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Debt
 12 Months Ended
Dec. 31, 2011
Debt [Abstract]  
Debt
(6) Debt

In September 2010, the Company amended its debt agreement with its primary lender (the Amendment) to provide for an increase in the line of credit from $4.0 million to $6.0 million and a decrease in the term debt to $6.0 million. Interest on the line of credit and term debt was payable monthly at LIBOR plus an Applicable Margin, as defined in the Amendment (4.76% at December 31, 2010). The quarterly payments under the term debt were reduced to $666,667, plus interest, beginning December 31, 2010. The Company reduced its commitment fee from three-quarters of one percent (0.75%) to one-half of one percent (0.50%) per annum on the unused line of credit. The borrowings were collateralized by a first priority lien on all of the Company’s assets. Concurrent with the amendment of the Agreement, the Company elected to prepay approximately $5.9 million of its term debt, incurring a prepayment penalty of approximately $0.2 million. The prepayment penalty is included as a component of interest expense in the consolidated statement of income for the year ended December 31, 2010.

The Amendment contained restrictive covenants which the Company was in compliance with during 2010.

In July 2011, the outstanding term debt balance of $4.0 million was paid in full. The Company did not incur any prepayment penalties or other fees associated with the payoff. In connection with the repayment, approximately $0.1 million of unamortized debt issue costs associated with the term debt was written off. These costs are included in interest expense in the consolidated statement of income for the year ended December 31, 2011.

In August 2011, the Company entered into a Fifth Amended and Restated Loan Agreement with its primary lender (the Agreement) to provide for an increase in the line of credit to $10 million. The credit facility may be increased up to $20 million upon the satisfaction of certain conditions. The interest rate is the BBA LIBOR Daily Floating Rate plus an Applicable Margin, as those terms are defined in the Agreement (2.29% at December 31, 2011). In addition, a commitment fee of 0.25% per annum is charged on the unused line of credit. The credit facility was extended to expire on December 31, 2014, at which time all principal amounts are due and payable. Interest is payable quarterly. Borrowings are collateralized by substantially all of the Company’s assets.

 

Under the Agreement, the Company is subject to certain financial covenants including, but not limited to, maintaining a Leverage Ratio and Interest Coverage Ratio, as those terms are defined in the Agreement, that are determined on a quarterly basis, and other restrictive covenants. The Company was in compliance with all covenants at December 31, 2011.

Furthermore, the lender may terminate the Agreement and require the Company to repay all outstanding amounts under certain conditions, as described in the Agreement, including, but not limited to: (1) cross-default on any other credit agreement with an outstanding principal amount in excess of $500,000, (2) material adverse change in our business condition, operations or properties, (3) violation of any covenant or (4) a change in control of the Company.