Long-Term Debt

12 Months Ended

Dec. 31, 2012

Long-term Debt [Abstract]

LONG-TERM DEBT

(7) LONG-TERM DEBT

The components of long-term debt as of December 31 are as follows:

	2012		2011
	(in thousands)
Senior Notes dated September 23, 2010, interest only payable semi-annually at 8.625%, maturing October 15, 2018	$	300,000	$	300,000
Revolving Credit Facility due September 1, 2014 with a group of commercial banks, interest payable at variable rates		86,755		46,047
Total long-term debt	$	386,755	$	346,047

Annual maturities of long-term debt for each of the five years following December 31, 2012 and in total thereafter follow (in thousands):

2013	$	—
2014		86,755
2015		—
2016		—
2017		—
Thereafter		300,000
Total	$	386,755

Senior Notes – The 8.625% Senior Notes (“Notes”) are unconditionally guaranteed on a senior basis by our domestic subsidiaries and are general, unsecured obligations of ours and the subsidiary guarantors. We have the option to redeem some or all of the Notes at any time on or after October 15, 2014 at specified redemption prices, and prior to that time pursuant to certain make-whole provisions. The Notes contain restrictive covenants, including limitations on incurring indebtedness, creating liens, selling assets, and entering into certain transactions with affiliates. The covenants limit our ability to pay cash dividends on common stock, repurchase or redeem common or preferred equity, prepay subordinated debt, and make certain investments. There are no restrictions on dividends from a subsidiary to the parent company, nor any restrictions on dividends from the parent company to a subsidiary. Upon the occurrence of a “Change in Control” (as defined in the indenture governing the notes), each holder of the Notes will have the right to require us to purchase that holder’s Notes for a cash price equal to 101% of their principal amount. Upon the occurrence of an “Event of Default” (as defined in the indenture), the trustee or the holders of the Notes may declare all of the outstanding Notes to be due and payable immediately. The Company is not aware of any instances of non-compliance with the financial covenants.

The Notes bear interest at a fixed rate and therefore changes in market interest rates do not affect our interest payment obligations on the notes. The fair market value of our Senior Notes varies as changes occur to general market interest rates, the remaining maturity of the notes, and our credit worthiness. At December 31, 2012, the fair market value of the Notes was $320.3 million, and the carrying value was $300.0 million. At December 31, 2011, the fair market value of the Notes was $293.3 million.

Mr. Al A. Gonsoulin, our Chairman and CEO and the Matzke Family Trust, of which Richard Matzke, one of our directors, is trustee, have purchased $2 million and $1 million of the 8.625% Senior Notes, respectively.

Revolving Credit Facility – Our senior secured revolving credit facility permits borrowings up to $125 million, contains a borrowing base of 80% of eligible receivables and 50% of the value of parts, and is due September 1, 2014. On January 13, 2013, we amended the facility to increase our borrowing capacity from $100 million to $125 million. The interest rate is the prime rate plus 100 basis points or LIBOR plus 300 basis points, at our option. During 2012 and 2011, the weighted average effective interest rate on amounts borrowed under the facility was 4.25%. We may prepay the revolving credit facility at any time in whole or in part without premium or penalty. All obligations under the revolving credit facility are secured by a perfected first priority security interest in all of our eligible receivables and inventory, and are guaranteed by certain of our domestic subsidiaries.

The revolving credit facility includes financial covenants related to working capital, funded debt to consolidated net worth consolidated net worth, and fixed charges coverage and other covenants including restrictions on additional debt, liens and a change of control. Events of default include a change of control, a default in any other material credit agreement, including the 8.625% Senior Notes, and customary events of default. The Company is not aware of any instances of non-compliance with the financial covenants.

Other – We maintain a separate letter of credit facility that had $14.7 million and $6.6 million in letters of credit outstanding at December 31, 2012 and 2011, respectively