Debt and Other Financing Arrangements

9 Months Ended

Sep. 30, 2015

8.	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 and September 15, 2015, 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, new and used equipment purchases. The 2014 amendment allowed up to $7.5 million of borrowing through March 2015. To allow for borrowing after the initial period, the arrangement was amended in September 2015 for an additional $1.8 million. Each such purchase financed under the Equipment Loan Arrangement was 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 September 30, 2015.

Under the Equipment Loan Arrangement, the Company executed notes on March 24, 2014, May 22, 2014, June 13, 2014, August 8, 2014 and September 15, 2015 in the amounts of $1.1 million, $1.9 million, $3.0 million, $1.0 million and $1.1 million, respectively, for total borrowings of $8.1 million. The interest rate for these notes for the quarter ended September 30, 2015 was 2.19%, and represented $31,411 of interest expense as compared to a rate of 2.15% and interest expense of $33,941 for 2014. For the nine months ended September 30, 2015 the interest rate was 2.18% and represented $95,216 of interest expense as compared to a rate of 2.15% and interest expense of $46,958 for 2014. As of September 30, 2015, the interest rate was 2.20% and there was $6.3 million of outstanding debt related to these notes. As of September 30, 2015, the Company had $0.7 million of debt financing available under this loan agreement.

The annual principal repayment requirements for debt obligations as of September 30, 2015 were as follows (in 000’s):

2015	$	405
2016		1,620
2017		1,620
2018		1,620
2019		868
2020		164
Total long-term debt		6,297
Less current portion of long-term debt		(1,620)
Total long-term debt, net of current portion	$	4,677