6. Long-term Debt and Financing Arrangements

On June 16, 2011, the Company entered into a $35.0 million senior secured revolving Domestic Credit Facility (“Domestic Credit Facility”) with a financial institution, which replaced the Company’s prior $35.0 million Domestic Credit Facility that was terminated by the Company. The Domestic Credit Facility is secured by substantially all of the assets of the Company. The maturity date for the Domestic Credit Facility is June 15, 2016. The Company had no borrowings outstanding under the Domestic Credit Facility at December 31, 2011, or under the previous credit facility at December 31, 2010. The Company had no borrowings during 2011. At December 31, 2011, the Company has availability of $32.6 million under its Domestic Credit Facility, net of standby letters of credit outstanding of $2.4 million.

The loan agreement governing the Domestic Credit Facility contains a number of affirmative and negative covenants, including financial covenants. The Company is required to meet a minimum fixed charge coverage ratio. The fixed charge coverage ratio requires that, at the end of each fiscal quarter, the ratio of consolidated EBITDA, as defined in the loan agreement, to fixed charges may not be less than 1 to 1 for the immediately preceding 12 month period. In addition, the Company must maintain a Consolidated Leverage Ratio, as defined, as of the end of each fiscal quarter of no greater than 2.5 to 1.0. The Company must also meet a minimum consolidated EBITDA of $15.0 million through September 30, 2014 and $25.0 million thereafter. The Company was in compliance with all covenants at December 31, 2011.

Interest is charged on borrowings at the Company’s option of either: (i) Base Rate plus the Applicable Rate, or (ii) the Eurodollar Rate plus the Applicable Rate. The Base Rate is a fluctuating rate equal to the highest of (a) the federal funds rate plus .50%, (b) the prime rate as set by the financial institution, and (c) the Eurodollar Rate plus 1.0%. The Eurodollar Rate is a fluctuating LIBOR rate as set by the British Bankers Association, or if such rate is not available, the rate that would be offered by the financial institution’s London Branch to major banks in the London interbank Eurodollar market for deposits in the relevant currency. The Applicable Rate is determined based on the Company’s Consolidated Leverage Ratio, as defined. The Applicable Rate added to the Base Rate ranges from 75 basis points to 175 basis points, and the Applicable Rate added to the Eurodollar ranges from 175 basis points to 275 basis points. A loan that has an interest rate based on the Eurodollar Rate that is lent from the financial institution’s office in the United Kingdom or certain European Union countries is subject to an additional variable interest rate. The Company pays a quarterly fee equal to the Applicable Rate multiplied by the actual daily unused portion of the credit facility.

On September 30, 2011, the Company, through a foreign subsidiary, entered into a new €8.0 million foreign credit facility (“Foreign Credit Facility”), with €6.0 million available for borrowings and €2.0 million available to fund letters of credit. This Foreign Credit Facility replaced the prior foreign credit facility that expired on September 30, 2011. The Foreign Credit Facility, which has a maturity date of September 30, 2014, was completed with the same group of banking institutions and under similar terms and conditions to those in place under the prior credit facility. At December 31, 2011, the Company’s foreign subsidiaries’ various credit arrangements with banks totaled €9.0 million (approximately $11.7 million) with €8.9 million (approximately $11.5 million) available for borrowings, primarily restricted to borrowings by the respective foreign subsidiary. Other than the standby letters of credit outstanding, the Company’s foreign subsidiaries had no borrowings outstanding on any of its credit arrangements at December 31, 2011 or December 31, 2010.

The Company has a capital lease agreement for a high speed manufacturing line at its German operation, included in the Thermal/Acoustical segment. The lease has monthly principal and interest payments through the first quarter of 2012. The lease also contains a purchase option, which provides the Company with the option to purchase the equipment any time after the fourth year of the lease term for a stated percentage of the original purchase price. In addition, the Company has a capital lease agreement for the land and building at the St. Nazaire, France operating facility, included in the Thermal/Acoustical segment, requiring monthly principal and interest payments through 2016. The capital lease provides an option for the Company to purchase the land and building at the end of the lease for a nominal amount.

Total outstanding debt consists of:

	Effective					December 31,
In thousands	Rate			Maturity		2011			2010
Volksbank Meinerzhagen eG		5.95	%		2013	$	314		$	568
Capital Lease, manufacturing equipment, Meinerzhagen, Germany		4.25	%		2012		158			798
Capital Lease, land and building, St. Nazaire, France		5.44	%		2016		2,824			3,522
							3,296			4,888
Less portion due within one year							(1,035	)		(1,496	)
Total long-term debt						$	2,261		$	3,392

As of December 31, 2011, total debt maturing in 2012, 2013, 2014, 2015 and 2016 was $1.0 million, $0.7 million, $0.6 million, $0.6 million and $0.4 million, respectively. There was no debt outstanding that matures after 2016.

The weighted average interest rate on long-term debt was 5.4% for the year ended December 31, 2011, compared with 5.3% for 2010 and 5.0% for 2009.

The fair values of the Company’s long-term debt are determined using discounted cash flows based upon the Company’s estimated current interest cost for similar type borrowings or current market value. The carrying values of the long-term debt approximate fair market value.