Debt and Line of Credit

3 Months Ended

Nov. 26, 2017

Debt Disclosure [Abstract]

Debt and Line of Credit

4. DEBT AND LINE OF CREDIT:

During fiscal 2017, the Company placed purchase orders for two new pieces of equipment for approximately $2,055,000 that will be delivered and put into service during fiscal 2018. The Company also made advance deposits on that equipment totaling $687,000 which has been classified as machinery and equipment on the balance sheet at August 27, 2017. During the first quarter of fiscal 2018, the Company made additional deposits of $807,000 which have also been classified as machinery and equipment.

In addition, during fiscal 2017, the Company entered into a debt agreement related to one of the pieces of equipment. During the fiscal 2018 first quarter, the Company entered into a debt agreement on the second piece of equipment. Also during the fiscal 2018 first quarter, the Company received loan advances on the two debt agreements totaling $1,092,000 which was also the amount outstanding at November 26, 2017. Until the commencement of the loan agreements upon final installation and approval of the equipment, the Company will pay interest only on the amounts loaned. There were no amounts outstanding related to either debt agreement at August 27, 2017. Upon commencement, both agreements will be for five years. The interest rate on one debt agreement is fixed at 4.25% while the interest rate on the second agreement will be fixed at commencement and will be based on a spread over a base reference rate.