Note 7 - Debt

12 Months Ended

Jun. 30, 2013

Debt Disclosure [Abstract]

Debt Disclosure [Text Block]

7. Debt

Long-term debt is comprised of the following at June 30 (in thousands):

	2013		2012
Bank credit agreements	$	50,072	$	50,000
Other		-		-
Total		50,072		50,000
Less current portion		-		-
Total long-term debt	$	50,072	$	50,000

Long-term debt is due as follows (in thousands):

2014		-
2015		-
2016		-
2017	$	50,072
2018
Thereafter		-

Bank Credit Agreements

On January 5, 2012, the Company entered into a five-year $225 million unsecured Revolving Credit Facility (“Credit Agreement”), which includes a letter of credit sub-facility with a limit of $30 million and a $100 million accordion feature. The new credit facility replaced the company’s existing $150 million five-year credit agreement that was scheduled to expire in September 2012. Interest is payable on borrowings at either a LIBOR or base rate benchmark rate plus an applicable margin, which will fluctuate based on financial performance. The Credit Agreement requires a ratio of funded debt to EBITDA (as defined in the Credit Agreement) of no greater than 3.5:1, an interest coverage ratio of no less than 3:1, as well as customary affirmative and negative covenants and events of default. The Credit Agreement also includes certain requirements related to acquisitions and dispositions. Borrowings under the Credit Agreement are guaranteed by the Company’s domestic subsidiaries and are unsecured. The Company intends to use this Credit Agreement to fund potential acquisitions, to support organic growth initiatives, working capital needs, and for general corporate purposes.

As of June 30, 2013, the Company had the ability to borrow $164.2 million under this facility. The carrying value of the current borrowings under the facility approximated fair value.

The facility expires in January 2017 and contains customary representations, warranties and restrictive covenants, as well as specific financial covenants. The terms of the Credit Agreement limited the ability of the Company to pay dividends to shareholders unless the Company is in compliance with the specific financial covenants under the facility. The Company’s current financial covenants under the facility are as follows:

Interest Coverage Ratio - The Company is required to maintain a ratio of Earnings Before Interest and Taxes, as Adjusted (“Adjusted EBIT per the Credit Agreement”), to interest expense for the trailing twelve months of at least 3:1. Adjusted EBIT per the Credit Agreement specifically excludes extraordinary and certain other defined items such as non-cash restructuring and acquisition-related charges up to $2.0 million, and goodwill impairment. At June 30, 2013, the Company’s Interest Coverage Ratio was 27.48:1.

Leverage Ratio - The Company’s ratio of funded debt to trailing twelve month Adjusted EBITDA per the credit agreement, calculated as Adjusted EBIT per the Credit Agreement plus Depreciation and Amortization, may not exceed 3.5:1. At June 30, 2013, the Company’s Leverage Ratio was 0.73:1.

Other Long-Term Borrowings

The Company was a borrower under industrial revenue bonds totaling $3.3 million at June 30, 2011. Because these bonds were remarketed on a monthly basis and a failed remarketing would trigger repayment of the bonds via a renewable letter of credit arrangement, they were classified as a current liability. The Company repaid the bonds without penalty during 2012.

At June 30, 2013, and 2012, the Company had standby letters of credit outstanding, primarily for insurance purposes, of $10.7 million and $9.5 million, respectively.