Note 6 - Debt

12 Months Ended

Oct. 31, 2012

Debt Disclosure [Text Block]

6. DEBT

Debt consisted of the following:

	October 31,
	2012		2011
	(In thousands)
Revolver	$	-	$	37,446
Other long term debt		1,303		1,819
Total debt		1,303		39,265
Less: current portion		-		(508	)
Total long-term debt	$	1,303	$	38,757

$200.0 million senior secured revolving credit facility. On October 29, 2010, we entered into a senior secured credit agreement (the “Senior Secured Revolving Credit Facility”) with Wells Fargo Securities, LLC and Banc of America Securities LLC, as joint lead arrangers and joint lead bookrunners, Bank of America, N.A. as syndication agent and Union Bank, N.A. as documentation agent. The Senior Secured Revolving Credit Facility provides for senior secured credit facilities in an aggregate principal amount of $200.0 million consisting of a 5-year revolving credit facility (the “Revolver”) in an aggregate principal amount of $200.0 million with a sub-facility for letters of credit of $25.0 million, a sub-facility for multicurrency borrowings in Euros, Australian dollars and Canadian dollars of $25.0 million, and a sub-facility for swing line loans of $20.0 million, each on customary terms and conditions. The Senior Secured Revolving Credit Facility includes an option to increase the Revolver to $300.0 million, which would require syndication approval.

Loans under the Revolver (other than Swing Line Loans, as defined) bear interest based on the Base Rate, as defined, or LIBOR, as elected by us. Base Rate interest is calculated at the Base Rate plus the applicable margin and the Base Rate is the highest of:

·   the Federal Funds Rate plus .50%;

·   the prime commercial lending rate of the Administrative Agent, as defined; and

·   the one month LIBOR rate for such day plus 2.00%.

Swing Line Loans bear interest at the Base Rate plus the applicable margin. Borrowings under the Revolver may be used for working capital, capital expenditures and general corporate purposes (including share repurchases).

As of October 31, 2012, there was no amount drawn under the Revolver and after considering restrictive financial covenants under the Senior Secured Revolving Credit Facility, we had approximately $200 million of available remaining credit under the Revolver. The Revolver matures on, and no further borrowings may be made after October 29, 2015.

On May 31, 2012, the Senior Secured Revolving Credit Facility was amended to clarify and define certain restrictive covenants.

Covenants. Our Senior Secured Revolving Credit Facility contains three financial maintenance covenants requiring us to maintain a Total Leverage Ratio, as defined therein, of not more than 3.75 to 1.0, a Senior Leverage Ratio, as defined therein, of not more than 3.0 to 1.0 until October 31, 2013 and not more than 2.75 to 1.00 after October 31, 2013 and Interest Expense Coverage Ratio, as defined therein, in excess of 3.0 to 1.0 at the end of any fiscal quarter. As of October 31, 2012, our Total Leverage Ratio, Senior Leverage Ratio and Interest Expense Coverage Ratio were 0.01 to 1.0, 0.0 to 1.0 and 83 to 1.0, respectively

The Senior Secured Revolving Credit Facility also contains customary affirmative and negative covenants for transactions of this nature, including but not limited to restrictions and limitations on the following:

·   Incurrence of indebtedness;

·   Granting of incurrence of liens;

·   Asset dispositions

·   Mergers, acquisitions;

·   Investments;

·   Distributions, redemptions;

·   Change in business;

·   Payments of indebtedness;

·   Adopt or institute pension plan;

·   Transactions with affiliates;

·   Accounting changes;

·   Rate contracts;

·   Amendment of material documents;

·   Restrictive agreements;

·   Joint ventures;

·   Investments by the loan parties in each other;

·   Deposit accounts; and

·   Capital expenditures.

Guarantors and collateral. The Revolver obligations under our Senior Secured Revolving Credit Facility are guaranteed by each existing and future wholly-owned domestic subsidiary of ours that is not an immaterial subsidiary and are secured by a first priority lien on substantially all of our and our guarantors’ assets.  If loans are ever made pursuant to our Incremental Facility, such loans would share such collateral equally and ratably with our Revolver.

Debt issuance costs. Total debt issuance costs incurred with the issuance of long-term debt are capitalized and amortized as interest expense using the straight-line method which approximates the effective interest method. Amortization of debt issuance costs were $0.5 million, $0.5 million and $1.0 million in fiscal 2012, 2011 and 2010, respectively. The unamortized debt issuance costs were $1.4 million and $1.9 million as of October 31, 2012 and 2011, respectively. The unamortized portion of the debt issuance costs are expected to be recognized over a period of 3.0 years. 

Maturities of Debt

Maturities of our debt for the five fiscal years ending subsequent to October 31, 2012 are as follows:

October 31,	(In thousands)
2013	$	-
2014		-
2015		-
2016		241
2017		271
Thereafter		791
	$	1,303