Annual report pursuant to Section 13 and 15(d)

Credit facilities

Credit facilities
12 Months Ended
Sep. 30, 2014
Credit facilities  
Credit facilities

11. Credit facilities

        On March 15, 2013, we entered into an unsecured five-year revolving credit agreement (the "Credit Agreement"). The Credit Agreement amended and restated our existing revolving credit agreement entered into in January 2008. The Credit Agreement provides for a revolving line of credit up to $100 million that may be used for revolving loans, swingline loans (subject to a sublimit of $5 million), and to request letters of credit, subject to a sublimit of $30 million. The line of credit is available for general corporate purposes, including working capital, capital expenditures and acquisitions. The arrangement will terminate on March 15, 2018, at which time all outstanding borrowings must be repaid.

        We had no borrowings under the Credit Agreement at September 30, 2014.

        At September 30, 2014, our only indebtedness under the Credit Agreement was three letters of credit totaling $4.7 million. Each of these letters of credit may be called by customers in the event that the Company defaults under the terms of a contract, the probability of which we believe is remote. In addition, two letters of credit totaling $3.0 million, secured with restricted cash balances, are held with another financial institution to cover similar obligations.

        The Credit Agreement requires us to comply with certain financial covenants and other covenants including a maximum total leverage ratio and a minimum fixed charge coverage ratio. We were in compliance with all covenants as of September 30, 2014. Our obligations under the Credit Agreement are guaranteed by material domestic subsidiaries of the Company. The Credit Facility is currently unsecured. In the event that our total leverage ratio, as defined in the credit agreement, exceeds 2.5 to 1.0 or we incur a certain level of indebtedness outside of the Credit Agreement, the Credit Agreement will become secured by the assets of the parent company and certain of its subsidiaries. At September 30, 2014, our total leverage ratio was negligible.

        The Credit Agreement provides for an annual commitment fee payable on funds not borrowed or utilized for letters of credit. This charge is based upon our leverage and varies between 0.15% and 0.3%. Borrowings under the Credit Agreement bear interest at our choice at either (a) a Base Rate plus a margin that varies between 0.0% and 0.75% per year, (b) a Eurocurrency Rate plus an applicable margin that varies between 1.0% and 1.75% per year or (c) an Index Rate plus an applicable margin which varies between 1.0% and 1.75% per year. The Base Rate, Eurocurrency Rate and Index Rate are defined by the Credit Agreement.

        In addition to this revolving credit facility, we have a loan agreement with the Atlantic Innovation Fund of Canada. This provided a loan of $1.8 million (Canadian), the proceeds of which were required to be used for specific technology-based research and development. The loan has no interest charge. At September 30, 2014, $1.2 million ($1.4 million Canadian) was outstanding under this agreement, which is repayable in 31 remaining quarterly installments.

        Certain contracts require us to provide a surety bond as a guarantee of performance. At September 30, 2014, we had performance bond commitments totaling $38.2 million. These bonds are typically renewed annually and remain in place until the contractual obligations have been satisfied. Although the triggering events vary from contract to contract, in general we would only be liable for the amount of these guarantees in the event of default in our performance of our obligations under each contract, the probability of which we believe is remote.