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FINANCING AGREEMENTS | 12 Months Ended
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Dec. 31, 2012
FINANCING AGREEMENTS |
FINANCING AGREEMENTS | NOTE 3 FINANCING AGREEMENTS On May 2, 2012 we entered into the fourth amendment to the third amended and restated credit agreement with Wells Fargo Bank (WFB). The credit agreement with WFB provides for a line of credit arrangement of $13.5 million, which expires if not renewed, on May 31, 2015. The credit arrangement also provides a $1.8 million real estate term note with a maturity date of March 31, 2027 which replaced the $0.9 million real estate term note that was to expire on May 31, 2012, and a new term loan of up to $2.0 million for capital expenditures to be made prior to December 31, 2013 with a maturity date of December 31, 2017. At December 31, 2012 we've used $0.9 million of the $2.0 million capital term loan. On December 31, 2012 in connection with our purchase of the Mankato building from Winland we again amended our credit agreement with WFB to include an additional $1.7 million real estate term note that expires if not renewed on May 31, 2015. The purchase of the building was funded through our line of credit which was paid down when the new real estate term note was funded on January 9, 2013. Under the agreement, both the line of credit and real estate term note are subject to variations in the LIBOR rate. Our line of credit bears interest at three-month LIBOR + 2.75% (3.00% at December 31, 2012) while our real estate term note bears interest at three-month LIBOR + 3.25% (3.5% at December 31, 2012). The weighted-average interest rate on our line of credit and real estate term note were 3.71% and 4.00%, respectively for the year ended December 31, 2012. We had borrowings on our line of credit of $7,923,487 and $9,345,044 outstanding as of December 31, 2012 and 2011, respectively The credit agreement contains certain covenants which, among other things, require us to adhere to regular reporting requirements, abide by annual shareholder dividend limitations, maintain certain financial performance, and limit the amount of annual capital expenditures. The availability under the line is subject to borrowing base requirements, and advances are at the discretion of the lender. At December 31, 2012, we have net unused availability under our line of credit of approximately $2.9 million. The line is secured by substantially all of our assets. A summary of long-term debt balances at December 31, 2012 and 2011 is as follows:
Description |  | 2012 |  | 2011 |
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Term notes payable—Wells Fargo Bank, N.A. |  |  |  |  |  |  |
Real estate term note, maturing March 31, 2027, with monthly payments of approximately $10,000 plus interest, secured by substantially all assets |  | $ | 1,707,894 |  | $ | 1,009,050 |
Equipment notes bearing interest at three month LIBOR + 4.5% (approx. 5.4%) and three month LIBOR + 3.25% (approx 4.1%), maturing May 2015 and December 2017, respectively with combined monthly payments of approximately $21,000 plus interest; secured by substantially all assets |  |  | 1,091,110 |  |  | 514,077 |
Industrial revenue bond payable to the City of Blue Earth, Minnesota which bears a variable interest rate (approx. 0.3% at December 31, 2012), and has a maturity date of June 1, 2021, with principal of $80,000 payable annually on June 1 |  |  | 520,000 |  |  | 600,000 |
Total long-term debt |  |  | 3,319,004 |  |  | 2,123,127 |
Current maturities of long-term debt |  |  | (453,105 | ) |  | (1,310,210 | )
Long-term debt—net of current maturities |  | $ | 2,865,899 |  | $ | 812,917 |
Future maturity requirements for long-term debt outstanding as of December 31, 2012, are as follows:
Years Ending December 31, |  | Amount |
--- | --- | --- | ---
2013 |  | $ | 453,105 |
2014 |  |  | 453,105 |
2015 |  |  | 461,022 |
2016 |  |  | 358,105 |
2017 |  |  | 358,105 |
Future |  |  | 1,235,562 |
|  | $ | 3,319,004 |
The subsequent financing of the new real estate term note will increase the future maturity amounts above by approximately $112,000 in both 2013 and 2014 and $1,450,000 in 2015.

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- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02.19,20,22) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21475-112644 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 02 -Paragraph 19, 20, 22 -Article 5 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 129 -Paragraph 2, 4 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. + Details
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