Note 8 - Notes Payable and Bank Credit Facility

3 Months Ended

Feb. 28, 2015

Debt Disclosure [Abstract]

Debt Disclosure [Text Block]

8. Notes Payable and Bank Credit Facility

Our notes payable consist of the following:

	February 28, 2015
	Principal Balance			Unamortized Discount			Net Carrying Amount
Zenith acquisition note payable	$	9,000		$	(541	)	$	8,459
Transportation equipment notes payable		3,229			-			3,229
Real estate notes payable		3,606			-			3,606
Total Debt		15,835			(541	)		15,294
Less current portion		(4,881	)		295			(4,586	)
Total long-term debt	$	10,954		$	(246	)	$	10,708

	November 29, 2014
	Principal Balance			Unamortized Discount		Net Carrying Amount
Real estate notes payable	$	2,218		$	-	$	2,218
Less current portion		(316	)		-		(316	)
Total long-term debt	$	1,902		$	-	$	1,902

The future maturities of our notes payable are as follows:

Remainder of fiscal 2015	$	1,500
Fiscal 2016		5,560
Fiscal 2017		4,165
Fiscal 2018		3,720
Fiscal 2019		486
Fiscal 2020		404
Thereafter		-
	$	15,835

Zenith Acquisition Note Payable

As part of the consideration given for our acquisition of Zenith on February 2, 2015, we issued an unsecured note payable to the former owner in the amount of $9,000. The note is payable in three annual installments $3,000 beginning February 2, 2016. Interest is payable annually at the one year LIBOR rate, which was established at 0.62% on February 2, 2015 and resets on each anniversary of the note. The note was recorded at its fair value in connection with the acquisition resulting in a debt discount that is amortized to the principal amount through the recognition of non-cash interest expense over the term of the note. Interest expense resulting from the amortization of the discount was not material for the quarter ended February 28, 2015. The current portion of the note due within one year, including unamortized discount, is $2,705 at February 28, 2015.

Transportation Equipment Notes Payable

Certain of the transportation equipment operated in our logistical services segment is financed by notes payable in the amount of $3,229. These notes are payable in fixed monthly payments of principal and interest at fixed and variable rates ranging from 3.75% to 4.50% at February 28, 2015, with remaining terms of five to fifty months. The current portion of these notes due within one year at February 28, 2015 is $1,289. The notes are secured by tractors, trailers and local delivery trucks with a total net book value of $4,989 at February 28, 2015. In January of 2015, Zenith received a bank commitment in the amount of $1,307 to fund the purchase of new trailers, of which $660 was drawn the first quarter of fiscal 2015 with the remaining $647 expected to be drawn during the second quarter of fiscal 2015.

Real Estate Notes Payable

Certain of our retail real estate properties have been financed through commercial mortgages with interest rates of 6.73%. These mortgages are collateralized by the respective properties with net book values totaling approximately $6,093 and $6,127 at February 28, 2015 and November 29, 2014, respectively. The current portion of these mortgages due within one year was $321 and $316 as of February 28, 2015 and November 29, 2014, respectively.

Certain of the real estate located in Conover, NC and operated in our logistical services segment is subject to a note payable in the amount of $1,430. The note is payable in monthly installments of principal and interest at the fixed rate of 3.75% through October 2016, at which time the remaining balance on the note of approximately $1,050 will be due. The current portion of this note due within one year at February 28, 2015 is $270. The note is secured by land and buildings with a total net book value of $6,317 at February 28, 2015.

Fair Value

We believe that the carrying amount of our notes payable approximates fair value at both February 28, 2015 and November 29, 2014. In estimating the fair value, we utilize current market interest rates for similar instruments. The inputs into these fair value calculations reflect our market assumptions and are not observable. Consequently, the inputs are considered to be Level 3 as specified in the fair value hierarchy in ASC Topic 820, Fair Value Measurements and Disclosures. See Note 12.

Bank Credit Facility

Our credit facility with our bank provides for a line of credit of up to $15,000. This credit facility, which matures in December of 2015, is secured by our accounts receivable and inventory. The facility contains covenants requiring us to maintain certain key financial ratios. We are in compliance with all covenants under the agreement and expect to remain in compliance for the foreseeable future.

At February 28, 2015, we had $216 outstanding under standby letters of credit, leaving availability under our credit line of $14,784.