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Debt
 12 Months Ended
Mar. 31, 2012
Debt  
Debt

6.  Debt

 

 

 

March 31,

 

(Dollars in thousands)

 

2012

 

2011

 

Credit Facility

 

$

—

 

$

—

 

Reducing line of credit

 

—

 

2,500

 

Revolving line of credit

 

—

 

4,000

 

 

 

—

 

6,500

 

Less: current portion

 

—

 

5,000

 

Long-term portion

 

$

—

 

$

1,500

 

 

Credit Facility

 

In February 2012, we entered into a three year agreement for a $20,000,000 revolving line of credit and up to $1,000,000 of letters of credit (the “Credit Facility”).  Funds from the Credit Facility may be used for general working capital and corporate needs, retiring existing debt, or to support acquisitions and capital expenditures.

 

Under the Credit Facility, indebtedness bears interest at either: (1) LIBOR plus an applicable margin, ranging from 1.25% to 2.00%,; or (2) the bank’s commercial bank floating rate (“CBFR”), which is the greater of the bank’s prime rate or one month LIBOR + 2.50%, adjusted down, from 1.25% to 0.50%.  Management elects the interest rate with each borrowing under the line of credit.  There is also an unused capacity fee of 0.15% to 0.30%.  The adjustments and unused capacity fee depend on the ratio of funded debt to our trailing four quarters of EBITDA, as defined, with four tiers ranging from a ratio of less than one to greater than two.  Letter of credit fees are based on the applicable LIBOR rate.

 

The Credit Facility is collateralized by all assets of the Company.  The Credit Facility requires us to maintain a ratio of funded debt to trailing four quarters of EBIDTA, as defined, of 2.5 to 1.0, and a minimum fixed charge coverage ratio of 1.5 to 1.0.

 

Lines of Credit

 

To help finance the acquisition of the assets of Apex Laboratories, Inc., SGM Biotech, Inc., and the related building that houses the SGM Biotech facility, we entered into a credit facility consisting of: a) 36 month reducing line of credit for $3,000,000, which was retired in February 2012; and b) revolving line of credit for $4,000,000 maturing on December 23, 2011, which was retired in December 2011. Both of these lines of credit were subject to a variable rate of interest and a rate floor.