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Note 7 - Debt | 12 Months Ended
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May 28, 2017
Notes to Financial Statements |
Debt Disclosure [Text Block] |
7 . | Debt
Long-term debt consists of the following (in thousands):
|  | May 28 , 2017 |  |  | May 29, 2016 |
Term loan with JPMorgan Chase Bank (“ JPMorgan”), BMO Harris Bank N,A. (“BMO”), and City National Bank (“CNB”); due in quarterly principal and interest payments of $1,250 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% |  | $ | 47,500 |  |  | $ | — |
Real property loan agreement with General Electric Capital Corporation (“GE Capital”); due in monthly principal and interest payments of $133,060 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 $175,356 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 $95,120 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 $55,828 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 $68,274 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 $46,000 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 $122,000 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 $75,000 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 |  |  | — |  |  |  | 2,065 |
Total principal amount of long-term debt |  |  | 47,500 |  |  |  | 54,662 |
Less: unamortized debt issuance costs |  |  | (261 | ) |  |  | (817 | )
Total long-term debt, net of unamortized debt issuance costs |  |  | 47,239 |  |  |  | 53,845 |
Less: current portion of long-term debt, net |  |  | (4,940 | ) |  |  | (7,873 | )
Long-term debt, net |  | $ | 42,299 |  |  | $ | 45,972 |
The future minimum principal payments of the Company ’s debt for each year presented are as follows (in thousands):
|  | Term Loan |
Fiscal year 2018 |  | $ | 5,000 |
Fiscal year 2019 |  |  | 5,000 |
Fiscal year 2020 |  |  | 5,000 |
Fiscal year 2021 |  |  | 5,000 |
Fiscal year 202 2 |  |  | 27,500 |
Thereafter |  |  | — |
Total |  | $ | 47,500 |
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 in 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 matu rity. 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 obta ining 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 acc elerated and/or the interest rate increased. The Company was in compliance with all financial covenants as of May 28, 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 May 28, 2017, the interest rate on the Term Loan was 2.72%. 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 in fiscal year 2017 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. During fiscal years 2016 and 2015, Apio capitalized $200,000 and $397,000, respectively, of debt issuance costs from new real property and equipment loans and/or amendments with General Electric Capital Corporation and Bank of America. Amortization of loan origination fees for fiscal years 2017, 2016 and 2015 were $142,000, $293,000 and $206, 000 respectively. 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 mill ion, which included $233,000 of payments for early debt extinguishment penalties and $1.0 million from the write-off of unamortized debt issuance costs on the Company’s then existing debt as of September 23, 2016. As of May 28, 2017, $3.0 million was outstanding on the Revolver. As of May 28, 2017, the interest rate on the Revolver was 2.57%.

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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 470 -URI http://asc.fasb.org/topic&trid=2208564 + Details
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