Annual report pursuant to Section 13 and 15(d)

Long-Term Debt

 v2.3.0.11
Long-Term Debt
12 Months Ended
Apr. 30, 2011
Long-Term Debt [Abstract]  
Long-Term Debt
 
11.   Long-Term Debt
 
During March 2011, the Company replaced its existing credit facility, which expired on March 14, 2011, with a new Senior Secured Revolving Facility (the “Facility”) which provides an aggregate availability up to $50 million with a $10 million sub-limit for letters of credit, subject to satisfaction of borrowing base requirements based on eligible domestic and foreign accounts receivable. The new facility matures on March 14, 2014 and prior to each anniversary date, the Company can request one year extensions, subject to lender consent. Borrowings under the Facility bear interest, at the election of the Company, at the London Interbank Offered Rate (“LIBOR”) plus applicable margin or the base rate plus applicable margin. The base rate is the highest of (i) the published prime rate, (ii) the federal funds rate plus 0.50%, or (iii) one month LIBOR plus 2.0%. The applicable margin is based on a percentage per annum determined in accordance with a specified pricing grid based on (a) the total funded debt ratio of the Company and (b) with respect to LIBOR loans, whether such LIBOR loans are cash collateralized. For cash collateralized LIBOR loans, the applicable margin will range from 0.65% to 3.15% per annum. For LIBOR loans that are not cash collateralized and for base rate loans, the applicable margin will range from 1.50% to 4.50% per annum (if using LIBOR) and from 1.50% to 4.75% per annum (if using base rate). The Company pays quarterly commitment fees of 0.25% to 0.50% on the Facility’s unused commitments based on the Company’s leverage ratio. The Facility is secured by substantially all of the assets of the Company’s domestic subsidiaries and 65% of the equity interest in all the first tier foreign subsidiaries. The financial covenants include a maximum consolidated leverage ratio, a minimum consolidated fixed charge coverage ratio and a minimum $30 million in unrestricted cash and/or marketable securities after taking into account the accrual for employee compensation and benefits.
 
As of April 30, 2011, we had no borrowings under the Facility; however, we are required to maintain $10.0 million on account with the lender, and provides collateral for the standby letters of credit and potential future borrowings. At April 30, 2011, there were $2.9 million standby letters of credit issued under this Facility. This amount is included in long-term investments and other assets in the consolidated balance sheet as of April 30, 2011.
 
As of April 30, 2010, the Company had no borrowings under the previous credit facility; however, at April 30, 2010 there was $8.2 million of standby letters of credit issued under the previous credit facility, for which the Company pledged $9.0 million in cash.
 
The Company has outstanding borrowings against the CSV of COLI contracts of $72.9 million and $66.9 million at April 30, 2011 and 2010, respectively. These borrowings are secured by the CSV of the life insurance policies. Principal payments are not scheduled and interest is payable at least annually, at various fixed and variable rates ranging from 5.45% to 8.00%.