Note 8. Long-Term Debt

On June 30, 2004, the Company refinanced its previously existing term loan with a bank. The original principal amount of the loan was $4.5 million, payable in monthly installments of principal and interest with the balance due at the initial maturity date, June 30, 2011. On May 20, 2011, the Company entered into an agreement with Wells Fargo Bank, National Association, and SunTrust Bank, effective July 1, 2011, to extend the maturity date to July 1, 2016. The other key provisions of the loan remain the same, except that the interest rate adjusted to LIBOR plus 2.00%, from LIBOR plus 1.75%. The note is secured by a first position deed of trust encumbering Company-owned real property in Hunt Valley, Maryland. The loan is generally subject to the same financial covenants as the Company's revolving credit facility (see Note 7), which requires the Company to meet certain financial covenants and ratios and contains other limitations, including certain restrictions on dividend payments. The balance of this note at April 1, 2012 and March 27, 2011 was $2,775,000 and $3,000,000, respectively. The weighted average interest rate on borrowings under this note was 2.48%, 2.53% and 2.06% for fiscal years 2012, 2011 and 2010, respectively. Interest expense under this note was $63,500, $64,200 and $60,000 for fiscal years 2012, 2011 and 2010, respectively.

On October 1, 2005, the Company entered into a receive variable/pay fixed interest rate swap on a total original notional amount of $4.2 million with Wells Fargo Bank, National Association (formerly Wachovia Bank, National Association) to avoid the risks associated with fluctuating interest rates on the term loan, which until July 1, 2011 bore interest at a floating rate of LIBOR plus 1.75%, and to eliminate the variability in the cash outflow for interest payments. The interest rate swap agreement locked the interest rate for the outstanding principal balance of the loan at 6.38% through June 30, 2011, and upon expiration on that date, was not extended as part of the May 20, 2011 extension of the term loan. There was no payment due or received at inception of the swap. No hedge ineffectiveness was recognized because the interest rate swap provisions matched the applicable provisions of the term bank loan. This cash flow hedge qualified for hedge accounting using the short-cut method since the swap terms matched the critical terms of the hedged debt. The fair value of this interest rate swap, net of tax, at March 27, 2011 was an unrealized loss of $24,600, and is included in current liabilities and accumulated other comprehensive loss on the accompanying Consolidated Balance Sheets.

On March 31, 2009, the Company entered into a term loan with the Baltimore County Economic Development Revolving Loan Fund for an aggregate principal amount of $250,000. At April 1, 2012 and March 27, 2011, the principal balance of this term loan was $182,200 and $207,800, respectively. The term loan is payable in equal monthly installments of principal and interest of $2,300, with the balance due at maturity on April 1, 2019. The term loan bears interest at 2.00% per annum. Interest expense under this note was $3,900 and $4,000 for fiscal years 2012 and 2011, respectively. The term loan is secured by a subordinate position on Company-owned real property located in Hunt Valley, Maryland.

At March 27, 2011, the Company had a note payable outstanding to the Maryland Economic Development Corporation of $110,400. The note was payable in equal quarterly installments of principal and interest of $37,400, with the balance due at maturity, October 10, 2011. The note was paid in full during fiscal year 2012. The note bore interest at 3.00% per annum. Interest expense under this note was $1,700, $6,000 and $10,200 for fiscal years 2012, 2011 and 2010, respectively.

As of April 1, 2012, scheduled annual maturities of long-term debt are as follows:

Fiscal year:
2013	$	249,200
2014		249,700
2015		250,200
2016		250,600
2017		1,901,200
Thereafter		56,300
	$	2,957,200