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Long-Term Debt
9 Months Ended
Jan. 31, 2014
Long-Term Debt [Abstract]  
Long-Term Debt

7.   Long-Term Debt    

   

In July 2013, we entered into an amendment to our Revolving Credit and Term Loan Agreement with Wells Fargo Capital Finance (“Wells Fargo Credit Agreement”). Under the terms of the amendment, we are entitled to borrow up to $18.2 million. The total amount that can be borrowed under the credit agreement is based on a multiplier factor of the trailing twelve months of maintenance and recurring Software-As-A-Service revenue.  The Wells Fargo Credit Agreement consists of two term notes and a revolving line of credit.  Term Note A is for $12.2 million with quarterly principal payments of $306,000 plus an additional annual payment based on the Company’s free cash flow for the year with any remaining amount due at maturity, June 30, 2015.  To the extent the Company makes annual principal payments based on free cash flow, the quarterly principal payments will be reduced.  The Company incurs interest at the prevailing LIBOR rate plus 4.5-5.0% per annum with a minimum rate of 6.5% (6.5% at January 31, 2014).  Term Note B is for $1.0 million payable in full at maturity, June 30, 2015.  The Company incurs interest at the prevailing LIBOR rate plus 9.0-10.0% per annum with a minimum rate of 12.0% (12.0% at January 31, 2014).  Under the terms of the revolving line of credit, the Company can borrow up to $5.0 million.  The Company incurs interest expense on funds borrowed at the prevailing LIBOR rate plus 4.5-5.0% per annum with a minimum rate of 6.5% (6.5% as of January 31, 2014).  The revolver has a maturity date of June 30, 2015.  As of January 31, 2014, there is $2.5 million outstanding on the revolving line of credit, none of which is current.    

 

Our long-term debt consists of the following at January 31, 2014 and April 30, 2013 (in thousands):    

 

 

 

 

 

 

 

 

 

January 31,

 

 

April 30,

 

 

2014

 

 

2013

Term Note A

$

11,630 

 

$

7,883 

Term Note B

 

1,000 

 

 

4,000 

Revolving line of credit

 

2,500 

 

 

5,500 

Capital leases

 

179 

 

 

306 

 

 

15,309 

 

 

17,689 

Less current portion

 

(1,350)

 

 

(2,519)

Total long term debt, net

$

13,959 

 

$

15,170 

   

 

The Wells Fargo Credit Agreement requires ongoing compliance with certain affirmative and negative covenants. The affirmative covenants include, but are not limited to: (i) maintenance of existence and conduct of business; (ii) compliance with laws; (iii) use of proceeds; and (iv) books and records and inspection. The negative covenants set forth in the Wells Fargo Credit Agreement include, but are not limited to, restrictions on our ability (and on our subsidiaries): (i) with certain limited exceptions, to create, incur, assume or allow to exist indebtedness; (ii) with certain limited exceptions, to create, incur, assume or allow to exist liens on properties; (iii) with certain limited exceptions, to make certain payments, transfers of property, or investments; or (iv) with certain limited exceptions, to make acquisitions.    

  

We are obligated to maintain certain minimum consolidated adjusted EBITDA levels, certain minimum liquidity levels, certain total leverage ratios, and certain fixed charge coverage ratios, all as calculated in accordance with the terms and definitions determining such amounts as contained in the Wells Fargo Credit Agreement. The Wells Fargo Credit Agreement also contains various information and financial reporting requirements.    

  

The Wells Fargo Credit Agreement also contains customary events of default, including without limitation events of default based on payment obligations, repudiation of guaranty obligations, material inaccuracies of representations and warranties, covenant defaults, insolvency proceedings, monetary judgments in excess of certain amounts, change in control, certain ERISA events, and defaults under certain other obligations.    

 

We are in compliance with all such covenants and requirements at January 31, 2014.    

  

A summary of future principal payments on long-term debt obligations as of January 31, 2014 is as follows (in thousands):    

 

 

 

 

Fiscal Year Ending April 30,

 

Amount

Remainder of 2014

$

327 

2015

 

1,350 

2016

 

13,632 

 

$

15,309 

   

The summary of future principal payments on long-term debt obligations does not account for the annual payments based on our free cash flow under Term Note A as noted above. The amount of these payments is not known; however, when they are determined it will accelerate the payment schedule outlined above.