NOTES PAYABLE AND CREDIT AGREEMENT

6 Months Ended

Jun. 30, 2014

NOTES PAYABLE AND CREDIT AGREEMENT [Abstract]

9. NOTES PAYABLE AND CREDIT AGREEMENT

Amounts outstanding under the Credit Agreement and notes payable as of June 30, 2014 and December 31, 2013 consisted of the following (in thousands):

	2014			2013
Credit Agreement average effective interest rate of 2.5% inclusive of unused fee	$	45,000		$	40,000
Various notes payable with $850 plus accrued interest due in the next year, interest accrues at 3.25% per annum		1,300			1,475
		46,300			41,475
Less current portion		(850	)		(825	)
	$	45,450		$	40,650

Effective December 5, 2013, the Company entered into an Amended and Restated Credit Agreement with a commitment for a $125.0 million revolving credit facility with a maturity date of November 30, 2018 (“Credit Agreement”). The Credit Agreement is unsecured and has loan covenants, including requirements that the Company comply with a consolidated fixed charge coverage ratio and consolidated leverage ratio. Proceeds from the Credit Agreement may be used for working capital, acquisitions, purchases of the Company’s common stock, dividend payments to the Company’s common shareholders, capital expenditures and other corporate purposes. The pricing grid is based on the Company’s consolidated leverage ratio with the applicable spread over LIBOR ranging from 1.5% to 2.5% or the applicable spread over the Base Rate ranging from 0.1% to 1%. Fees under the Credit Agreement include an unused commitment fee ranging from 0.1% to 0.25% depending on the Company’s consolidated leverage ratio and the amount of funds outstanding under the Credit Agreement.

On June 30, 2014, $45.0 million was outstanding on the Credit Agreement resulting in $80.0 million of availability. As of June 30, 2014, the Company was in compliance with all of the covenants thereunder.

The Company generally enters into various notes payable as a means of financing a portion of its acquisitions. In conjunction with the acquisition in 2014, the Company entered into a note payable in the amount of $400,000, payable in two annual equal installments of $200,000 plus any accrued and unpaid interest. Interest accrues at 3.25% per annum. In conjunction with the acquisitions in 2013, the Company entered into notes payable in the aggregate amount of $1.3 million, each payable in two annual equal installments totaling $650,000 plus any accrued and unpaid interest. Interest accrues at 3.25% per annum, subject to adjustment. In conjunction with the acquisitions in 2012, the Company entered into notes payable in the aggregate amount of $350,000, each payable in two annual equal installments totaling $175,000 plus any accrued and unpaid interest. Interest accrues at 3.25% per annum.

Aggregate annual payments of principal required pursuant to the Credit Agreement and the above notes payable subsequent to June 30, 2014 are as follows (in thousands):

During the twelve months ended June 30, 2015	$	850
During the twelve months ended June 30, 2016		450
During the twelve months ended June 30, 2019		45,000
	$	46,300

- 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+ Details