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Credit Arrangements
 3 Months Ended
Nov. 30, 2011
Credit Arrangements [Abstract]  
Credit Arrangements

(7) Credit Arrangements

Euro Line of Credit

The Company's wholly-owned European subsidiary, Lindsay Europe, has an unsecured revolving line of credit with Societe Generale, a European commercial bank, under which it could borrow for working capital purposes up to 2.3 million Euros, which equates to approximately USD $3.1 million as of November 30, 2011 (the "Euro Line of Credit"). There were no borrowings outstanding on this credit agreement at November 30, 2011 and 2010 and August 31, 2011. Under the terms of the Euro line of Credit, borrowings, if any, bear interest at a floating rate in effect from time to time designated by the commercial bank as Euro Interbank Offered Rate plus 110 basis points, (2.57 percent at November 30, 2011). Unpaid principal and interest is due by January 31, 2012, which is the termination date of the Euro Line of Credit.

BSI Term Note

The Company entered into an unsecured $30.0 million Term Note and Credit Agreement, effective June 1, 2006, with Wells Fargo Bank, N.A. (the "BSI Term Note") to partially finance the acquisition of BSI. Borrowings under the BSI Term Note bear interest at a rate equal to LIBOR plus 50 basis points. The Company has fixed the rate at 6.05 percent through an interest rate swap as described in Note 8, Financial Derivatives. Principal is repaid quarterly in equal payments of $1.1 million over a seven-year period that began in September of 2006. The BSI Term Note is due June 10, 2013.

 

Revolving Credit Agreement

The Company has an unsecured $30.0 million Revolving Credit Note and Credit Agreement with Wells Fargo Bank, N.A. (the "Revolving Credit Agreement"). The Revolving Credit Agreement was amended on January 23, 2011 in order to extend the termination date from January 23, 2012 to January 23, 2014. The borrowings from the Amended Revolving Credit Agreement will primarily be used for working capital purposes and funding acquisitions. At November 30, 2011 and 2010 and August 31, 2011, there was no outstanding balance on the Revolving Credit Agreement.

Borrowings under the Revolving Credit Agreement bear interest at a rate equal to LIBOR plus 105 basis points, subject to adjustment as set forth in the Revolving Credit Agreement as amended. Interest is paid on a monthly to quarterly basis depending on the loan type. The Company also pays an annual commitment fee of 0.25 percent on the unused portion of the Amended Revolving Credit Agreement. Unpaid principal and interest is due by January 23, 2014.

The BSI Term Note and the Revolving Credit Agreement (collectively, the "Notes") each contain the same covenants, including certain covenants relating to the Company's financial condition. These include maintaining a funded debt to EBITDA ratio, a fixed charge coverage ratio, a current ratio and a tangible net worth requirement (all as defined in the Notes) at specified levels. Upon the occurrence of any event of default of these covenants specified in the Notes, including a change in control of the Company (as defined in the Notes), all amounts due thereunder may be declared to be immediately due and payable. At November 30, 2011 and 2010 and August 31, 2010, management believes that the Company was in compliance with all loan covenants.

Outstanding long-term debt consists of the following:

 

September 30, September 30, September 30,
       November 30,      November 30,      August 31,  

$ in thousands

      2011      2010      2011  

BSI Term Note

        7,500       $ 11,786       $ 8,571   

Less current portion

        (4,286 )       (4,286 )       (4,286 ) 
    

 

 

     

 

 

     

 

 

  

Total long-term debt

        3,214       $ 7,500       $ 4,285   
    

 

 

     

 

 

     

 

 

  

Principal payments due on long-term debt are as follows:

 

September 30,

Due within:

     

1 year

        4,286   

2 years

        3,214   
    

 

 

  
       7,500