XML 72 R13.htm IDEA: XBRL DOCUMENT v2.4.1.9
CREDIT AGREEMENTS AND BORROWINGS
 12 Months Ended
Oct. 31, 2014
CREDIT AGREEMENTS AND BORROWINGS [Abstract]  
CREDIT AGREEMENTS AND BORROWINGS
5. CREDIT AGREEMENTS AND BORROWINGS

 

At October 31, 2012, we were party to a credit agreement that provided us with a $15.0 million revolving credit facility and maximum outstanding letters of credit of $3.0 million. Borrowings under this agreement could have been used for general corporate purposes and bore interest at a floating rate, based either on LIBOR or the prime rate, plus an applicable margin.  The agreement contained financial covenants, including restrictions on incurring additional debt, making acquisitions, or paying dividends if we report a cumulative net loss for four consecutive quarters.

 

On December 7, 2012, we entered into an agreement (the “U.S. credit agreement”) with a financial institution that provided us with a $12.5 million unsecured revolving credit and letter of credit facility. The U.S. credit agreement permitted the issuance of up to $3.0 million in letters of credit. On May 9, 2014, the maximum amount for outstanding letters of credit under our U.S. credit agreement was increased from $3.0 million to $5.0 million in order to guarantee a new revolving credit facility in Taiwan.

 

On December 5, 2014, we amended our U.S. credit agreement to increase the cash dividend allowance from $3.0 million per calendar year to $4.0 million per calendar year and to extend the scheduled maturity date to December 7, 2016.

 

Borrowings under the U.S. credit agreement bear interest at a LIBOR-based rate or a floating rate of 1% above the prevailing prime rate. The floating rate will not less than the greatest of (a) a one month LIBOR-based rate plus 1.00% per annum, (b) the federal funds effective rate plus 0.50% per annum, and (c) the prevailing prime rate. The rate we must pay for that portion of the U.S. credit agreement which is not utilized is 0.05% per annum.

 

The U.S. credit agreement contains customary financial covenants, including a covenant that permits us to make investments in subsidiaries of up to $5.0 million and a minimum working capital of $90.0 million and a minimum tangible net worth of $120.0 million. The U.S. credit agreement permits us to pay cash dividends in an amount not to exceed $4.0 million per calendar year, so long as we are not in default before and after giving effect to such dividends.  

 

We have a £1.0 million revolving credit facility in the United Kingdom and a €1.5 million revolving credit facility in Germany. On May 12, 2014, we established a Taiwan credit facility in the amount of 100.0 million New Taiwan Dollars (approximately $3.3 million) with an expiration date of May 12, 2015. Our Taiwan credit facility is backed by letters of credit under our U.S. credit facility. We also have a 40.0 million Chinese Yuan (approximately $6.6 million) credit facility in China that will expire on February 24, 2015.

 

All of our credit facilities are unsecured.

 

At October 31, 2014, we had $3.3 million of borrowings under our China credit facility which bears interest at 5.6% annually (variable rate). We had no other debt or borrowings under any of our other credit facilities. At October 31, 2013, we had $3.3 million of borrowings outstanding under our credit facility in China and $383,000 of secured borrowings assumed in the LCM acquisition. At October 31, 2014, we were in compliance with all covenants contained in the related credit agreements and, as of that date, we had unutilized credit facilities of $18.7 million.