Note 3 - Debt

12 Months Ended

Aug. 25, 2013

Debt Disclosure [Abstract]

Debt Disclosure [Text Block]

3.        DEBT

Long-term debt consists of the following:

	August 25, 2013		August 26, 2012
Building related mortgages & term debt	$	4,162,425	$	1,081,307
Capitalized lease obligations		7,927,880		5,758,842
		12,090,305		6,840,149
Less current portion		1,921,708		1,377,295
Long-term debt	$	10,168,597	$	5,462,854

In August 2012, the Company announced that it was expanding its Monticello, Minnesota facility. The 47,000 square foot expansion would roughly double the amount of manufacturing space of the Company and would increase the total facility size to approximately 107,000 square feet. The expansion was completed in the Company’s fiscal 2013 fourth quarter and cost approximately $3.8 million which was paid for by a combination of cash on hand and a new mortgage agreement with its bank which was finalized in May 2013.

The new mortgage with its bank was for $4.2 million, carries an interest rate of 2.843%, requires monthly payments of $22,964 based on a 20 year amortization schedule and matures on May 8, 2018. The new mortgage satisfied the original mortgage of $1.1 million and provided the Company $3.1 million to use toward its building expansion project. The original mortgage that has been paid off had an interest rate is 4.38% with monthly payments of $7,637 based on a 25-year amortization schedule. Both the new and original mortgages were secured by all assets of the Company.

Maturities of long-term debt are as follows:

Fiscal years ending August:
2014	$	1,921,708
2015		1,616,705
2016		1,348,129
2017		1,371,692
2018		4,619,119
Thereafter		1,212,952

Included in the consolidated balance sheet at August 25, 2013 are cost and accumulated depreciation on equipment subject to capitalized leases of $12,749,183 and $5,019,442, respectively. At August 26, 2012, the amounts were $9,512,910 and $3,909,030, respectively. The capital leases carry interest rates from 3.5% to 8.0% and mature from 2014 – 2020.

The present value of the net minimum payments on capital leases which is included in long-term debt as of August 25, 2013 is as follows:

Fiscal years ending August:
2014	$	2,052,941
2015		1,665,291
2016		1,336,547
2017		1,309,416
2018		1,187,944
Thereafter		1,248,830
Total minimum lease payments		8,800,969
Less amount representing interest		873,089
Present value of net minimum lease payments		7,927,880
Current portion		1,762,361
Capital lease obligation, less current portion	$	6,165,519

Line of Credit:

At February 1, 2013, the Company renewed and modified its Revolving Line of Credit with its bank. Under the agreement the Company could borrow up to $3 million through May 31, 2013 at which time the maximum amount that could be borrowed was reduced to $1 million. The agreement expires on February 1, 2014, is collateralized by all assets of the Company and carries an interest rate of LIBOR plus 2%. The agreement also contains restrictive provisions requiring a minimum net worth ratio, a maximum debt to tangible net worth ratio as well as a debt service coverage ratio. At August 25, 2013, the Company was in compliance with these provisions. There were no amounts outstanding related to its revolving credit agreement at August 25, 2013 and August 26, 2012, respectively.