Revolving Line of Credit and Lease Line

12 Months Ended

Dec. 28, 2013

Debt Disclosure [Abstract]

Revolving Line of Credit and Lease Line

(7) Revolving Line of Credit and Lease Line

In early May 2013, the Company renewed its $2 million revolving line of credit (“LOC”) and $500 thousand of an equipment finance facility (“Lease Line”) with Santander Bank.  Both agreements mature in May 2014.  The LOC is secured by the accounts receivable and other assets of the Company, has an interest rate of prime (3.25% at December 28, 2013) plus one percent (1%) and a one-year term. The LOC and the Lease Line are cross defaulted and cross collateralized. The Company is also subject to certain financial covenants within the terms of the line of credit that require the Company to maintain a targeted coverage ratio as well as targeted debt to equity and current ratios. At December 28, 2013, the Company was in compliance with existing covenants. 

At December 28, 2013, the Company had $76 thousand of capital equipment financed by capital lease obligations under the Lease Line (see note 4) and $424 thousand available remaining. Equipment financed by the Santander equipment lease qualifies for treatment as a capital lease once converted from the Lease Line to a lease. 

At December 28, 2013 the Company had no borrowings under this LOC while its borrowing base at the time would have permitted borrowings of $1.4 million.