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Borrowings
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Sep. 29, 2012
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| Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Borrowings |
Borrowings
Long-term debt, capital lease and other financing obligations as of September 29, 2012 and December 31, 2011 consist of the following:
On January 24, 2011, we entered into a $2,550 term loan with PNC Bank to refinance the existing mortgage on our California facility. The term loan is payable as follows, subject to acceleration upon the occurrence of an event of default or termination of the Revolving Credit Agreement: 119 consecutive monthly principal payments of $21 plus interest commencing on February 1, 2011 and continuing on the first day of each month thereafter followed by a 120th payment of all unpaid principal, interest and fees on February 1, 2021. The term loan is collateralized with our California facility located in Compton, California. The term loan bears interest at PNC Base Rate plus 2.25%, or 1-, 2- or 3-month PNC LIBOR Rate plus 3.25%. As of September 29, 2012 and December 31, 2011, the interest rate was 5.50%.
In connection with the letter from PNC (“default notice”) notifying us that we had failed to comply with the covenant regarding loans to AAP and that PNC was reserving all rights and remedies available to it under the Credit Agreement or otherwise, including the right to declare the entire amount due and payable. PNC has not accelerated the obligations, but as a result of its right to do so we have reclassified $1,849 of long-term debt as current liabilities as of September 29, 2012. See Note 7 for further discussion regarding the Credit Agreement entered into with PNC.
On March 10, 2011, ARCA Advanced Processing, LLC entered into three separate commercial term loans (“Term Loans”) with Susquehanna Bank, pursuant to the guidelines of the U.S. Small Business Administration 7(a) Loan Program. The total amount of the Term Loans is $4,750, split into three separate loans for $2,100; $1,400; and $1,250. The Term Loans mature in ten years and bear an interest rate of Prime plus 2.75%. As of September 29, 2012 and December 31, 2011, the interest rate was 6.00%. Borrowings under the Term Loans are secured by substantially all of the assets of AAP along with liens on the business assets and certain personal assets of the owners of 4301 Operations, LLC. We are a guarantor of the Term Loans along with 4301 Operations, LLC and its owners.
Capital leases and other financing obligations: We acquire certain equipment under capital leases and other financing obligations. The cost of the equipment was approximately $1,974 and $1,940 at September 29, 2012 and December 31, 2011, respectively. Accumulated amortization at September 29, 2012 and December 31, 2011 was approximately $1,555 and $1,458, respectively. Depreciation and amortization expense is included in cost of revenues and selling, general and administrative expenses.
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