Long - Term Debt

6 Months Ended

Jun. 30, 2012

LONG-TERM DEBT

Long-term debt consists of the following:



	June 30, 2012		December 31, 2011
Asset-based loan	$	77,000	$	77,000
Less: current maturities	—		—
Long-term debt	$	77,000	$	77,000

On April 27, 2011, we refinanced our revolving credit facility with a group of financial institutions. The amended and restated facility is a five-year asset based loan (the “ABL”) with commitments to lend up to $250,000. The ABL provides for the issuance of letters of credit and cash borrowings, is secured by our accounts receivable, inventory and cash, and is guaranteed by all of our domestic subsidiaries. The issuance of letters of credit and cash borrowings are limited by the level of a borrowing base consisting of eligible accounts receivable and inventory.

The amount of the borrowing base above the current level of letters of credit and cash borrowings outstanding represents the total borrowing availability. Certain covenants and restrictions, including cash dominion, weekly borrowing base reporting, and a fixed charge coverage ratio, would become effective if total availability fell below various thresholds. If total availability falls below $42,000 we would be subject to cash dominion and weekly borrowing base reporting. If total availability falls below $35,000 we would also be subject to the fixed charge coverage ratio, which we currently do not meet.

The borrowing base is reported on the 25th day of each month based on our financial position at the end of the previous month. As of June 30, 2012, based on our May 26, 2012 financial position, we had $22,742 of availability to borrow under our ABL before we would have become subject to the cash dominion and weekly reporting covenants of the agreement. If we chose to be subject to the cash dominion and weekly reporting covenants, we would have also had availability to borrow an additional $7,000 under our ABL at June 30, 2012, for total availability to borrow of $29,742. We could have also borrowed an additional $35,000 under our ABL if we had met the fixed charge coverage ratio at June 30, 2012, which we did not.

We intend to continue to manage our availability to remain above the $42,000 threshold, as we choose not to be subject to the cash dominion and weekly reporting covenants. Our borrowing base calculations are subject to periodic examinations by the financial institutions which can result in adjustments to the borrowing base and our availability under the ABL.

The interest rate on cash borrowings outstanding under the ABL is either (i) a base rate (the greatest of the prime rate, the Federal Funds Effective Rate plus 0.5%, and the adjusted LIBOR plus 1%) plus a margin ranging from 1.00% to 1.75% or (ii) LIBOR plus a margin ranging from 2.25% to 3.00%. These margins fluctuate with average availability. As of June 30, 2012, loans outstanding were $77,000 with a weighted average interest rate of 3.19%.

Under the terms of the ABL, we are required to comply with certain operating covenants, the most significant of which have been described above. We are currently in compliance with all of these applicable covenants.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

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