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LONG-TERM DEBT | 12 Months Ended
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Sep. 30, 2014
LONG-TERM DEBT [Abstract] |
LONG-TERM DEBT |
7. | LONG-TERM DEBT:
Long-term debt at September 30, 2014 and 2013 consisted of the following:
|  | 2014 |  |  | 2013 |
Revolving credit facilities |  | $ | 702,055 |  |  | $ | 335,420 |
Notes payable to banks |  |  | 13,315 |  |  |  | 21,530 |
Short-term borrowings |  |  | 6,410 |  |  |  | 8,612 |
Capital lease obligations |  |  | 7,475 |  |  |  | 9,093 |
|  |  | 729,255 |  |  |  | 374,655 |
Less current maturities |  |  | (15,228 | ) |  |  | (23,587 | )
|  | $ | 714,027 |  |  | $ | 351,068 |
The Company has a domestic Revolving Credit Facility with a syndicate of financial institutions. In connection with the acquisition of Schawk in July 2014, the Company entered into amendments to the Revolving Credit Facility to amend certain terms of the Revolving Credit Facility and increase the maximum amount of borrowings available under the facility from $500,000 to $900,000. Borrowings under the amended facility bear interest at LIBOR plus a factor ranging from .75% to 2.00% (1.75% at September 30, 2014) based on the Company's leverage ratio. The leverage ratio is defined as net indebtedness divided by EBITDA (earnings before interest, taxes, depreciation and amortization). The Company is required to pay an annual commitment fee ranging from .15% to .25% (based on the Company's leverage ratio) of the unused portion of the facility. The Revolving Credit Facility requires the Company to maintain certain leverage and interest coverage ratios. A portion of the facility (not to exceed $30,000) is available for the issuance of trade and standby letters of credit. Outstanding borrowings on the Revolving Credit Facility at September 30, 2014 and 2013 were $680,000 and $305,000, respectively. The weighted-average interest rate on outstanding borrowings at September 30, 2014 and 2013 was 2.53% and 2.81%, respectively. The Company has entered into the following interest rate swaps:
Effective Date | Amount | Fixed Interest Rate | Interest Rate Spread at September 30, 2014 | Maturity Date
October 2011 | $25,000 | 1.67% | 1.75% | October 2015
November 2011 | 25,000 | 2.13% | 1.75% | November 2014
March 2012 | 25,000 | 2.44% | 1.75% | March 2015
June 2012 | 40,000 | 1.88% | 1.75% | June 2022
August 2012 | 35,000 | 1.74% | 1.75% | June 2022
September 2012 | 25,000 | 3.03% | 1.75% | December 2015
September 2012 | 25,000 | 1.24% | 1.75% | March 2017
November 2012 | 25,000 | 1.33% | 1.75% | November 2015
May 2014 | 25,000 | 1.35% | 1.75% | May 2018
The Company enters into interest rate swaps in order to achieve a mix of fixed and variable rate debt that it deems appropriate. The interest rate swaps have been designated as cash flow hedges of the future variable interest payments under the Revolving Credit Facility which are considered probable of occurring. Based on the Company's assessment, all of the critical terms of each of the hedges matched the underlying terms of the hedged debt and related forecasted interest payments, and as such, these hedges were considered highly effective. The fair value of the interest rate swaps reflected an unrealized gain, net of unrealized losses, of $330 ($201 after tax) and an unrealized loss, net of unrealized gains, of $908 ($554 after tax) at September 30, 2014 and 2013, respectively, that is included in shareholders' equity as part of accumulated other comprehensive income ("AOCI"). Assuming market rates remain constant with the rates at September 30, 2014, a loss (net of tax) of approximately $905 included in AOCI is expected to be recognized in earnings as an adjustment to interest expense over the next twelve months. At September 30, 2014 and 2013, the interest rate swap contracts were reflected in the consolidated balance sheets as follows:
Derivatives |  | 2014 |  |  | 2013 |
Current assets |  |  |  |  |  |
