with a maturity date of August 9, 2015, unless earlier terminated. We have entered into two amendments to the 2012 Credit Facility. On February 12, 2013, we entered into an amendment of our 2012 Credit Facility with Wells Fargo (the “Amendment”), to extend the t erm to August 9, 2016, add IES Renewable Energy, LLC as a borrower, and provide for a term loan (the “Wells Fargo Term Loan”). On September 13, 2013, we entered into an amendment of our 2012 Credit Facility with Wells Fargo (the “Second Amendment”), which amended the Wells Fargo Term Loan, removed the requirement to cash collateralize our outstanding letters of credit, and added IES Subsidiary Holdings Inc., Magnetech Industrial Services, Inc., and HK Engine Components, LLC, as borrowers. The 2012 Credit Facility is guaranteed by our subsidiaries and secured by first priority liens on substantially all of our subsidiaries’ existing and future acquired assets, exclusive of collateral provided to our surety providers. The 2012 Credit Facility also restrict s us from paying cash dividends and places limitations on our ability to repurchase our common stock. The 2012 Credit Facility contains customary affirmative, negative and financial covenants. The 2012 Credit Facility requires that we maintain a fixed ch arge coverage ratio of not less than 1.0:1.0 at any time that our Liquidity (defined as the aggregate amount of unrestricted cash and cash equivalents on hand plus Excess Availability (as defined in the Credit Facility)) or Excess Availability fall below s tipulated levels. The Second Amendment provided for tiered thresholds. Through December 31, 2013, our Liquidity must not fall below $15,000. Thereafter, our Liquidity must not fall below $20,000. Our Excess Availability must not fall below $4,000 throu gh September 30, 2013. This minimum threshold increases by $250 monthly through December 31, 2013, at which time and thereafter, our Excess Availability must not fall below $5,000. As of September 30, 2013, our Liquidity was in excess of $15,000 and Exce ss Availability was in excess of $4,000; had we not met these thresholds at September 30, 2013, we would not have met the required 1.0:1.0 fixed charge coverage ratio test. Borrowings under the 2012 Credit Facility may not exceed a “borrowing base” that is determined monthly by our lenders based on available collateral, primarily certain accounts receivables, inventories and personal property and equipment. Under the terms of the 2012 Credit Facility, amounts outstanding bear interest at a per annum rate equal to a Daily Three Month LIBOR (as defined in the Credit Agreement), plus an interest rate margin, which is determined quarterly, based on the following thresholds:
Level |  | Thresholds |  | Interest Rate Margin
I |  | Liquidity ≤ $20,000 at any time during the period; or Excess Availability ≤ $7,500 at any time during the period; or Fixed charge coverage ratio < 1.0:1.0 |  | 4.00 percentage points
II |  | Liquidity > $20,000 at all times during the period; and Liquidity ≤ $30,000 at any time during the period; and Excess Availability $7,500; and Fixed charge coverage ratio ≥ 1.0:1.0 |  | 3.50 percentage points
III |  | Liquidity > $30,000 at all times during the period; and Excecss Availability > $7,500; and Fixed charge coverage ratio ≥ 1.0:1.0 |  | 3.00 percentage points
In addition, we are charged monthly in arrears for (1) an unused commitment fee of 0.50% per annum, (2) a collateral monitoring fee ranging from $1 to $2, based on the then-applicable interest rate margin, (3) a letter of credit fee based on the then-applicable interest rate margin and (4) certain other fees and charges as specified in the Credit Agreement. At September 30, 2013, we had $8,445 available to us under the 2012 Credit Facility, $6,460 in outstanding letters of credit with Wells Fargo and no outstanding borrowings. Prior to the Second Amendment, we were required to cash collateralize our letters of credit balance. As such, we had $7,155 classified as restricted cash within the Balance Sheet as of September 30, 2012. The Second Amendment removed the requirement to cash collateralize our letter of credit balance. As such, we have no restricted cash as of September 30, 2013. The $5,000 Wells Fargo Term Loan was provid ed for within the First Amendment to the 2012 Credit Facility. We were scheduled to pay monthly installments of $208 through