Note 5 - Long-term Debt

9 Months Ended

Nov. 27, 2016

Notes to Financial Statements

Debt Disclosure [Text Block]

5 . LONG - TERM DEBT

On

February

12,

2014,

the Company entered into a

four

- year amended and restated revolving credit facility agreement (the “Amended Credit Agreement”) with PNC Bank, National Association (“PNC Bank”). The Amended Credit Agreement provided for loans up to

$104,000

to the Company and letters of credit up to

$2,000

for the account of the Company. Through

January

15,

2016,

the Company had borrowed

$52,000

to finance a special dividend paid to shareholders of the Company in the

2014

fiscal year

fourth

quarter and an additional

$52,000

to continue the loan that was provided under a prior credit agreement with PNC Bank, and PNC Bank had issued

two

standby letters of credit for the account of the Company in the total amount of

$1,075

to secure the Company’s obligations under its workers’ compensation insurance program. During the

2016

fiscal year, the Company made principal payments of

$10,000

in accordance with the Amended Credit Agreement.

On

January

15,

2016,

the Company entered into a

three

- year revolving credit facility agreement (the “Credit Agreement”) with HSBC Bank USA, National Association (“HSBC Bank”). This Credit Agreement replaced the Amended Credit Agreement that the Company entered into with PNC Bank in

February

2014

described in the preceding paragraph. The Credit Agreement provides for loans up to

$75,000

and letters of credit up to

$2,000.

The

$75,000

is payable in

twelve

quarterly installments of

$750

each, beginning in

March

2016,

with the remaining amount outstanding under the Credit Agreement payable on

January

26,

2019.

Borrowings under the Credit Agreement bear interest at a rate equal to, at the Company’s option, either (a) a fluctuating rate per annum (computed on the basis of a year of

365

or

366

days, as the case

may

be, and actual days elapsed) equal to the Base Rate (as defined in the Credit Agreement), such interest rate to change automatically from time to time effective as of the effective date of each change in the Base Rate or (b) a rate per annum (computed on the basis of a year of

360

days and actual days elapsed) equal to the

one,

two,

three

or

six

month LIBOR plus

1.15%.

Under the Credit Agreement, the Company is also obligated to pay to HSBC Bank a nonrefundable commitment fee equal to

0.10%

per annum (computed on the basis of a year of

360

days and actual days elapsed) multiplied by the average daily difference between the amount of (i) the revolving credit commitment plus the letter of credit facility and (ii) the revolving facility usage, payable quarterly in arrears.

On

January

5,

2017,

the Company entered into an amendment to the Credit Agreement (the “Amended Credit Agreement”) with HSBC Bank that modified the LIBOR interest rate and certain covenants. Under the Amended Credit Agreement, the LIBOR interest rate will be equal to the

one,

two,

three,

or

six

month LIBOR plus (a)

1.65%

through

April

5,

2017,

(b)

1.90%

from

April

6,

2017

through

July

5,

2017,

(c)

2.15%

from

July

6,

2017

through

October

5,

2017

and (d)

2.65%

at and after

October

6,

2017.

The Credit Agreement and the Amended Credit Agreement contain certain customary affirmative and negative covenants, including customary financial covenants. The covenants require the Company to (a) maintain a gross leverage charge ratio not to exceed

4.50

to

1.00

for the fiscal quarters ending

February

26,

2017

and

May

28,

2017,

4.25

to

1.00

for the fiscal quarter ending

August

27,

2017

and

3.75

to

1.00

each fiscal quarter thereafter, (b) maintain a minimum fixed charge coverage ratio of

0.30

to

1.00

for the fiscal quarter ending

February

26,

2017,

0.20

to

1.00

for the fiscal quarter ended

May

28,

2017,

0.50

to

1.00

for the fiscal quarter ending

August

27,

2017

and

1.10

to

1.00

for each fiscal quarter thereafter, and (c) maintain a minimum quick ratio of

2.00

to

1.00

beginning with the fiscal quarter

first

ending after

January

26,

2016

and continuing thereafter. In addition, the Company must maintain minimum domestic liquid assets of

$10,000

in cash held at all times in a domestic deposit account

At

November

27,

2016,

$72,750

of indebtedness was outstanding under the Credit Agreement with an interest rate of

1.79%.

Interest expense recorded under the Credit Agreement and the Amended Credit Agreement was

$343

and

$1,010

during the

13

- week and

39

- week periods ended

November

27,

2016,

respectively, and

$355

and

$1,080

during the

13

- week and

39

- week periods ended

November

29,

2015,

respectively.