Note 8 - Notes Payable and Bank Credit Facility

9 Months Ended

Aug. 26, 2017

Notes to Financial Statements

Debt Disclosure [Text Block]

8

.

Notes Payable and Bank Credit Facility

Our notes payable consist of the following:

	August 26, 2017
	Principal Balance			Unamortized Discount			Net Carrying Amount
Zenith acquisition note payable	$	3,000		$	(32	)	$	2,968
Real estate notes payable		932			-			932
Total notes payable		3,932			(32	)		3,900
Less current portion		(3,405	)		32			(3,373	)
Total long-term notes payable	$	527		$	-		$	527

	November 26, 2016
	Principal Balance			Unamortized Discount			Net Carrying Amount
Zenith acquisition note payable	$	6,000		$	(108	)	$	5,892
Real estate notes payable		1,219			-			1,219
Total notes payable		7,219			(108	)		7,111
Less current portion		(3,385	)		95			(3,290	)
Total long-term notes payable	$	3,834		$	(13	)	$	3,821

The future maturities of our notes payable are as follows:

Remainder of fiscal 2017	$	99
Fiscal 2018		3,412
Fiscal 2019		421
Fiscal 2020		-
Fiscal 2021		-
Fiscal 2022		-
Thereafter		-
	$	3,932

Zenith

Acquisition Note Payable

As part of the consideration given for our acquisition of Zenith on

February 2, 2015,

we issued a

n unsecured note payable to the former owner in the amount of

$9,000,

payable in

three

annual installments of

$3,000

due on each anniversary of the note. Interest is payable annually at the

one

year LIBOR rate. 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

$19

and

$76

for the

three

and

nine

months ended

August 26, 2017,

respectively, and

$46

and

$158

for the

three

and

nine

months ended

August 27, 2016,

respectively. The current portion of the note due within

one

year, including unamortized discount, was

$2,968

and

$2,904

at

August 26, 2017

and

November 26, 2016,

respectively.

Real Estate Notes Payable

Certain of our retail real estate properties have been financed through commercial mortgages

with outstanding principal totaling

$932

and

$1,219

at

August 26, 2017

and

November 26, 2016,

respectively. The mortgages bear interest at fixed rates of

6.73%.

They are collateralized by the respective properties with net book values totaling approximately

$5,759

and

$5,858

at

August 26, 2017

and

November 26, 2016,

respectively. The current portion of these mortgages due within

one

year was

$405

and

$385

as of

August 26, 2017

and

November 26, 2016,

respectively.

Fair Value

We believe that the carrying amount of our notes payable approximates fair value at both

August 26, 2017

and

November 26, 2016.

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

3.

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

2018,

is unsecured and 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

August 26, 2017,

we had

$1,972

outstanding under standby letters of credit against our line, leaving availability under our credit line of

$13,028.

In addition, we have outstanding standby letters of credit with another bank totaling

$511.