Quarterly report pursuant to sections 13 or 15(d)

Debt And Other Long-Term Obligations

Debt And Other Long-Term Obligations
9 Months Ended
Sep. 30, 2011
Debt And Other Long-Term Obligations [Abstract]  
Debt And Other Long-Term Obligations
7. Debt and Other Long-term Obligations

On June 15, 2010, the Company entered into a credit facility with Bank of America, N.A. as Administrative Agent, and KeyBank National Association as Documentation Agent. The facility consists of a $30.0 million term loan and a $5.0 million revolving credit facility, both of which mature in June 2014. Interest on the term loan is payable at the Company's choice of LIBOR plus 4.5%, or the Bank of America prime rate plus 3.5%. As of September 30, 2011, interest was payable at LIBOR plus 4.5%, which equaled approximately 4.72%.

Proceeds from the term loan were used to repay the outstanding balance of the Company's debt held by Kimberly-Clark (I-Flow), as well as contribute to the acquisition consideration for First Biomedical.

In January 2011, the Company entered into the first amendment of the credit agreement, which defined the periods in which the fixed charge coverage ratio covenant should be calculated. In April 2011, the Company entered into the second amendment of the credit agreement, which modified the terms of capital expenditure limitation and capital lease indebtedness limitation covenants. In May 2011, the Company entered the third amendment of the credit agreement, which modified the definition of EBITDA.

As of September 30, 2011, the Company had a letter of credit in the amount of $81 thousand outstanding, leaving $4.9 million available on its revolving credit facility.

The term loan is collateralized by substantially all of the Company's assets and requires the Company to comply with covenants, including but not limited to, financial covenants relating to satisfaction of a total leverage ratio, a fixed charge coverage ratio and an annual limit on capital expenditures and capital leases. In conjunction with the new credit facility, the Company incurred deferred debt issuance costs of $808 thousand. These costs are recognized in income using the effective interest method through the maturity date of June 15, 2014. Amortization of these costs for the three and nine months ended September 30, 2011 was $59 thousand and $181 thousand, respectively, which was recorded in interest expense.

In conjunction with the acquisition of First Biomedical, the Company entered into a subordinated promissory note with the former majority shareholder of First Biomedical (the Seller) in the amount of $750 thousand. In accordance with the note, the Company will pay the Seller in equal installments over 24 months, which includes annual interest of 5%. As of September 30, 2011 and December 31, 2010, the outstanding principal due on the note was $290 thousand and $569 thousand, respectively.

The Company sometimes enters into capital leases to finance the purchase of ambulatory infusion pumps. The pumps are capitalized into property and equipment at their fair market value, which equals the value of the future minimum lease payments, and are depreciated over the useful life of the pumps.

Maturities on the loans and capital leases are as follows (in thousands):


     10/1/11 - 12/31/11      2012      2013      2014      Thereafter      Total  

Term Loan

   $ 1,125       $ 4,500       $ 4,875       $ 14,625       $ —         $ 25,125   

Seller Note

     95         194         —           —           —           289   

Capital Lease

     399         1,687         1,657         846         245         4,834   

Other loans

     50         204         212         84         1         551   




















   $ 1,669       $ 6,585       $ 6,744       $ 15,555       $ 246       $ 30,799