DEBT |
6 Months Ended |
|---|---|
Sep. 30, 2015 | |
| Debt Disclosure [Abstract] | |
| DEBT |
DEBT
On August 7, 2015, our credit agreement with Wells Fargo (as amended, the “WF credit agreement”) was amended to modify the maturity date, increase the amount of foreign accounts receivable and intellectual property assets included in our borrowing base and add an additional liquidity covenant.
Under the WF credit agreement, we have the ability to borrow the lesser of $75 million or the amount of the monthly borrowing base under a senior secured revolving credit facility. We may use proceeds from the WF credit agreement to repay our 3.50% convertible subordinated notes due November 15, 2015 ("3.50% notes") so long as we have a fixed charge coverage ratio of at least 1.5, liquidity of at least $25 million and no default or event of default is continuing under the WF credit agreement on the date of repayment. We have letters of credit totaling $1.0 million, reducing the maximum amount available to borrow to $74.0 million at September 30, 2015. As of September 30, 2015, and during the second quarter and first six months of fiscal 2016, we were in compliance with all covenants and had no outstanding balance on the line of credit. Quarterly, we are required to pay a 0.375% commitment fee on undrawn amounts under the revolving credit facility. The 3.50% notes are included in convertible subordinated debt, current and long-term, as they are due November 15, 2015 but are being repaid using a combination of existing cash and borrowings from our WF credit agreement which matures March 29, 2017.
The WF credit agreement contains financial covenants and customary events of default for such securities, including cross-payment default and cross-acceleration to other material indebtedness for borrowed money which require notice from the trustee or holders of at least 25% of the notes and are subject to a cure period upon receipt of such notice. Average liquidity must exceed $15 million each month, and at all times we must maintain minimum liquidity of $10 million, at least $5 million of which must be excess availability under the WF revolving credit facility. The fixed charge coverage ratio is required to be greater than 1.2 for the 12 month period ending on the last day of any month in which the covenant is applicable. This covenant is applicable only in months in which borrowings exceed $5 million at any time during the month. To avoid triggering mandatory field audits and Wells Fargo controlling our cash receipts, we must maintain liquidity of at least $20 million at all times. The fixed charge coverage ratio, average liquidity, liquidity and excess availability are each defined in the WF credit agreement and/or amendments thereto. Certain schedules in the compliance certificate must be filed monthly if borrowings exceed $5 million; otherwise they are to be filed quarterly.
On October 5, 2015, we entered into a private transaction with a note holder to purchase $81.0 million of aggregate principal amount of the 3.50% notes for $82.4 million, which included $1.1 million of accrued interest. In connection with this transaction, during the third quarter of fiscal 2016, we will record a loss on debt extinguishment of $0.4 million comprised of a loss of $0.3 million from the notes purchased and $0.1 million of unamortized debt issuance costs related to the purchased notes. We used a combination of $66.1 million of proceeds from the WF credit agreement and $16.3 million of cash on hand to fund the purchase and pay the accrued interest. At September 30, 2015, we had $16.3 million of restricted cash deposited in a Wells Fargo controlled account to repay the 3.50% notes and related interest.
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