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Note 6 - Debt
 3 Months Ended
Mar. 31, 2013
Debt Disclosure [Text Block]
6.  
DEBT

We have entered into a senior secured asset based revolving credit facility (the “Credit Facility”) of up to $20,000, with RBS Business Capital, a division of RBS Asset Finance, Inc. (“RBS”).  The proceeds from the Credit Facility can be used for general working capital purposes, general corporate purposes, and letter of credit foreign exchange support.  The Credit Facility has a maturity date of May 15, 2013, as discussed in greater detail below (the “Maturity Date”).  The Credit Facility is secured by substantially all of our assets.

Our available borrowing under the Credit Facility fluctuates from time to time based upon the amounts of eligible accounts receivable and eligible inventory.  Available borrowings under the Credit Facility, as amended by the amendments described below, equals the lesser of (1) $20,000 or (2) 85% of eligible accounts receivable plus the lesser of (a) up to 70% of the book value of our eligible inventory or (b) 85% of the appraised net orderly liquidation value of our eligible inventory.  The borrowing base under the Credit Facility is further reduced by (1) the face amount of any letters of credit outstanding, (2) any liabilities of ours under hedging contracts with RBS and (3) the value of any reserves as deemed appropriate by RBS.  We are required to have at least $3,000 available under the Credit Facility at all times.

On January 19, 2011, we entered in a First Amendment to Credit Agreement (the “First Amendment”) with RBS.  The First Amendment amended the Credit Facility as follows:

(i)   Eligible accounts receivable under the Credit Facility (for the determination of available borrowings) now include foreign (non-U.S.) accounts subject to credit insurance payable to RBS (formerly, such accounts were not eligible without arranging letter of credit facilities satisfactory to RBS).

(ii)  Decreased the interest rate that will accrue on outstanding indebtedness, as set forth in the following table:

 
Excess Availability
 
LIBOR Rate Plus
   
           
 
Greater than $10,000
    3.00 %  
             
 
Greater than $6,000 but less than or equal to $10,000
    3.25 %  
             
 
Greater than $3,000 but less than or equal to $6,000
    3.50 %  

On September 28, 2012, we entered into a Second Amendment to the Credit Facility (the “Second Amendment”) with RBS. The Second Amendment amended the Credit Facility to consent to the sale of the stock of RedBlack and to release any and all liens on RedBlack.

On February 15, 2013, we entered into a Third Amendment to the Credit Facility (the “Third Amendment”) with RBS. The Third Amendment amended the Credit Facility to extend the Maturity Date from February 17, 2013, to May 15, 2013, reduced the maximum amount available under the Credit Facility to $20,000, and reduced the unused line fee to 0.40% per year.

Interest currently accrues on outstanding indebtedness under the Credit Facility at LIBOR plus 3.00%.  We have the ability, in certain circumstances, to fix the interest rate for up to 90 days from the date of borrowing.

As of March 31, 2013, in addition to paying interest on the outstanding principal under the Credit Facility, we were required to pay an unused line fee of 0.40% on the unused portion of the $20,000 Credit Facility.  We must also pay customary letter of credit fees equal to the LIBOR rate and the applicable margin and any other customary fees or expenses of the issuing bank.  Interest that accrues under the Credit Facility is to be paid monthly with all outstanding principal, interest and applicable fees due on the Maturity Date, as extended by the Third Amendment.

We are required to maintain a fixed charge ratio of 1.20 to 1.00 or greater at all times as of and after March 28, 2010.  As of March 31, 2013, our fixed charge ratio was 3.00 to 1.00.  Accordingly, we were in compliance with the financial covenants of the Credit Facility.  All borrowings under the Credit Facility are subject to the satisfaction of customary conditions, including the absence of an event of default and accuracy of our representations and warranties.  The Credit Facility also includes customary representations and warranties, affirmative covenants and events of default.  If an event of default occurs, RBS would be entitled to take various actions, including accelerating the amount due under the Credit Facility, and all actions permitted to be taken by a secured creditor.

As of March 31, 2013, we had $-0- outstanding under the Credit Facility.  At March 31, 2013, the interest rate on the asset based revolver component of the Credit Facility was 3.20%.  As of March 31, 2013, we had approximately $13,965 of borrowing capacity under the terms of the revolver agreement, including outstanding letters of credit.  At March 31, 2013, we had no outstanding letters of credit related to this facility.