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LONG-TERM DEBT AND LINES OF CREDIT
 12 Months Ended
Apr. 29, 2012
LONG-TERM DEBT AND LINES OF CREDIT
11.
LONG-TERM DEBT AND LINES OF CREDIT
 
A summary of long-term debt follows:
 
 
  
April 29,
     May 1,  
(dollars in thousands)
  
2012
    
2011
  
unsecured senior term notes
   $ 8,800       11,000  
canadian government loan
     323       547  
      9,123       11,547  
current maturities of long-term debt
     (2,404 )     (2,412 )
long-term debt, less current maturities
   $ 6,719       9,135  

Unsecured Term Notes

In connection with the Bodet & Horst acquisition, we entered into a note agreement dated August 11, 2008. This agreement provided for the issuance of $11.0 million of unsecured term notes with a fixed interest rate of 8.01% and a term of seven years. Principal payments of $2.2 million per year are due on the notes beginning August 11, 2011. The principal payments are payable over an average term of 3.3 years through August 11, 2015. Any principal prepayments will be assessed a penalty as defined in the agreement. The agreement contains customary financial and other covenants as defined in the agreement.

We made our first principal payment of $2.2 million associated with this note agreement on August 11, 2011.

Government of Quebec Loan

We have an agreement with the Government of Quebec for a term loan that is non-interest bearing and is payable in 48 equal monthly installments (denominated in Canadian dollars) that commenced on December 1, 2009. The proceeds were used to partially finance capital expenditures at our Rayonese facility located in Quebec, Canada.

Revolving Credit Agreement –United States

At May 1, 2011, we had an unsecured Amended and Restated Credit Agreement that provided for a revolving loan commitment of $6.5 million, including letters of credit up to $3.0 million. This agreement was set to expire August 15, 2012. On August 25, 2011, we entered into a seventeenth amendment to the Amended and Restated Credit Agreement, amending the agreement effective May 1, 2011 (end of our fiscal 2011). This amendment extends the expiration date of the line of credit through August 25, 2013, increasing the revolving loan commitment from $6.5 million to $10.0 million, and decreases the capital expenditure limit for fiscal years 2012 and 2013 from $10.0 million to $6.0 million. On January 17, 2012, and in connection with the Culp Europe Credit Agreement discussed below, we entered into an eighteenth amendment to decrease our revolving loan commitment from $10.0 million to $7.6 million.

The amended agreement provides for a pricing matrix to determine the interest rate payable on loans made under the agreement (applicable interest rate of 2.24% at April 29, 2012). As of April 29, 2012, there were no outstanding letters of credit. As of April 29, 2012 and May 1, 2011, there were no borrowings outstanding under the agreement.
 
Revolving Credit Agreement - China

We have an unsecured credit agreement for our Chinese operations that provides for a line of credit up to 40 million RMB (approximately $6.4 million USD at April 29, 2012). This agreement expires on September 2, 2012 and has an interest rate determined by the Chinese government. There were no borrowings under this agreement as of April 29, 2012 and May 1, 2011.

Revolving Credit Agreement - Europe

On January 17, 2012, we entered into an unsecured credit agreement associated with our operations in Poland that provides for a line of credit up to 6.8 million Polish Zloty (approximately $2.2 million in USD at April 29, 2012). This agreement expires on January 15, 2013 and bears interest at WIBOR (Warsaw Interbank Offered Rate) plus 2% (applicable interest rate of 6.85% interest rate at April 29, 2012). At April 29, 2012, $889,000 (2.8 million Polish Zloty) was outstanding under this agreement.

Overall

Our loan agreements require, among other things, that we maintain compliance with certain financial covenants.  At April 29, 2012, the company was in compliance with these financial covenants.

The principal payment requirements for long-term debt during the next four fiscal years are: 2013 – $2.4 million; 2014 – $2.3 million; 2015 - $2.2 million; and 2016 – $2.2 million.

Interest paid during 2012, 2011, and 2010 totaled $817,000, $901,000, and $1.3 million, respectively.