Debt and Other Financing Arrangements

3 Months Ended

Mar. 31, 2015

Debt and Other Financing Arrangements

On March 20, 2014, the Company entered into an equipment financing arrangement with Banc of America Leasing & Capital, LLC (the “Lender”), which it amended on August 8, 2014, including a Master Loan and Security Agreement and related documentation (collectively the “Equipment Loan Arrangement”) which provided the Company with the ability to finance, at its option, up to $7.5 million of new and used equipment purchases. Each such purchase financed under the Equipment Loan Arrangement is documented by the execution of an equipment note. Each note has a maturity date of 60 months from the applicable loan date, and bears interest at the then current 30-day LIBOR rate + 2.00%. Principal and interest are payable over the 60-month repayment period and principal is repayable without premium or penalty. Borrowings under the Equipment Loan Arrangement are secured by a first priority security interest in the equipment acquired with the proceeds of the equipment notes. Under the Equipment Loan Arrangement, the Company is subject to a maximum quarterly funded debt to EBITDA ratio and a minimum fixed charge coverage ratio. The Company was in compliance with all loan covenants as of March 31, 2015.

Under the Equipment Loan Arrangement, the Company executed notes on March 24, 2014, May 22, 2014, June 13, 2014 and August 8, 2014 in the amounts of $1.1 million, $1.9 million, $3.0 million and $1.0 million, respectively, for total borrowings of $7.0 million. The interest rate for these notes for the quarter ended March 31, 2015 was 2.17%, and represented $33,327 of interest expense. As of March 31, 2015, the interest rate was 2.17%. As of March 31, 2015, the Company had $5.9 million of outstanding debt related to these notes.

The annual repayment requirements for debt obligations as of March 31, 2015 were as follows (in 000’s):

2015	$	1,050
2016		1,400
2017		1,400
2018		1,400
2019		648
Total long-term debt		5,898
Less current portion of long-term debt		(1,400)
Total long-term debt, net of current portion	$	4,498

- 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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