Note 8 - Notes Payable and Bank Credit Facility

3 Months Ended

Feb. 25, 2017

Notes to Financial Statements

Debt Disclosure [Text Block]

8

.

Notes Payable and Bank Credit Facility

Our notes payable consist of the following:

	February 25, 2017
	Principal Balance			Unamortized Discount			Net Carrying Amount
Zenith acquisition note payable	$	3,000		$	(71	)	$	2,929
Real estate notes payable		1,124			-			1,124
Total Debt		4,124			(71	)		4,053
Less current portion		(3,391	)		71			(3,320	)
Total long-term debt	$	733		$	-		$	733

	November 26, 2016
	Principal Balance			Unamortized Discount			Net Carrying Amount
Zenith acquisition note payable	$	6,000		$	(108	)	$	5,892
Real estate notes payable		1,219			-			1,219
Total Debt		7,219			(108	)		7,111
Less current portion		(3,385	)		95			(3,290	)
Total long-term debt	$	3,834		$	(13	)	$	3,821

The future maturities of our notes payable are as follows:

Remainder of fiscal 2017	$	291
Fiscal 2018		3,412
Fiscal 2019		421
Fiscal 2020		-
Fiscal 2021		-
Fiscal 2022		-
Thereafter		-
	$	4,124

Zenith

Acquisition Note Payable

As part of the consideration given for our acquisition of Zenith on

February

2,

2015,

we issued an unsecured note payable to the former owner in the amount of

$9,000,

payable in

three

annual installments of

$3,000

due on each anniversary of the note. Interest is payable annually at the

one

year LIBOR rate. The note was recorded at its fair value in connection with the acquisition resulting in a debt discount that is amortized to the principal amount through the recognition of non-cash interest expense over the term of the note. Interest expense resulting from the amortization of the discount was

$37

and

$66

for the quarters ended

February

25,

2017

and

February

27,

2016,

respectively. The current portion of the note due within

one

year, including unamortized discount, was

$2,929

and

$2,904

at

February

25,

2017

and

November

26,

2016,

respectively.

Real Estate Notes Payable

Certain of our retail real estate properties have been financed through commercial mortgages with outstanding principal totaling

$1,124

and

$1,219

at

February

25,

2017

and

November

26,

2016,

respectively. The mortgages bear interest at fixed rates of

6.73%.

They are collateralized by the respective properties with net book values totaling approximately

$5,825

and

$5,858

at

February

25,

2017

and

November

26,

2016,

respectively. The current portion of these mortgages due within

one

year was

$391

and

$385

as of

February

25,

2017

and

November

26,

2016,

respectively.

Fair Value

We believe that the carrying amount of our notes payable approximates fair value at both

February

25,

2017

and

November

26,

2016.

In estimating the fair value, we utilize current market interest rates for similar instruments. The inputs into these fair value calculations reflect our market assumptions and are not observable. Consequently, the inputs are considered to be Level

3

as specified in the fair value hierarchy in ASC Topic

820,

Fair Value Measurements and Disclosures

. See Note

3.

Bank

Credit Facility

Our credit facility with our bank provides for a line of credit of up to

$15,000.

This credit facility, which matures in

December

of

2018,

is unsecured and contains covenants requiring us to maintain certain key financial ratios. We are in compliance with all covenants under the agreement and expect to remain in compliance for the foreseeable future.

At

February

25,

2017,

we had

$1,972

outstanding under standby letters of credit against our line, leaving availability under our credit line of

$13,028.

In addition, we have outstanding standby letters of credit with another bank totaling

$511.