This excerpt taken from the CSS 10-K filed Jun 5, 2007.
(8) LONG-TERM DEBT AND CREDIT ARRANGEMENTS
Long-term debt consisted of the following (in thousands):
On December 13, 2002, the Company issued $50,000,000 of 4.48% Senior Notes due December 13, 2009 (the Senior Notes). The Senior Notes are to be paid ratably over five years, beginning at the end of the third year of the seven year term of the agreement. The note purchase agreement contains various financial covenants, the most restrictive of which pertain to net worth, the ratio of operating cash flow to fixed charges and the ratio of debt to capitalization. The Company is in compliance with all covenants as of March 31, 2007.
On April 23, 2004, the Companys expiring $100,000,000 revolving credit facility was replaced with a $50,000,000 unsecured revolving credit facility with five banks. This facility expires on April 23, 2009. The loan agreement contains provisions to increase or reduce the interest pricing spread based on the achievement of certain benchmarks related to the ratio of earnings to interest expense. At the Companys option, interest on the facility accrues at (1) the greater of the prime rate minus 0.5% or the Federal Funds Rate, or (2) LIBOR plus .75%. The revolving credit facility provides for commitment fees of 0.225% per annum on the daily average of the unused commitment. The loan agreement also contains various financial covenants, the most restrictive of which pertain to net worth, the ratio of operating cash flow to fixed charges, the ratio of debt to capitalization and limitations on capital expenditures. The Company is in compliance with all financial debt covenants as of March 31, 2007.
On April 23, 2004, the Company entered into an extension of its accounts receivable securitization facility through July 25, 2009, although the facility is subject to earlier termination in the event of termination of the commitments of the facilitys back-up purchasers. The agreement permits the sale (and repurchase) of an undivided interest in an accounts receivable pool. The facility has a funding limit of $100,000,000 during peak seasonal periods and $25,000,000 during off-peak seasonal periods. Under this arrangement, the Company sells, on an ongoing basis and without recourse, its trade accounts receivable to a wholly-owned special purpose subsidiary (the SPS), which in turn has the option to sell, on an ongoing basis and without recourse, to a commercial paper issuer an undivided percentage interest in the pool of accounts receivable. Under the agreement, new trade receivables are automatically sold to the SPS and became a part of the receivables pool. Interest on amounts financed under this facility are based on a variable commercial paper rate plus 0.375% and commitment fees of 0.225% per annum on the daily average of the unused commitment are also payable under the facility. This arrangement is accounted for as a financing transaction.
The weighted average interest rate under the revolving credit facilities for the years ended March 31, 2007, 2006 and 2005, was 7.04%, 5.24% and 3.89%, respectively. The average and peak borrowings were $28,547,000 and $79,800,000, respectively, for the year ended March 31, 2007 and $33,436,000 and $91,400,000, respectively, for the year ended March 31, 2006. Additionally, outstanding letters of credit under the revolving credit facilities totaled $3,883,000 and $3,948,000 at March 31, 2007 and 2006, respectively. The Companys letters of credit guarantee funding of workers compensation claims as well as obligations to certain vendors.
The Company leases certain computer equipment under a capital lease. The future minimum annual lease payments, including interest, associated with the capital lease obligations are as follows (in thousands):
Long-term debt, including capital lease obligations, matures as follows (in thousands):