Other current assets |  | $ | 324 |  |  | $ | 427 |
Long-term assets |  |  |  |  |  |  |  |
Other assets |  |  | 2,133 |  |  |  | 3,309 |
Current liabilities: |  |  |  |  |  |  |  |
Other current liabilities |  |  | (1,808 | ) |  |  | (2,590 | )
Long-term liabilities: |  |  |  |  |  |  |  |
Other liabilities |  |  | (319 | ) |  |  | (2,054 | )
Total derivatives |  | $ | 330 |  |  | $ | (908 | )
The loss recognized on derivatives was as follows:
| Location of | Amount of
Derivatives in | Loss | Loss
Cash Flow Hedging | Recognized in | Recognized in Income
Relationships | Income on Derivatives | on Derivatives
|  | 2014 | 2013
Interest rate swaps | Interest expense | $(4,318) | $(4,170)
The Company recognized the following losses in accumulated other comprehensive income ("AOCI"):
|  |  |  | Location of Gain |  | Amount of Loss |
|  |  |  | or (Loss) |  | Reclassified from |
Derivatives in |  | Amount of Gain or |  | Reclassified from |  | AOCI |
Cash Flow |  | (Loss) Recognized in |  | AOCI |  | into Income |
Hedging |  | AOCI on Derivatives |  | into Income |  | (Effective Portion*) |
Relationships |  | 2014 |  |  | 2013 |  | (Effective Portion*) |  | 2014 |  |  | 2013 |
Interest rate swaps |  |  | $(1,879) |  |  |  | $2,474 |  | Interest expense |  |  | $(2,634) |  |  |  | $(2,544) |
*There is no ineffective portion or amount excluded from effectiveness testing. |
The Company, through certain of its European subsidiaries, has a credit facility with a European bank. The maximum amount of borrowings available under this facility is 25.0 million Euros ($31,580). Outstanding borrowings under the credit facility totaled 17.5 million Euros ($22,055) and 22.5 million Euros ($30,434) at September 30, 2014 and 2013, respectively. The weighted-average interest rate on outstanding borrowings under this facility at September 30, 2014 and 2013 was 1.35% and 1.37%, respectively. The Company, through its German subsidiary, Saueressig GmbH & Co. KG ("Saueressig"), has several loans with various European banks. Outstanding borrowings on these loans totaled 1.2 million Euros ($1,576) and 1.7 million Euros ($2,310) at September 30, 2014 and 2013, respectively. The weighted-average interest rate on outstanding borrowings of Saueressig at September 30, 2014 and 2013 was 3.96% and 4.04%, respectively. The Company, through its German subsidiary, Wetzel GmbH ("Wetzel"), has several loans with various European banks. Outstanding borrowings under these loans totaled 2.9 million Euros ($3,624) and 7.4 million Euros ($10,000) at September 30, 2014 and 2013, respectively. The weighted-average interest rate on outstanding borrowings of Wetzel at September 30, 2014 and 2013 was 5.67% and 7.48%, respectively. The Company, through its wholly-owned subsidiary, Matthews International S.p.A., has several loans with various Italian banks. Outstanding borrowings on these loans totaled 5.5 million Euros ($6,922) and 5.1 million Euros ($6,871) at September 30, 2014 and 2013, respectively. Matthews International S.p.A. also has three lines of credit totaling 11.3 million Euros ($14,312) with the same Italian banks. Outstanding borrowings on these lines were 4.8 million Euros ($6,063) and 5.6 million Euros ($7,639) at September 30, 2014 and 2013, respectively. The weighted-average interest rate on outstanding Matthews International S.p.A. borrowings at September 30, 2014 and 2013 was 3.15% and 3.16%, respectively. As of September 30, 2014 and 2013, the fair value of the Company's long-term debt, including current maturities, which is classified as Level 2 in the fair value hierarchy, approximated the carrying value included in the Consolidated Balance Sheets. Aggregate maturities of long-term debt, including short-term borrowings and capital leases, follows:
2015 |  | $ | 15,228 |
2016 |  |  | 6,115 |
2017 |  |  | 23,853 |
2018 |  |  | 680,803 |
2019 |  |  | 213 |
Thereafter |  |  | 3,043 |
|  | $ | 729,255 |

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