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Note 7 - Debt | 9 Months Ended
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Feb. 26, 2017
Notes to Financial Statements |
Debt Disclosure [Text Block] |
7. | Debt
Long-term debt , net consists of the following (in thousands):
|  | February 26, 2017 |  |  | May 29, 2016 |
Term loan with JPMorgan Chase Bank (“JPMorgan”), BMO Harris Bank N,A. (“BMO”), and City National Bank; due in quarterly principal and interest payments of $1 ,25 0 beginning December 1, 2016 through September 23, 2021 with the remainder due on maturity, with interest based on the Company’s leverage ratio at a per annum rate of the Eurodollar rate plus a spread of between 1.25% and 2.25% |  | $ | 48,750 |  |  | $ | — |
Real property loan agreement with General Electric Capital Corporation (“GE Capital”); due in monthly principal and interest payments of $133 through May 1, 2022 with interest based on a fixed rate of 4.02% per annum |  |  | — |  |  |  | 14,167 |
Capital equipment loan with GE Capital; due in monthly principal and interest payments of $175 through May 1, 2019 with interest based on a fixed rate of 4.39% per annum |  |  | — |  |  |  | 5,904 |
Capital equipment loan with GE Capital; due in monthly principal and interest payments of $95 through July 17, 2019 with interest based on a fixed rate of 3.68% per annum |  |  | — |  |  |  | 5,558 |
Capital equipment loan with GE Capital; due in monthly principal and interest payments of $56 through December 1, 2019 with interest based on a fixed rate of 3.74% per annum |  |  | — |  |  |  | 3,375 |
Capital equipment loan with Bank of America (“BofA”); due in monthly principal and interest payments of $68 through June 28, 2020 with interest based on a fixed rate of 2.79% per annum |  |  | — |  |  |  | 3,158 |
Real property loan agreement with GE Capital; due in monthly principal payments of $32 through March 1, 2026, plus interest payable monthly at LIBOR plus 2.25% per annum |  |  | — |  |  |  | 7,622 |
Capital equipment loan with GE Capital; due in monthly principal payments of $108 through March 1, 2021, plus interest payable monthly at LIBOR plus 2.25% per annum |  |  | — |  |  |  | 8,873 |
Capital equipment loan with BofA; due in monthly principal and interest payments of $75 through November 27, 2020 with interest based on a fixed rate of 2.92% per annum |  |  | — |  |  |  | 3,940 |
Industrial revenue bonds (“ IRBs”) issued by Lifecore; due in annual payments through 2020 with interest at a variable rate set weekly by the bond remarketing agent (0.59% at May 29, 2016) |  |  | — |  |  |  | 2,065 |
Total principal amount of long-term debt |  |  | 48,750 |  |  |  | 54,662 |
Less: unamortized debt issuance costs |  |  | (276 | ) |  |  | (817 | )
Total long-term debt, net of unamortized debt issuance costs |  |  | 48,474 |  |  |  | 53,845 |
Less: current portion of long-term debt, net |  |  | (4,940 | ) |  |  | (7,873 | )
Long-term debt, net |  | $ | 43,534 |  |  | $ | 45,972 |
On September 23, 2016, the Company entered into a Credit Agreement with JPMorgan, BMO, and City National Bank, as lenders (collectively, the “Lenders”), and JPMorgan as administrative agent, pursuant to which the Lenders provided the Company with a $100 million revolving line of credit (the “Revolver”) and a $50 million term loan facility (the “Term Loan”), guaranteed by each of the Company’s direct and indirect subsidiaries and secured by substantially all of the Company’s assets, with the exception of the Company’s investment in Windset. Both the Revolver and the Term Loan mature i n five years (on September 23, 2021), with the Term Loan providing for quarterly principal payments of $1.25 million commencing December 1, 2016, with the remainder due at maturity. Interest on both the Revolver and the Term Loan is based on either the prime rate or Eurodollar rate, at the Company’s discretion, plus a spread based on the Company’s leverage ratio (generally defined as the ratio of the Company’s total indebtedness on such date to the Company’s consolidated earnings before interest, taxes, depreciation, and amortization (“EBITDA”) for the period of four consecutive fiscal quarters ended on or most recently prior to such date). The spread is at a per annum rate of (i) between 0.25% and 1.25% if the prime rate is elected or (ii) between 1.25% and 2.25% if the Eurodollar rate is elected. The Credit Agreement provides the Company the right to increase the Revolver commitments and/or the Term Loan commitments by obtaining additional commitments either from one or more of the Lenders or another lending institution at an amount of up to $75 million. The Credit Agreement contains customary financial covenants and events of default under which the obligation could be accelerated and/or the interest rate increased. The Company was in compliance with all financial covenants as of February 26, 2017 . On November 1, 2016, the Company entered into an interest rate swap agreement (“ Swap”) with BMO at a notional amount of $50 million. The Swap has the effect of changing the Company’s Term Loan obligation from a variable interest rate to a fixed 30 -day LIBOR rate of 1.22%. As of February 26, 2017, the interest rate on the Term Loan was 2.97%. For further discussion regarding the Company’s use of derivative instruments, see the Financial Instruments section of Note 1 – Organization, Basis of Presentation, and Summary of Significant Accounting Policies . In connection with the Credit Agreement, the Company incurred lender and third -party debt issuance costs of $ 897 ,000, of which $598,000 and $299,000 was allocated to the Revolver and Term Loan, respectively. As of February 26, 2017, no balance was outstanding on the Revolver. Concurrent with the close of the Credit Agreement, all of the proceeds of the Term Loan, and $1.5 million of the Revolver, was used by the Company to repay all then existing debt. Accordingly, the Company recognized a loss on debt refinancing of $1.2 million, including $233,000 of payments for early debt extinguishment penalties, for the quarter ended November 27, 2016, primarily related to the write-off of unamortized debt issuance costs on the Company’s then existing debt as of September 23, 2016.

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- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21475-112644 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02.19,20,22) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 + Details
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