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Short Term Borrowings And Long Term Debt | 3 Months Ended
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Sep. 30, 2011
Short Term Borrowings And Long Term Debt |
Short Term Borrowings And Long Term Debt | (7) Short Term Borrowings and Long Term Debt Short-Term Borrowings The Company has a €6.0 million secured revolving credit facility which bears interest at the 30 day Euro Interbank Offered Rate ("EURIBOR") plus a spread of 1.25 per annum. This facility is secured by the assets of our European operations and is guaranteed by ScanSource, Inc. The outstanding balances at September 30, 2011 and June 30, 2011 are as follows:
|  | September 30, 2011 |  |  | June 30, 2011 |
|  |  | (in thousands) |
Short-term borrowings |  | $ | 4,079 |  |  | $ | 3,164 |
Revolving Credit Facility On September 28, 2007, the Company entered into a $250 million multi-currency revolving credit facility with a syndicate of banks that matures on September 28, 2012. This revolving credit facility has a $50 million accordion feature that allows the Company to increase the availability to $300 million subject to obtaining commitments for the incremental capacity from existing or new lenders. The facility is guaranteed by the Company and its domestic subsidiaries and is secured by substantially all of the domestic assets of the Company and its domestic subsidiaries. The facility bears interest at a rate equal to a spread over the applicable London Interbank Offered Rate ("LIBOR") or prime rate, as chosen by the Company. This spread is dependent on the Company's ratio of funded debt to EBITDA (as defined in the credit facility) and ranges from 0.50% to 1.25% for LIBOR-based loans, and from 0.00% to 0.25% for prime rate-based loans. The spread in effect as of September 30, 2011 was 0.50% for LIBOR-based loans and 0.00% for prime rate-based loans. The agreement subjects the Company to certain financial covenants, including minimum fixed charge and leverage ratio covenants. The agreement also has certain restrictive covenants that, among other things, place limitations on the payment of cash dividends. The Company was in compliance with all covenants under the credit facility as of September 30, 2011. The outstanding balances at September 30, 2011 and June 30, 2011 are as follows:
|  | September 30, 2011 |  |  | June 30, 2011 |
|  | (in thousands) |
Current portion of revolving credit facility |  | $ | 24,573 |  |  | $ | — |
Long-term portion of revolving credit facility |  |  | 44,958 |  |  |  | 26,513 |
Total borrowings on revolving credit facility |  | $ | 69,531 |  |  | $ | 26,513 |
Subsequent to the quarter ended September 30, 2011, the Company amended and restated its $250 million revolving credit facility on October 11, 2011. Of the balance outstanding at September 30, 2011, $24.6 million was repaid by October 11, 2011 and classified as short-term. The remaining portion of the Company's borrowings outstanding under the revolving credit facility are classified as long-term as the Company had the intent and ability to refinance them for a period exceeding 12 months from the balance sheet date. During the quarter ended September 30, 2011, the Company borrowed $394.8 million on the revolving credit facility. The Company repaid $351.3 million during the same period. The net borrowing position at the end of the quarter was $69.5 million. Additionally, the average daily balance on the revolving credit facility was $53.6 million for the quarter ended September 30, 2011. For the quarter ended September 30, 2010, the Company had no borrowings and repayments on the revolving credit facility. Long-Term Debt On August 1, 2007, the Company entered into an agreement with the State of Mississippi in order to provide financing for the acquisition and installation of certain equipment to be utilized at the Company's current Southaven, Mississippi distribution facility, through the issuance of an industrial development revenue bond. The bond matures on September 1, 2032 and accrues interest at the 30-day LIBOR rate plus a spread of 0.85%. The terms of the bond allow for payment of interest only for the first 10 years of the agreement, and then, starting on September 1, 2018 through 2032, principal and interest payments are due until the maturity date or the redemption of the bond. As of September 30, 2011, the Company was in compliance with all covenants under this bond. On January 2, 2008, the Company entered into a $25 million promissory note with a third party lender. This note payable accrues interest on the unpaid balance at a rate per annum equal to the 30-day LIBOR plus 0.65% and matures on September 28, 2012. The terms of the note payable allow for payments to be due and payable in consecutive monthly payments of accrued interest only, commencing on January 31, 2008, and continuing on the last day of each month thereafter until the principal balance is fully re-paid. This note may be prepaid in whole or in part at any time without penalty. Under the terms of this agreement, the Company has agreed not to encumber its headquarters' property, except as permitted by the lender. As of September 30, 2011, the Company was in compliance with all covenants under this note payable. Subsequent to the balance sheet date but before the date of this filing, the Company paid the $25 million promissory note in full with proceeds from the Amended and Restated Credit Agreement executed on October 11, 2011. As the Company had the intent and ability to refinance the note for a period exceeding 12 months from the balance sheet date, the note was classified as long-term. The book value of debt listed above is considered to approximate fair value, as our debt instruments are indexed to LIBOR or the prime rate using the market approach (Level 2 criteria).
|  | September 30, 2011 |  |  | June 30, 2011 |
|  | (in thousands) |
Industrial Development Revenue Bond, monthly payments of interest only, 1.04% variable interest rate at September 30, 2011 and maturing on September 1, 2032 |  | $ | 5,429 |  |  | $ | 5,429 |
Unsecured note payable to a bank, monthly payments of interest only, 0.87% variable interest rate at September 30, 2011 and maturing on September 28, 2012 |  |  | 25,000 |  |  |  | 25,000 |
|  |  | 30,429 |  |  |  | 30,429 |
Less current portion |  |  | — |  |  |  | — |
Long-term portion |  | $ | 30,429 |  |  | $ | 30,429 |

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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 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 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 129 -Paragraph 2, 4 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 3: 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 4: 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 + Details
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