7. Substantially all of the Company's assets are pledged as collateral with its banks.

The Company has various different loans in place that together constitute the short-term and long-term loan balances shown in the balance sheet at March 31, 2012 and December 31, 2011. These are summarized in the following table:


Indebtedness	March 31, 2012						December 31, 2011
$000's	Long-term		Short-term		Total		Long-term		Short-term		Total
Term Loan	$	43,500	$	8,500	$	52,000	$	46,000	$	8,000	$	54,000
Notes payable on product acquisitions and asset purchase		27		6,396		6,423		5,917		6,460		12,377

Total Indebtedness	$	43,527	$	14,896	$	58,423	$	51,917	$	14,460	$	66,377

On January 10, 2011, the Company entered into a new $137,000 senior secured credit facility with a syndicate of banks led by Bank of the West. The facility consists of a revolving commitment of $75,000, and an initial term commitment of $62,000. Both the revolving line of credit and the term loan mature on January 10, 2016. The facility replaces the Company's previous $135,000 facility, which the Company has retired through borrowing from the new facility. As part of concluding this new credit agreement, the real estate loan was repaid in full.

On March 31, 2011, as required under the terms of the amended and restated credit agreement, the Company entered into a fixed interest rate swap covering 75% or $45,000 of term loan debt. The termination date for the interest rate swap is December 14, 2014. The interest rate swap has been designated and qualified as a cash flow hedge. Gains or losses on the interest rate swap will be reported as a component of other comprehensive income and reclassified into earnings in the same period or periods during which the hedged transactions affect earnings.

At March 31. 2012, the Company had in place one interest rate swap contract with a notional amount of $45,000 that is accounted for under FASB ASC 815 as a cash flow hedge. The effective portion of the gains or losses on the interest rate swap are reported as a component of other comprehensive income and reclassified into earnings in the same period or periods during which the hedged transactions affect earnings. Amounts in other comprehensive income expected to be reclassified to earnings in the coming 12 months are $(688). Amounts recorded in earnings for hedge ineffectiveness for the period ending March 2012 were immaterial.

The following tables illustrate the impact of derivatives on the Company's income statement for the quarter ended March 31, 2012.

The Effect of Derivative Instruments on the Statement of Financial Performance

For the Period Ended March 31


Derivatives in ASC 815 Cash Flow Hedging Relationships	Amount of Gain or (Loss) Recognized in OCI on Derivative (Effective Portion)						Location of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)		Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)						Location of Gain or (Loss) Recognized in Income on Derivative (Ineffective Portion)		Amount of Gain or (Loss) Recognized in Income on Derivative (Ineffective Portion)
Derivatives in ASC 815 Cash Flow Hedging Relationships	2012			2011					2012			2011					2012			2011
Interest rate contracts	$	(163	)	$	(263	)		Interest Expense	$	(185	)	$	(17	)		Interest Expense	$	(1	)	$	—
Foreign Exchange contracts		—			—			Cost of Sales		—			—					—			—

Total	$	(163	)	$	(263	)			$	(185	)	$	(17	)			$	(1	)	$	—


Derivatives Not Designated as Hedging Instruments under ASC 815	Location of Gain or (Loss) Recognized in Income on Derivative	Amount of Gain or (Loss) Recognized in Income on Derivative
		2012		2011
Foreign Exchange contracts	Other income/(expense)	$	120	$	—

Total		$	120	$	—

The Company has four key covenants to its senior, secured credit facility with its banking syndicate. The covenants are as follows: (1) the Company must maintain its borrowings below a certain consolidated funded debt ratio, (2) the Company has a limitation on its annual spending on the acquisition of fixed asset capital additions, (3) the Company must maintain a certain consolidated fixed charge coverage ratio, and (4) the Company must maintain a certain modified current ratio which compares the on hand value of receivables plus inventory with the level of its working capital revolver debt. As of March 31, 2012 the Company met all covenants in that credit facility.

At March 31, 2012, based on its performance against the most restrictive covenants listed above, the Company had the capacity to increase its' borrowings by up to $75,000 under the credit facility agreement.