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Line Of Credit | 12 Months Ended
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Aug. 31, 2015
Line Of Credit [Abstract] |
Line Of Credit | 5.LINE OF CREDIT During fiscal 2011, we entered into an amended and restated secured credit agreement (the Restated Credit Agreement) with our existing lender. The Restated Credit Agreement provided a revolving line of credit facility (the Revolving Line of Credit) with a maximum borrowing amount of $10.0 million and a term loan with maximum available borrowing of up to $5.0 million. The term loan was repaid in full as of August 31, 2013. On March 31, 2015, we entered into the Fourth Modification Agreement to the Restated Credit Agreement. The primary purposes of the Fourth Modification Agreement are to (i) increase the maximum available credit on the Revolving Line of Credit; (ii) extend the maturity date of the Restated Credit Agreement; (iii) reduce the applicable interest rate on borrowings; (iv) reduce the unused commitment fee; and (v) increase the cap for permitted business acquisitions from $5.0 million to $10.0 million. The Revolving Line of Credit may be used for general business purposes. The key terms and conditions of the Revolving Line of Credit of the Fourth Modification Agreement are as follows:
| · |  | Available Credit – The maximum borrowing amount was increased from $10.0 million to $30.0 million.
| · |  | Maturity Date – The maturity date of the Revolving Line of Credit is now March 31, 2018.
| · |  | Interest Rate – The effective interest rate was reduced from LIBOR plus 2.50 percent to LIBOR plus 1.85 percent per annum. The unused credit fee on the facility was reduced from 0.33 percent to 0.25 percent per annum.
| · |  | Financial Covenants – The Revolving Line of Credit requires us to be in compliance with specified financial covenants, including (a) a funded debt to EBITDAR (earnings before interest, taxes, depreciation, amortization, and rental expense) ratio of less than 3.00 to 1.00; (b) a fixed charge coverage ratio greater than 1.5 to 1.0; (c) an annual limit on capital expenditures (not including capitalized curriculum development) of $8.0 million; and (d) outstanding borrowings on the Revolving Line of Credit may not exceed 150 percent of consolidated accounts receivable.
In the event of noncompliance with these financial covenants and other defined events of default, the lender is entitled to certain remedies, including acceleration of the repayment of any amounts outstanding on the Restated Credit Agreement. At August 31, 2015, we believe that we were in compliance with the terms and covenants applicable to the Fourth Modification Agreement. The effective interest rate on our Revolving Line of Credit was 2.0 percent at August 31, 2015 and 2.7 percent August 31, 2014. In connection with the Restated Credit Agreement, we entered into a promissory note, a security agreement, repayment guaranty agreements, and a pledge and security agreement. These agreements pledge substantially all of our assets located in the United States to the lender as collateral for borrowings under the Restated Credit Agreement and subsequent amendments. We had no outstanding borrowings on the Revolving Line of Credit at August 31, 2015 or August 31, 2014.

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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 505 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21475-112644 Reference 2: 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 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 + Details
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