Note 6 - Line of Credit

12 Months Ended

Dec. 31, 2015

6 .	LINE OF CREDIT :

On October 26, 2015, the Company entered into a Loan and Security Agreement (the “Agreement”) with Bank of America, N.A. The Agreement expires on October 25, 2018 and provides for revolving loans and letters of credit in the aggregate amount of up to $60 million, subject to a borrowing base. The borrowing base is calculated by applying various advance rates to eligible accounts receivable, costs and expected earnings in excess of billings, inventories, and fixed assets, subject to various exclusions, adjustments, and sublimits.

Borrowings under the Agreement bear interest at rates related to LIBOR plus 1.75% to 2.25%, or at Bank of America’s prime rate plus 0.75% to 1.25%. Borrowings under the Agreement are secured by substantially all of the Company’s assets. On December 31, 2015, there were no outstanding borrowings, and the Company’s borrowing capacity was $23.2 million, net of outstanding letters of credit, under the Agreement.

The Agreement also contains customary representations, warranties and events of default, which include the occurrence of events or circumstances which have a Material Adverse Effect, as defined in the Agreement. Payment of outstanding advances may be accelerated, at the option of Bank of America, should the Company default in its obligations under the Agreement.

In conjunction with entering into the Loan and Security Agreement, the Company terminated the Second Amended and Restated Credit Agreement dated as of October 24, 2012. The Company incurred incremental interest expense of approximately $0.4 million during the fourth quarter of 2015 related to the write-off of unamortized financing costs associated with the terminated agreement.

At December 31, 2014, the Company had $45.6 million of borrowings on its former line of credit agreement. Under that agreement, the Company’s borrowings bore interest at LIBOR plus 1.75% to 2.75%, or the lending institution’s prime rate plus 0.75% to 1.75%. The Company was able to borrow at LIBOR plus 2.0% at December 31, 2014. The Credit Agreement had a weighted average rate of 2.43% at December 31, 2014.

Interest expense for continuing operations from Line of Credit borrowings, Term Notes, and capital leases was $1.4 million, net of amounts capitalized of $0.1 million in 2015, $2.3 million, net of amounts capitalized of $0.2 million in 2014 and $3.6 million, net of amounts capitalized of $0.4 million in 2013.