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Term Loans Payable And Revolving Line Of Credit | 12 Months Ended
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Aug. 31, 2018
Term Loans Payable And Revolving Line Of Credit [Abstract] |
Term Loans Payable And Revolving Line Of Credit | ﻿ ﻿ 5.TERM LOANS PAYABLE AND REVOLVING LINE OF CREDIT ﻿ W e have entered into an amended and restated secured credit agreement (the Restated Credit Agreement) with our existing lender. The Restated Credit Agreement provides us with a revolving line of credit facility and the ability to borrow on other instruments, such as term loans. We generally renew the Restated Credit Agreement on a regular basis to maintain the long-term availability of this credit facility. ﻿ During fiscal 2017, we entered into the Sixth, Seventh, and Eighth Modification Agreements to the Restated Credit Agreement. The Sixth Modification and Eighth Modification agreements adjusted the definition of EBITDAR in the funded debt to EBITDAR and fixed charge coverage ratios applicable to our debt covenants to include the change in deferred revenue from subscription sales. The Seventh Modification Agreement extended the maturity date of the Restated Credit Agreement. On August 17, 2018, we entered into the Ninth Modification Agreement, which extended the maturity date of the Restated Credit Agreement by one year to March 31, 2021. ﻿ In connection with the modification agreements to the Restated Credit Agreement, we have entered into 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. ﻿ The effective interest rate on our term loans and revolving line of credit was 3.9 percent at August 31, 2018 and 3.1 percent at August 31, 2017. ﻿ Term Loans Payable ﻿ In connection with the terms of our modified Restated Credit Agreement, we obtained a $15.0 million term loan and have the ability to obtain additional term loans in increments of $5.0 million up to a maximum of $40.0 million. Each additional term loan reduces the amount available to borrow on the revolving line of credit facility on a dollar-for-dollar basis. We obtained additional $5.0 million term loans during each of September 2016 and August 2017. Interest on the term loans is payable monthly at LIBOR plus 1.85 percent per year and each term loan matures three years from the date of borrowing. Interest is payable monthly and principal payments are due and payable on the first day of each January, April, July, and October. Principal payments are equal to the original amount of each term loan divided by 16 and any remaining principal at the maturity date is immediately payable or may be rolled into a new term loan. The proceeds from each term loan may be used for general corporate purposes and each term loan may be repaid sooner than the maturity date at our discretion. The following information applies to our term loans payable at August 31, 2018 (in thousands): ﻿
﻿ |  |  |  |  |  |  |  |  |
﻿ |  |  |  |  |  |  |  |  |
﻿ |  |  | Original Principal |  |  | Quarterly Principal |  |  | Outstanding
﻿Maturity Date |  |  | Amount |  |  | Payment Amount |  |  | Principal
﻿May 24, 2019 |  | $ | 15,000 |  | $ | 938 |  | $ | 6,563
﻿August 29, 2019 |  |  | 5,000 |  |  | 313 |  |  | 2,500
﻿August 29, 2020 |  |  | 5,000 |  |  | 313 |  |  | 3,750
﻿ |  |  |  |  |  |  |  | $ | 12,813
﻿ Principal payments by fiscal year through the maturity dates of the term loans are as follows (in thousands): ﻿ ﻿
﻿ |  |
﻿YEAR ENDING |  |
﻿AUGUST 31, |  |
﻿2019 | $ | 10,313
﻿2020 |  | 2,500
﻿ | $ | 12,813
﻿ Revolving Line of Credit ﻿ The key terms and conditions of our revolving line of credit are as follows: ﻿
| · |  | Available Credit – $30.0 million as of August 31, 2018.
﻿
| · |  | Maturity Date – March 31, 2021.
﻿
| · |  | Interest Rate – The effective interest rate is LIBOR plus 1.85 percent per annum and the unused credit fee on the line of credit is 0.25 percent per annum.
﻿
| · |  | Financial Covenants – The Restated Credit Agreement 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 1.15 to 1.0; (c) an annual limit on capital expenditures (not including capitalized curriculum development) of $8.0 million; and (d) consolidated accounts receivable must exceed 150 percent of the amount outstanding on the line of credit.
﻿ 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, 2018, we believe that we were in compliance with the terms and covenants applicable to our Restated Credit Agreement and its modifications. We had $11.3 million outstanding on our revolving line of credit at August 31, 2018, and $4.4 million outstanding on August 31, 2017.

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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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -URI http://asc.fasb.org/topic&trid=2208564 + Details
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