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Equipment Notes Payable and Financial Arrangements
 8 Months Ended
Jul. 12, 2024
Debt Disclosure [Abstract]  
Equipment Notes Payable and Financial Arrangements

Note 6 – Equipment Notes Payable and Financial Arrangements:

 

Revolving Credit Facility

 

On November 30, 2023, we entered into a fifth amendment to the credit agreement with Wells Fargo Bank, N.A. dated March 1, 2018, as amended, and also executed a revolving line of credit note pursuant to the amendment. The revolving line of credit note replaces the existing note that expired by its terms on November 30, 2023. Under the terms of this amendment and the revolving line of credit note, we may borrow up to $7,500 from time to time up to November 30, 2024, at an interest rate equal to (a) the daily simple secured overnight financing rate plus 2.0%, or if unavailable, (b) the prime rate, in each case as determined by the bank. The line of credit has an unused commitment fee of 0.35% of the available loan amount, payable on a quarterly basis. Amounts may be repaid and reborrowed during the term of the note. Accrued interest is payable on the first day of each month and the outstanding principal balance and remaining interest are due and payable on November 30, 2024.

 

Equipment Note Payable

 

On December 26, 2018, we entered into a master collateral loan and security agreement with Wells Fargo Bank, N.A. (the “Original Wells Fargo Loan Agreement”) for up to $15,000 in equipment financing which was amended and expanded as detailed below. We subsequently entered into additional master collateral loan and security agreements with Wells Fargo Bank, N.A. on each of April 18, 2019, December 19, 2019, March 5, 2020, and April 17, 2020 (the Original Wells Fargo Loan Agreement and the subsequent agreements collectively referred to as the “Wells Fargo Loan Agreements”).

 

The following table reflects major components of our revolving credit facility and equipment note payable as of July 12, 2024, and November 3, 2023, respectively.

 

   July 12, 2024   November 3, 2023 
         
Revolving credit facility  $-   $- 
Equipment note payable:          
3.68% note due 04/16/27, out of lockout 04/17/22   3,143    3,831 
Total debt   3,143    3,831 
Less current debt   (1,075)   (1,045)
Total long-term debt  $2,068   $2,786 

 

Loan Covenants

 

The Wells Fargo Loan Agreements and the credit agreement contain various affirmative and negative covenants that limit the use of funds and define other provisions of the loans. Material financial covenants are listed below, and the capitalized terms are defined in the applicable agreements:

 

  ● Total Liabilities divided by Tangible Net Worth not greater than 2.0 to 1.0 at each fiscal quarter end,
     
  ● Quick Ratio not less than 1.25 to 1.0 at each fiscal quarter end, and
     
  ● Fixed Charge Coverage Ratio not less than 1.25 to 1.0 at each fiscal quarter end.

 

As of July 12, 2024, and November 3, 2023, the Company was in compliance with all covenants under the Wells Fargo Loan Agreements and the credit agreement.