Note 9 - Debt

9 Months Ended

Mar. 31, 2012

Debt Disclosure [Text Block]

Note 9:                      Debt

Debt, including capitalized lease obligations, is comprised of the following (in thousands):

	March 31, 2012		June 30, 2011
Notes payable and current maturities
Line of Credit	$	-	$	8,000
Current portion of Term Note		1,275		-
Short-term foreign credit facility		714		27
Capitalized leases		401		211
	$	2,390	$	8,238
Long-term debt
Line of credit		15,100		-
Term Note		13,811		-
Capitalized leases		542		721
		29,453		721
	$	31,843	$	8,959

The material financial covenants of the Loan and Security Agreement (Line of Credit) are 1)  maintain a minimum Tangible Net Worth of $120 million excluding any pension liability, 2) purchase no more than $15.0 million in capital expenditures on a fiscal year basis,  3) maintain a Debt Service Coverage Ratio of a minimum of 1.25 to 1 and 4) maintain consolidated cash plus liquid investments of not less than $10.0 million at any time.  As of March 31, 2012, the Company was in compliance with each of these financial covenants.

The effective interest rate on the Line of Credit under the Loan and Security Agreement for the nine-months ended March 31, 2012 was 1.91%.

On November 22, 2011, in conjunction with the Bytewise acquisition, the Company entered into a new $15.5 million term loan (the “Term Loan”) under the existing Loan and Security Agreement with TD Bank N.A.  The term loan is a ten year loan bearing a fixed interest rate of 4.5% and is payable in fixed monthly payments of principal and interest of $160,640.  The term loan is subject to the same financial covenants as the Loan and Security Agreement.

The Company completed the negotiations for a new Loan and and Security Agreement (Line of Credit) and executed the new agreement as of April 25, 2012.  The new Line of Credit is effective for three years commencing April 25, 2012 and expires on April 30, 2015.  The new agreement continues the current line of $23.0 million and interest rate of LIBOR plus 1.5%.  The material financial covenants of the new Loan and Security Agreement are: 1) total liabilities cannot exceed 85% of tangible net worth, 2) purchase no more than $15.0 million in capital expenditures on a fiscal year basis, 3) maintain a Debt Service Coverage Rate of a minimum of 1.25 to 1 and 4) maintain consolidated cash plus liquid investments of not less than $10.0 million at any time.  Based upon the terms of the newly amended Security and Loan Agreement, the Line of Credit has been reclassified to long-term debt in fiscal 2012 as the Agreement has a maturity greater than one year and meets all of the criteria necessary to be so classified.