9.	Line of Credit

The Company and its subsidiaries amended and restated its Revolving Credit Facility with Citizens Bank of Pennsylvania on

October 18, 2019.

As amended and restated, the Revolving Credit Facility provides for a

$45.0

million revolving credit facility, has

sub-limit for letters of credit, and expires on

August 8, 2023.

Borrowings under the Revolving Credit Facility bear interest at

one

two

alternative rates, as selected by the Company at each incremental borrowing. These alternatives are: (i) LIBOR (London Interbank Offered Rate), plus applicable margin, typically borrowed in fixed

-day increments or (ii) the agent bank’s prime rate generally borrowed over shorter durations. The Company also pays unused line fees based on the amount of the Revolving Credit Facility that is

not

drawn. Unused line fees are recorded as interest expense. The effective weighted average interest rate, including unused line fees, for the

thirteen

week periods ended

March 28, 2020

and

March 30, 2019

were

3.7%

and

4.7%,

respectively.

All borrowings under the Revolving Credit Facility are collateralized by all of the assets of the Company and its subsidiaries and a pledge of the stock of its subsidiaries. The Revolving Credit Facility also contains various financial and non-financial covenants, such as a covenant that restricts on the Company’s ability to borrow in order to pay dividends. As of

March 28, 2020,

the Company was in compliance with all covenants contained in the Revolving Credit Facility, except its financial covenant for the ratio of debt to EBITDA (earnings before interest, depreciation and amortization). The Company obtained an express waiver from Citizens Bank as of

March 28, 2020.

Beginning with the fiscal quarter ending

June 28, 2020

and continuing for the foreseeable future thereafter, the Company believes that it

may

not

be in compliance with its debt to EBITDA covenant. While the Company believes that Citizens Bank will provide future waivers or make changes to its current agreement so that compliance with the current debt to EBITDA covenant is

longer applicable, the Company can give

assurance that this will occur. Because the Company

may

not

be in compliance with its debt to EBITDA covenant in the future, the Company has classified its revolving line of credit as a current liability as of

March 28, 2020.

Borrowings under the line of credit as of

March 28, 2020

and

December 28, 2019

were

$32.8

million and

$34.8

million, respectively. At

March 28, 2020

and

December 28, 2019

there were letters of credit outstanding for

$1.7

million and

$1.6

million, respectively. At

March 28, 2020,

the Company had availability for additional borrowings under the Revolving Credit Facility of

$10.5

million.

Impact to Line of Credit from COVID-

The Company is negatively impacted by COVID-

as more fully described in Footnote

- Subsequent Events, and the Segment Discussion and Liquidity and Capital Resources sections in Management’s Discussion and Analysis of Financial Condition and Results of Operations. The Company believes that its current line of credit is adequate to provide the necessary liquidity while COVID-

impacts its operations. However, the Company does

not

expect to be in compliance with its debt to EBITDA covenant in the line of credit for the foreseeable future, and therefore can give

assurance that the line of credit will be available to the Company. While the Company anticipates significantly reducing the borrowings under its line of credit over the next

two

quarters, due to expected reductions in accounts receivable, the Company can give

assurance that it will be able to do so.