Debt

6 Months Ended

Jun. 30, 2012

Debt [Abstract]

DEBT

6. DEBT

Long-term debt consists of the following (in thousands):

	June 30, 2012			December 31, 2011
Convertible notes	$	91,875		$	91,875
Less unamortized debt discount		—			(5,450	)
		91,875			86,425
Less current portion		(91,875	)		(86,425	)
Total long-term debt	$	—		$	—

The Company’s outstanding debt consists of a revolving credit facility and convertible notes.

Revolving Credit Facility. On January 6, 2012, the Company entered into an Amended and Restated Credit Agreement (the “Revolving Credit Facility”) with BB&T, Wells Fargo Capital Finance, LLC and BB&T Capital Markets (the “Lenders”). Under the Amended Credit Agreement, the Lenders agreed to provide the Company with one or more revolving loans in a collective maximum principal amount of $100,000,000. The Revolving Credit Facility replaces the previous revolving credit facility in its entirety. Amounts drawn under the Revolving Credit Facility are subject to a borrowing base consisting of certain accounts receivables, inventories, machinery and equipment and real estate.

At June 30, 2012, the Company had $25.0 million of outstanding borrowings under its revolving credit facility and additional available borrowing capacity of approximately $55.8 million.

Convertible Notes Offering. The Company’s convertible notes mature on July 2, 2012.

On July 2, 2012 the Company repaid the $91.9 million principal balance on the notes and, in accordance with the conversion feature of the notes, issued 1,061,745 shares of common stock to the note-holders.

The following table provides additional information regarding the Company’s convertible notes (in thousands, except conversion price):

	June 30, 2012			December 31, 2011
Principal amount of the liability component	$	91,875		$	91,875
Unamortized discount of liability component		—			(5,450	)
Net carrying amount of liability component		91,875			86,425
Carrying amount of the equity component		23,360			23,360
Remaining amortization period of discount		0 months			6 months
Conversion price	$	21.78		$	21.78
Effective interest rate on liability component		18.41	%		18.41	%
If-converted value in excess of principal amount (a)	$	34,681		$	3,454
If-converted number of shares to be issued (a)		1,156			153

(a) If-converted value amounts are for disclosure purposes only. The if-converted value in excess of the principal amount and the if-converted number of shares to be issued illustrated above are based on the average stock price of $30.00 during the three months ended June 30, 2012, which exceeded the conversion price of $21.78. The actual number of shares issued upon conversion was determined by the Company’s stock price during the 40 trading-day observation period defined by the debt agreement.

Interest expense relating to the Company’s convertible notes for the three and six months ended June 30, 2012 and 2011 is as follows (in thousands):

	Three Months Ended June  30,				Six Months Ended June  30,
	2012		2011		2012		2011
Interest expense at coupon rate (6.0%)	$	1,378	$	1,462	$	2,756	$	2,925
Non-cash interest in accordance with ASC 470		2,725		2,322		5,450		4,645
Total interest expense recognized on convertible debt instruments	$	4,103	$	3,784	$	8,206	$	7,570

Compliance with Debt Covenants and Restrictions. The Company’s ability to make scheduled principal and interest payments and to borrow and repay amounts under any outstanding revolving credit facility, and continue to comply with any loan covenants depends primarily on the Company’s ability to generate substantial cash flow from operations.

As of June 30, 2012, the Company was in compliance with all of the covenants contained in its debt agreements. Failure to comply with the loan covenants might cause lenders to accelerate the repayment obligations under the credit facility, which may be declared payable immediately based on a default and which could result in a cross-default under the convertible notes.