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Credit Agreement
9 Months Ended
Jun. 30, 2012
Credit Agreement [Abstract]  
Credit Agreement

9. Credit Agreement

On March 2, 2011, the Company entered into a new credit agreement (as amended, the “Credit Agreement”) with a bank. Under the Credit Agreement, the Company can borrow up to $25.0 million principally secured by its accounts receivable, inventories and equipment. In addition, certain domestic subsidiaries of the Company have guaranteed the obligations of the Company under the Credit Agreement and such subsidiaries have secured the obligations by the pledge of certain of the assets of such subsidiaries. The Credit Agreement expires on March 2, 2014. The Credit Agreement limits the incurrence of additional indebtedness, requires the maintenance of certain financial ratios, restricts the Company and its subsidiaries’ ability to pay dividends and contains other covenants customary in agreements of this type. The interest rate for borrowings under the Credit Agreement is a LIBOR based rate with a margin spread of 250 to 350 basis points depending upon the maintenance of certain ratios. At June 30, 2012, the Company was in compliance with all covenants. At June 30, 2012, there were no borrowings outstanding under the Credit Agreement. There were standby letters of credit outstanding in the amount of $0.2 million and additional borrowings available of $24.8 million. On April 24, 2012 the Company amended the Credit Agreement, effective as of March 31, 2012, to remove investments in rental equipment from the calculation of capital expenditures as applied in determining the satisfaction of our cash flow coverage ratio covenant under the Credit Agreement.