Note 8 - Bank Credit Facility

9 Months Ended

Aug. 26, 2023

Notes to Financial Statements

Debt Disclosure [Text Block]

8. Bank Credit Facility

Our bank credit facility provides for a line of credit of up to $25,000. At August 26, 2023, we had $3,731 outstanding under standby letters of credit against our line, leaving availability under our credit line of $21,269. The line bears interest at the One-Month Term Secured Overnight Financing Rate (“One-Month Term SOFR”) plus 1.5% and is unsecured. Our bank charges a fee of 0.25% on the daily unused balance of the line, payable quarterly. Under the terms of the bank credit facility, we must maintain the following financial covenants, measured quarterly on a rolling twelve-month basis:

● Consolidated fixed charge coverage ratio of not less than 1.4 times,

● Consolidated lease-adjusted leverage ratio not to exceed 3.0 times, and

● Minimum tangible net worth of $140,000.

We were in compliance with these covenants at August 26, 2023. The credit facility will mature on January 27, 2025, at which time any amounts outstanding under the facility will be due.