February 2015 at an annual interest rate of 6% plus 3 Month LIBOR. The Second Amendment to the 2012 Credit Facility increased our total Term Loan by $10,147 to $13,708 at September 30, 2013. The Wells Fargo Term Loan is payable in equal monthly installments of $292 through August 9, 2016, with the residual unpaid principal balance due on that date. The Second Amendment also extend ed the term and reduced the annual interest rate to 5% plus 3 Month LIBOR, through September 13, 2014. Following that time, the Wells Fargo Term Loan amounts outstanding bear interest at a per annum rate equal to a Daily Three Month LIBOR plus an interest rate margin, which is determined quarterly, based on the following thresholds:
Level |  | Thresholds |  | Interest Rate Margin
I |  | Liquidity ≤ $20,000 at any time during the period; or Excess Availability ≤ $7,500 at any time during the period; or Fixed charge coverage ratio < 1.0:1.0 |  | 5.00 percentage points
II |  | Liquidity > $20,000 at all times during the period; and Liquidity ≤ $30,000 at any time during the period; and Excess Availability $7,500; and Fixed charge coverage ratio ≥ 1.0:1.0 |  | 4.50 percentage points
III |  | Liquidity > $30,000 at all times during the period; and Excecss Availability > $7,500; and Fixed charge coverage ratio ≥ 1.0:1.0 |  | 4.00 percentage points
The 2006 Revolving Credit Facility On May 12, 2006, we entered into a Loan and Security Agreement (the “Loan and Security Agreement”), for a revolving credit facility (the “2006 Credit Facility”) with Bank of America, N.A. and certain other lenders. On August 9, 2012, the 2006 Credit Facility was replaced by the 2012 Credit Facility. The 2006 Credit Facility and its amendments are filed as Exhibits to this Form 10-K and any descriptions thereof are qualified in their entirety by the terms of the 2006 Credit Facility or its respective amendments. On May 7, 2008, we renegotiated the terms of our 2006 Credit Facility and entered into an amended agreement with the same financial institutions. On April 30, 2010, we renegotiated the terms of, and entered in to an amendment to the Loan and Security Agreement pursuant to which the maturity date was extended to May 31, 2012. In connection with the amendment, we incurred an amendment fee of $200, which was amortized over 24 months. On December 15, 2011, we rene gotiated the terms of, and entered into an amendment to, the Loan and Security Agreement without incurring termination charges. Under the terms of the amended 2006 Credit Facility, the size of the facility was reduced to $40,000 and the maturity date was extended to November 12, 2012. Under the terms of the amended 2006 Credit Facility, we were required to cash collateralize all of our letters of credit issued by t he banks. The cash collateral wa s added to the borrowing b ase calculation at 100% through ou t the term of the agreement. T he 2006 Credit Facility required that we maintain a fixed charge coverage ratio of not less than 1.0:1.0 at any time that our aggregate amount of unrestricted cash on hand plus availability wa s less than $25,000 and, thereaft er, until such time as our aggregate amount of unrestricted cash on hand plus availability ha d been at least $25,000 for a period of 60 consecutive days. The amended Agreement also called for cost of borrowings of 4.0% over LIBOR per annum. Cost for lett ers of credit was the same as borrowings and also include d a 25 basis point “fronting fee.” All other terms and conditions remained unchanged. In connection with the amendment, we incurred an amendment fee of $60 which, together with unamortized balance of the prior amendment was amortized using the straight line method through August 30, 2012. On August 9, 2012, the amended 2006 Credit Facility was replaced by the 2012 Credit Facility. The 2006 Credit Facility was guaranteed by our subsidiaries and secured by first priority liens on substantially all of our subsidiaries’ existing and future acquired assets, exclusive of collateral provided to our surety providers. The 2006 Credit Facility contained customary affirmative, negative and financial covena nts. The 2006 Credit Facility also restricted us from paying cash dividends and placed limitations on our ability to repurchase our common stock. Borrowings under the 2006 Credit Facility could not exceed a “borrowing base” that was determined monthly by our lenders based on available collateral, primarily certain accounts receivables and inventories. Under the terms of the 2006 Credit Facility in effect as of August 30, 2012, interest for loans and letter of credit fees was based on our Total Liquidity, w hich is calculated for any given period as the sum of average daily availability for such period plus average daily unrestricted cash on hand for such period as follows:
