Note 13 - Debt

12 Months Ended

Jun. 30, 2014

Debt Disclosure [Abstract]

Debt Disclosure [Text Block]

13. DEBT

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

	June 30, 2014		June 30, 2013
Short-term and current maturities
Loan and Security Agreement	$	10,410	$	1,348
Short-term foreign credit facility		-		27
Capitalized leases		138		182
	$	10,548	$	1,557
Long-term debt
Loan and Security Agreement, net of current portion	$	10,726	$	24,037
Capitalized leases		78		215
		10,804		24,252
Total debt	$	21,352	$	25,809

Future maturities of debt are as follows (in thousands):

Fiscal Year
2015	$	10,548
2016		1,552
2017		1,543
2018		1,614
2019		1,688
Thereafter		4,407
Total	$	21,352

The Company completed the negotiations for an amended Loan and Security Agreement (“Line of Credit”) and executed the new agreement as of April 25, 2012.  Borrowings under this agreement may not exceed $23.0 million.  The Line of Credit expires on April 30, 2015 and has an interest rate of LIBOR plus 1.5%.  The effective interest rate on the Line of Credit for fiscal 2014 was 2.01%. The Company intends to negotiate an extension of the Line of Credit.

On September 7, 2012, the Company completed an amendment to the financial covenants.  The material financial covenants of the amended Loan and Security Agreement are: 1) funded debt to EBITDA, excluding non-cash and retirement benefit expenses (“maximum leverage”), cannot exceed 1.45 to 1; 2) annual capital expenditures cannot exceed $15.0 million; 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.

On May 9, 2013, the Company further amended the agreement to adjust the current funded debt to EBITDA ratio from 1.45 to 1, to 2.25 to 1 for the fourth quarter of fiscal 2013 and the first quarter of fiscal 2014. Thereafter, and through the end of the agreement on April 30, 2015, the funded debt to EBITDA covenant reverts to 1.45 to 1.

On December 23, 2013, the Company amended the loan agreement to reverse the portion of the May 9, 2013 agreement that called for the funded debt to EBITDA ratio to revert back to 1.45 to 1 from 2.25 to 1, beginning with the second quarter of fiscal 2014. Under this new agreement the maximum ratio of funded debt to EBITDA will remain 2.25 to 1 for the remaining term of the loan. The Company expects to be able to meet the covenant in future periods.

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 then existing Loan and Security Agreement.  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 $15.5 million term loan is subject to the same financial covenants as the Loan and Security Agreement.

Availability under the Line of Credit is subject to a borrowing base comprised of accounts receivable and inventory.  The Company believes that the borrowing base will consistently produce availability under the Line of Credit in excess of $23.0 million.  As of June 30, 2014, the Company had borrowings of $9.0 million under this facility. A 0.25% commitment fee is charged on the unused portion of the Line of Credit.

The Company has three standby letters of credit totaling $0.5 million which reduce the $23.0 million available Line of Credit to $22.5 million.  As of June 30, 2014, the Company has approximately $13.5 million available in the Line of Credit.

The obligations under the Credit Facility are unsecured. In the event of certain triggering events, such obligations would become secured by the assets of the Company’s domestic subsidiaries. A triggering event occurs when the Company fails to achieve any of the financial covenants noted above in consecutive quarters.