Debt and Lines of Credit

6 Months Ended

Jun. 30, 2012

Debt and Lines of Credit [Abstract]

DEBT AND LINES OF CREDIT

NOTE 9 DEBT AND LINES OF CREDIT

Convertible Notes

In February 2007, the Company issued $175 million in convertible subordinated notes. The notes were subordinated to all of the Company’s existing and future senior indebtedness, matured on February 15, 2012 and bore interest at a rate of 2.5% per year, payable in cash semiannually in arrears on February 15 and August 15 of each year.

At December 31, 2011, the Company had $12.4 million in convertible subordinated notes outstanding with a carrying value of $12.4 million, net of a nominal amount of remaining unamortized debt discount, which was included in short-term borrowings in the accompanying consolidated balance sheets. These notes matured on February 15, 2012 and have been fully repaid.

Lines of Credit and Loans

At June 30, 2012, the Company had (i) four revolving lines of credit with Japanese banks; (ii) two agreements with Japanese banks under which it sells trade notes receivable with recourse; (iii) seven promissory notes with Japanese banks; and (iv) six promissory notes with Israeli banks, as follows:

(i) The four revolving lines of credit with Japanese banks totaled 1.1 billion yen ($13.4 million at June 30, 2012), expire at various dates through November 30, 2012, and bear interest at rates ranging from 1.18% to 2.475%. Certain certificates of deposit held by the lending institution’s U.S. affiliate collateralize a portion of these balances. At June 30, 2012, the Company had $5.6 million outstanding and $7.8 million available for borrowing under these lines of credit. Amounts outstanding are included in short-term borrowings in the accompanying consolidated balance sheets.

(ii) The Company’s two agreements with Japanese banks, under which it sells trade notes receivable with recourse, allow the Company to sell receivables totaling up to 550 million yen ($6.9 million at June 30, 2012), have no expiration dates and bear interest at the prevailing bank rate, which was 1.475% at June 30, 2012. At June 30, 2012, the Company had $0.6 million outstanding and $6.3 million available for the sale of notes receivable under these agreements. Amounts outstanding under these agreements are included in short-term borrowings in the accompanying consolidated balance sheets, as the sale of these receivables has not met the criteria for sale treatment in accordance with ASC 860-30, Transfers and Servicing – Secured Borrowing and Collateral.

(iii) The Company’s seven promissory notes with Japanese banks have an aggregate principal balance of $1.5 million. Such loans bear interest at rates ranging from 1.25% to 1.45% and mature at various dates through November 2016. These loans are generally unsecured.

(iv) The Company’s six promissory notes with Israeli banks have an aggregate principal balance of $4.9 million. Such loans bear interest at rates ranging from 2.97% to 4.50% and mature at various dates through October 2015. These loans are generally secured by pledges of and liens on certain of the Company’s Ophir Division’s assets.

As part of the acquisition of High Q, the Company assumed certain loans and lines of credit, which had an aggregate balance of $4.2 million as of December 31, 2011. Such loans were repaid during the first quarter of 2012.

Secured Credit Facility

In October 2011, the Company entered into a credit agreement with certain lenders (Credit Agreement). The Credit Agreement and related security agreement provide for a senior secured credit facility consisting of a $185 million term loan and a $65 million revolving line of credit, each with a term of five years, which is secured by substantially all of the Company’s domestic assets as well as a pledge of certain shares of its subsidiaries. The initial interest rates per annum applicable to amounts outstanding under the term loan and the revolving line of credit are, at the Company’s option, either (a) the base rate as defined in the Credit Agreement (Base Rate) plus 1.75%, or (b) the Eurodollar Rate as defined in the Credit Agreement (Eurodollar Rate) plus 2.75%. The margins over the Base Rate and Eurodollar Rate applicable to the term loan and loans outstanding under the revolving line of credit are subject to adjustment in future periods based on the Company’s consolidated leverage ratio, as defined in and calculated pursuant to the Credit Agreement; provided, that the maximum applicable margins are 2.00% for Base Rate loans and 3.00% for Eurodollar Rate loans, and the minimum applicable margins are 1.25% for Base Rate loans and 2.25% for Eurodollar Rate loans. Principal amortization and interest payments on the term loan are due quarterly. At June 30, 2012, the Company had a remaining balance of $175.8 million outstanding on the term loan with an effective interest rate of 3.00%. At June 30, 2012, there was no balance outstanding under the revolving line of credit, with $63.6 million available after considering outstanding letters of credit totaling $1.4 million. The Company’s ability to borrow funds under the revolving line of credit is subject to certain conditions, including compliance with certain covenants and making certain representations and warranties.

Japanese Bonds

In June 2011, the Company issued 200 million yen ($2.5 million at June 30, 2012) in private placement bonds through a Japanese bank. These bonds bear interest at a rate of 0.62% per year, payable in cash semiannually in arrears on June 30 and December 31 of each year, and mature on June 30, 2014. The bonds are included in long-term debt in the accompanying consolidated balance sheets.

Total short-term debt was as follows:

(In thousands)	June 30, 2012		December 31, 2011
Short-term lines of credit	$	6,243	$	6,801
Convertible notes due February 2012, interest at 2.5%		—		12,356
Current portion of long-term debt		25,382		25,992
Total short-term borrowings	$	31,625	$	45,149

Total long-term debt was as follows:

(In thousands)	June 30, 2012		December 31, 2011
Japanese private placement bonds due June 2014, interest at 0.62%	$	2,506	$	2,576
Japanese amortizing loans due through November 2016, interest rates from 1.25% to 1.45%		928		954
Austrian amortizing loans due through December 2020, interest rates from 2.23% to 3.25%		—		270
Austrian lines of credit, interest at 2.90%		—		3,888
Israeli loans, due through October 2015, interest rates from 2.97% to 4.50%		2,884		3,855
Term loan due October 2016, interest at 3.00%		152,625		166,500
Total long-term debt	$	158,943	$	178,043

Maturities of the Company’s debt obligations as of June 30, 2012 were as follows:

(In thousands)
2012 (remaining)	$	16,696
2013		29,744
2014		32,204
2015		28,552
2016		83,372
Thereafter		—
	$	190,568