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Note 9 - Line of Credit | 6 Months Ended
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Jun. 27, 2020
Notes to Financial Statements |
Debt Disclosure [Text Block] |
9. | Line of Credit
The Company and its subsidiaries amended and restated its Revolving Credit Facility with Citizens Bank of Pennsylvania on October 18, 2019. As amended and restated, the Revolving Credit Facility provides for a $45.0 million revolving credit facility, has no sub-limit for letters of credit, and expires on August 8, 2023. On June 2, 2020, the Company executed an amendment to its Revolving Credit Facility. The amendment (i) modifies certain aspects of the financial covenants under the Loan Agreement, including the definition of “Consolidated Total Funded Debt to Consolidated EBITDA Ratio” and the required compliance levels for such ratio, (ii) authorizes the stock purchase transaction completed on the same day (see footnote 12 ), and (iii) modifies the interest rate provisions to include customary LIBOR replacement protocols. Borrowings under the Revolving Credit Facility bear interest at one of two alternative rates, as selected by the Company at each incremental borrowing. These alternatives are: (i) LIBOR (London Interbank Offered Rate), plus applicable margin, typically borrowed in fixed 30 -day increments or (ii) the agent bank's prime rate generally borrowed over shorter durations. The Company also pays unused line fees based on the amount of the Revolving Credit Facility that is not drawn. Unused line fees are recorded as interest expense. The effective weighted average interest rate, including unused line fees, for the twenty-six week periods ended June 27, 2020 and June 29, 2019 were 3.1% and 4.7%, respectively. All borrowings under the Revolving Credit Facility are collateralized by all of the assets of the Company and its subsidiaries and a pledge of the stock of its subsidiaries. The Revolving Credit Facility also contains various financial and non-financial covenants, such as a covenant that restricts on the Company's ability to borrow in order to pay dividends. As of June 27, 2020, the Company was in compliance with all covenants contained in the Revolving Credit Facility (as amended). The June 2, 2020 amendment, among other things, modified certain aspects of the financial covenants under the Revolving Credit Facility, including the definitions relating to the financial covenant and the required compliance levels for such ratio. The Company believes that it will maintain compliance with its financial covenants for the foreseeable future. Borrowings under the line of credit as of June 27, 2020 and December 28, 2019 were $17.4 million and $34.8 million, respectively. At June 27, 2020 and December 28, 2019 there were letters of credit outstanding for $1.7 million and $1.6 million, respectively. At June 27, 2020, the Company had availability for additional borrowings under the Revolving Credit Facility of $25.9 million. Impact to Line of Credit from COVID- 19 The Company is negatively impacted by COVID- 19 as more fully described in Footnote 19 as well as the Segment Discussion, and Liquidity and Capital Resources sections in Management's Discussion and Analysis of Financial Condition and Results of Operations. The Company believes that its current line of credit is adequate to provide the necessary liquidity while COVID- 19 impacts its operations. While the Company does expect to be in compliance with its financial covenants in the line of credit for the foreseeable future, the Company can give no assurance that the line of credit will be available to the Company.

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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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -URI http://asc.fasb.org/topic&trid=2208564 + Details
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