Note

Indebtedness

March 1, 2017,

we entered into a

five

-year agreement, as amended most recently on

August 7, 2019 (

the “Credit Facility”) for an

$80,000

revolving line of credit (“Line of Credit”), a

$20,000

term loan (“Term Loan”) and up to

$2,500

of letters of credit with a banking syndicate of

four

banks. In addition, the Credit Facility provides a post-closing accordion feature which allows for the Company to request to increase the Line of Credit or Term Loan up to an additional

$100,000.

Line of Credit and Term Loan indebtedness bears interest at either: (

) LIBOR, as defined in the agreement, plus an applicable margin ranging from

1.50%

2.50%;

or (

) the alternate base rate (“ABR”), which is the greater of JPMorgan’s prime rate or the federal funds effective rate or the overnight bank funding rate plus

0.5%.

We elect the interest rate with each borrowing under the line of credit. In addition, there is an unused line fee of

0.15%

0.35%.

Letter of credit fees are based on the applicable LIBOR rate.

The Credit Facility is secured by all of our assets and requires us to maintain a ratio of funded debt to our trailing

four

quarters of EBIDTA (the “Leverage Ratio”), as defined in the agreement, of less than

3.0

1.0,

provided that, we

may

once during the term of the Credit Facility, in connection with a Permitted Acquisition for which the aggregate consideration paid or to be paid in respect thereof equals or exceeds

$20,000,

elect to increase the maximum Leverage Ratio permitted hereunder to (i)

3.50

1.00

for a period of

four

consecutive fiscal quarters commencing with the fiscal quarter in which such Permitted Acquisition occurs (the “Initial Holiday Period”) and (ii)

3.25

1.00

for the period of

four

consecutive fiscal quarters immediately following the Initial Holiday Period. The Credit Facility also requires us to maintain a minimum fixed charge coverage ratio of less than

1.25

1.0.

We were in compliance with all debt covenants as of

September 30, 2019

During the

six

months ended

September 30, 2019,

we paid off the balance of our Term Loan and our Line of Credit. We recorded the balance of our unamortized debt discount in the amount of

$238

to interest expense in conjunction with the extinguishment of the term loan. In

October 2019

we terminated the Credit Facility due to the issuance of the Notes.

August 12, 2019,

we issued the Notes, which consist of an aggregate principal amount of

$172,500

of convertible senior notes. The Notes mature on

August 15, 2025,

unless earlier repurchased or converted and bear interest at a rate of

1.375%

payable semi annually in arrears on

February 15

and

August 15

of each year beginning on

February 15, 2020.

The Notes are initially convertible at a conversion rate of

3.5273

shares of the common stock per

$1,000

principal amount of Notes, which is equivalent to an initial conversion price of approximately

$283.50

per share of common stock. Noteholders

may

convert their Notes at their option only in the following circumstances: (i) during any calendar quarter commencing after the calendar quarter ending on

December

31,

2019

(and only during such calendar quarter), if the last reported sale price per share of our common stock exceeds

130%

of the conversion price for each of at least

trading days during the

consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter; (ii) during the

five

consecutive business days immediately after any

consecutive trading day period (such

consecutive trading day period, the “measurement period”) in which the trading price per

$1,000

principal amount of Notes for each trading day of the measurement period was less than

98%

of the product of the last reported sale price per share of our common stock on such trading day and the conversion rate on such trading day; (iii) upon the occurrence of certain corporate events or distributions on our common stock, including certain distributions, the occurrence of a fundamental change (as defined in the indenture governing the Notes) or a transaction resulting in the Company’s common stock converting into other securities or property or assets; and (iv) at any time from, and including,

April

15,

2025

until the close of business on the

second

scheduled trading day immediately before the maturity date. Upon conversion, we will pay or deliver, as the case

may

be, cash, shares of our common stock, or a combination of cash and shares of our common stock, at our election. Our intent is to settle conversions entirely in shares of common stock. We will reevaluate this policy from time to time as conversion notices are received from holders of the Notes. The circumstances required to allow the holders to convert their Notes were

not

met during the

three

months ended

September

30,

2019.

As of

September 30, 2019,

the if-converted value of the Notes did

not

exceed the principal balance.

We accounted for the transaction by bifurcating the Notes into liability and equity components. The carrying amount of the liability component was

$141,427

upon issuance and was calculated by using the income approach and measuring the fair value of a similar debt instrument that does

not

have an associated convertible feature. The implied interest rate assuming

conversion option was estimated using the Tsiveriotis-Frenandes model (a Level

unobservable input); all other assumptions used in measuring the fair value represent what market participants would use in pricing the liability component, including market interest rates, credit standing, and yield curves, all of which are defined as Level

observable inputs. The carrying amount of the equity component representing the conversion option was

$31,073

and was determined by deducting the fair value of the liability component from the par value of the Notes. The equity component is

not

remeasured as long as it continues to meet the conditions for equity classification. The excess of the principal amount of the liability component over its carrying amount (the "Debt Discount") will be amortized to interest expense using the effective interest method over the

six

-year contractual term of the Notes.

Debt issuance costs related to the Notes comprised of discounts and commissions payable to the initial purchasers of

$5,175

and

third

party offering costs of

$255.

We allocated the total amount incurred to the liability and equity components of the Notes based on their relative values. Issuance costs attributable to the liability component were

$4,452

and will be amortized to interest expense using the effective interest method over the contractual term. Issuance costs attributable to the equity component were netted with the equity component in stockholders’ equity.

The net carrying amount of the Notes were as follows:

	September 30, 2019			March 31, 2019
Principal outstanding	$	172,500		$	--
Unamortized debt discount		(30,476	)		--
Unamortized debt issuance costs		(4,342	)		--
Net carrying value	$	137,682		$	--

The net carrying amount of the equity component of the Notes were as follows:

	September 30, 2019			March 31, 2019
Amount allocated to conversion option	$	31,073		$	--
Less: allocated issuance costs and taxes		(9,427	)		--
Equity component, net	$	21,646		$	--

We recognized interest expense on the Notes as follows:

	Three Months Ended September 30,				Six Months Ended September 30,
	2019		2018		2019		2018
Coupon interest expense at 1.375%	$	316	$	--	$	316	$	--
Amortization of debt discounts and issuance costs		707		--		707		--
Total	$	1,023	$	--	$	1,023	$	--

The effective interest rate of the liability component of the note is approximately

5.5%.