Debt

6 Months Ended

Feb. 29, 2012

Debt Disclosure [Abstract]

Debt Disclosure [Text Block]

Note 3. Debt

The Company has a $10,000,000 line of credit agreement with Community Bank. Borrowings under this agreement bear interest at either the 30, 60, or 90 day London Inter-Bank Offered Rate (“LIBOR”) (0.49% and 0.33% for the 90 day LIBOR at February 29, 2012 and August 31, 2011, respectively) plus 1.75% and/or the bank’s reference rate (3.25% at February 29, 2012 and August 31, 2011). Borrowings are secured by substantially all assets of Bisco and are guaranteed by the Company’s Chief Executive Officer and Chairman of the Board, Glen F. Ceiley. The agreement has been renewed until March 1, 2013.

The amount outstanding under this line of credit as of February 29, 2012 and August 31, 2011 was $9,150,000 and $8,500,000, respectively. Availability under the line of credit was $850,000 and $1,500,000 at February 29, 2012 and August 31, 2011, respectively.

The line of credit agreement contains nonfinancial and financial covenants, including the maintenance of certain financial ratios. As of February 29, 2012 and August 31, 2011, the Company was in compliance with all covenants.

On March 10, 2011, the Company entered into a $1,000,000 term loan agreement with Community Bank. The proceeds of the loan were used to pay down the Company’s line of credit. The term loan is for two years and bears interest at the bank’s reference rate (3.25% at February 29, 2012 and August 31, 2011). As of February 29, 2012, the outstanding balance of the term loan was $549,000.