|  |  |  | Annual Interest Rate for
Total Liquidity |  | Annual Interest Rate for Loans |  | Letters of Credit
Greater than or equal to $60,000 |  | LIBOR plus 3.00% or Base Rate plus 1.00% |  | 3.00% plus 0.25% fronting fee
Greater than $40,000 and less than $60,000 |  | LIBOR plus 3.25% or Base Rate plus 1.25% |  | 3.25% plus 0.25% fronting fee
Less than or equal to $40,000 |  | LIBOR plus 3.50% or Base Rate plus 1.50% |  | 3.50% plus 0.25% fronting fee
For the year ended September 30, 2012, we paid no interest for loans under the 2006 Credit Facility and had a weighted average interest rate, including fronting fees, of 3.49% for letters of credit. In addition, we were charged monthly in arrears (1) an unused commitment fee of 0.50%, and (2) certain other fees and charges as specified in the Loan and Security Agreement, as amended. As of August 9, 2012, we were subject to the financial covenant under the 2006 Credit Facility requiring that we maintain a fixed charge coverage ratio of not less than 1.0:1.0 at any time that our aggregate amount of unrestricted cash on hand plus availability is less than $25,000 and, thereafter, until such time as our aggregate amount of unrestr icted cash on hand plus avai lability has been at least $25,000 for a period of 6 0 consecutive days. As of August 9, 2012, our Total Liquidity was in excess of $25,000. The Tontine Term Loan On December 12, 2007, we entered into the Tontine Term Loan, a $25,000 senior subordinated loan agreement, with Tontine, which the Company terminated and prepaid in full subsequent to the first quarter of fiscal 2013, as further described below. The Tontine Term Loan bore interest at 11.0% per annum and was due on May 15, 20 13. Interest was payable quarterly in cash or in-kind at our option. Any interest paid in-kind would bear interest at 11.0% in addition to the loan principal. The Tontine Term Loan was subordinated to the 2012 Credit Facility. The Tontine Term Loan was an unsecured obligation of the Company and its subsidiary borrowers and contained no financial covenants or restrictions on dividends or distributions to stockholders. The Tontine Term Loan was amended on August 9, 2012 in connection with the Company entering into the 2012 Credit Facility. The amendment did not materially impact the Company’s obligations under the Tontine Term Loan. On April 30, 2010, we prepaid $15,000 of principal on the Tontine Term Loan. On May 1, 2010, Tontine assigned the Tontine Term Lo an to Tontine Capital Overseas Master Fund II, L.P, also a related party. Pursuant to its terms, we were permitted to repay the Tontine Term Loan at any time prior to the maturity date at par, plus accrued interest without penalty within the restrictions o f the 2012 Credit Facility. On February 13, 2013, we repaid the remaining $10,000 of principal on the Tontine Term Loan, plus accrued interest, with existing cash on hand and proceeds from the Wells Fargo Term Loan. Capital Lease The Company leases certain equipment under agreements, which are classified as capital leases and included in property, plant and equipment. Amortization of this equipment for the years ended September 30, 2013, 2012 and 2011 was $182, $182 and $172, respectively, which is included in depreciation expense in the accompanying statements of comprehe nsive income. At September 30, 2013, we had $6,148 in outstanding letters of credit with Bank of America. The terms surrounding the termination of the 2006 Credit Facility required that we cash collateralize 105% of our letter of credit balance. As such, we have $6,455 classified as restricted cash within the Balance Sheet as of September 30, 2012.

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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 SEC -Name Regulation S-X (SX) -Number 210 -Section 02 -Paragraph 19, 20, 22 -Article 5 Reference 3: 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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