Long-Term Debt

12 Months Ended

Dec. 31, 2012

Long-Term Debt [Abstract]

LONG-TERM DEBT

4.    LONG-TERM DEBT

Debt consisted of the following (in millions):

	December 31,
	2012		2011
Revolving credit facility	$	59.1	$	52.1
Other obligations		0.7		0.5
Total debt		59.8		52.6
Less current portion		0.6		0.4
Long-term debt	$	59.2	$	52.2

Credit Facility—The Company has a $120.0 million asset based senior secured revolving credit facility (“credit facility”). In December 2012, the Company amended and extended its credit facility to, among other things, incorporate certain real estate acquired in 2011, amend the cash dominion threshold, modify certain advance rates, and reduce the top tier interest rate. Borrowing availability under the credit facility is based on eligible accounts receivable, inventory and real estate. The real estate component of the borrowing base amortizes monthly over 12.5 years on a straight-line basis. Borrowings under the credit facility are collateralized by substantially all of the Company’s assets and are subject to certain operating limitations applicable to a loan of this type, which, among other things, place limitations on indebtedness, liens, investments, mergers and acquisitions, dispositions of assets, cash dividends and transactions with affiliates. The entire unpaid balance under the credit facility is due and payable on December 21, 2017, the maturity date of the credit agreement.

At December 31, 2012, under the credit facility, the Company had revolving credit borrowings of $59.1 million outstanding at a weighted average interest rate of 2.87%, letters of credit outstanding totaling $4.3 million, primarily for health and workers’ compensation insurance, and $24.3 million of additional committed borrowing capacity. The Company pays an unused commitment fee in the range of 0.30% to 0.375% per annum. In addition, the Company had $0.7 million of capital lease and other obligations outstanding at December 31, 2012.

The sole financial covenant in the credit facility is the fixed charge coverage ratio (“FCCR”) that must be tested by the Company if the excess borrowing availability falls below a range of $10.0 million to $15.0 million depending on the Company’s borrowing base and must also be tested on a pro forma basis prior to consummation of certain significant business transactions outside the Company’s ordinary course of business, as defined in the agreement. The FCCR is 1.25:1.00. At December 31, 2012, the FCCR testing threshold was $10.4 million and the Company had $24.3 million of excess borrowing availability.

The Company believes that cash generated from its operations, funds available under the credit facility will provide sufficient funds to meet the operating needs of the business for at least the next twelve months. In 2012 and 2011, the minimum FCCR was not required to be tested as excess borrowing availability was greater than the minimum threshold. However, if availability would have fallen below that threshold, the Company would not have met the minimum FCCR. If the Company was unable to maintain excess borrowing availability of more than the applicable amount in the range of $10.0 million to $15.0 million and was also unable to comply with this financial covenant, its lenders would have the right, but not the obligation, to terminate the loan commitments and accelerate the repayment of the entire amount outstanding under the credit facility. The lenders could also foreclose on the Company’s assets that secure the credit facility. In that event, the Company would be forced to seek alternative sources of financing, which may not be available on terms acceptable to it, or at all.

Maturities—At December 31, 2012, the aggregate scheduled maturities of debt are as follows (in millions):

2013	$	0.6
2014		—
2015		0.1
2016		—
2017		59.1
Thereafter		—
Total	$	59.8

The fair value of long-term debt, as calculated using the aggregate cash flows from principal and interest payments over the life of the debt, was approximately $59.1 million and $51.6 million at December 31, 2012 and 2011, respectively, based upon a discounted cash flow analysis using current market interest rates. The fair value measurement inputs for long-term debt are classified as Level 3 (unobservable inputs) in the valuation hierarchy as defined by ASC 820, “Fair Value Measurements and Disclosures”.