Debt

The following table summarizes credit facility debt, less current portion at March 14, 2018 and August 30, 2017:




	March 14, 2018			August 30, 2017
	(In thousands)
2016 Credit Agreement - Revolver	$	13,000		$	4,400
2016 Credit Agreement - Term Loan	25,170			26,585
Total credit facility debt	38,170			30,985
Less unamortized debt issue costs	(249		)	(287		)
Total credit facility debt, less unamortized debt issuance costs	37,921			30,698
Current portion of credit facility debt	—			—
Total	$	37,921		$	30,698

Amendment to 2016 Credit Agreement

On April 20, 2018, the Company amended our 2016 Credit Agreement (as defined below) effective as of March 14, 2018. The amendment accelerates the maturity date of the credit agreement to May 1, 2019, approximately 14 months after the balance sheet date, March 14, 2018. The amendment included the following changes:


•	Aggregate commitments under the senior secured revolving credit facility (“Revolver”) will be reduced from $30.0 million to $27.0 million beginning August 29, 2018.


•	Changed the maturity date of the Revolver and Term Loan to May 1, 2019.


•	Reduced the letter of credit sub-limit from $5.0 million to $2.0 million.


•	Interest rate on LIBOR Rate Loans (LIBOR + Applicable Margin) changed to the following:


◦	LIBOR + 4.50% April 20, 2018 - June 30, 2018


◦	LIBOR + 4.75% July 1, 2018 - September 30, 2018


◦	LIBOR + 5.00% October 1, 2018 - December 31, 2018


◦	LIBOR + 5.25% January 1, 2019 - March 31, 2019


◦	LIBOR + 5.50% April 1, 2019 - Maturity Date


•	Interest rate margin on Base Rate Loans changed to the following:


◦	100 basis points less than the Applicable Margin for LIBOR Rate Loans


•	Maximum Consolidated Total Lease-Adjusted Leverage Ratio (“CTLAL”) is changed to 6.50 to 1.00 at March 14, 2017; 6.75 to 1 at June 6, 2018 and August 29, 2018; and 6.50 to 1 at each measurement period in fiscal 2019.


•	Minimum Consolidated EBITDA covenant required at $7.0 million (thirteen consecutive accounting periods) tested monthly, prior to the second fiscal quarter fiscal 2019 and $7.5 million for each fiscal quarter thereafter (consisting of thirteen consecutive accounting periods).


•	Minimum liquidity covenant requiring for at least $2.0 million in liquidity at all times.


•	Maximum annual maintenance capital expenditures not to exceed $9.6 million for the fiscal year ending August 29, 2018 and $8.5 million in fiscal 2019.


•	Within 30 days of the date of amendment, a senior security interest in and lien on any of the Company's real estate properties identified by the Administrative Agent and loan to value ratio of 0.50 to 1.00 on collateral real estate.


•	Excess liquidity provision requiring any consolidated cash balances of the Borrower and its Subsidiaries in excess of $1.0 million, as reported in the 13-week cash flow reports, used to repay Revolving Credit Loans.

As of April 23, 2018, the Company is in compliance with all covenants under the terms of the 2016 Credit Agreement, as amended, and had $15.5 million of availability under the Revolver.

As of April 23, 2018, the Company had $1.3 million in outstanding letters of credit which it uses as security for the payment of insurance obligations.

Management has identified approximately 14 owned properties inclusive of assets currently classified as assets related to discontinued operations and Property held for sale on the Company’s balance sheet as part of a limited asset disposal plan to accelerate repayment of its outstanding term loans, with an estimated fair value of $25.2 million, as of April 23, 2018. The Finance and Audit Committee, of the Company's Board, approved the limited asset sales plan on April 18, 2018. The Company estimates that such additional limited asset sales plan will be implemented over the course of the next 18 months. These asset disposal plans, in conjunction with other operational changes, are designed to lower the outstanding debt and to improve the Company’s financial condition as the Company pursues a new credit facility with certain lenders within the existing 2016 credit agreement.

As of March 14, 2018, the Company would not have been in compliance with the Company’s Lease Adjusted Leverage Ratio and Fixed Charge Coverage Ratio covenants of the Company's 2016 Credit Agreement prior to the Second Amendment thereto, which became effective on March 14, 2018. At any determination date, if the results of the Company's covenants exceed the maximums or minimums permitted under its 2016 Credit Agreement, as amended, the Company would be considered in default under the terms of the agreement which could cause a substantial financial burden by requiring the Company to repay the debt earlier than otherwise anticipated. Due to negative results in the first two quarters of fiscal 2018, continued under performance in the current fiscal year could cause the Company's financial ratios to exceed the permitted limits under the terms of the 2016 Credit Agreement, as amended.

Senior Secured Credit Agreement

On November 8, 2016, we entered into a $65.0 million Senior Secured Credit Facility with Wells Fargo Bank, National Association, as Administrative Agent and Cadence Bank, NA and Texas Capital Bank, NA, as lenders (“2016 Credit Agreement”). The 2016 Credit Agreement, as amended, was comprised of a $30.0 million 5-year Revolver (the “Revolver”) and a $35.0 million 5-year Term Loan (the “Term Loan”). The maturity date of the 2016 Credit Agreement was November 8, 2021. For this section of this Form 10-Q, capitalized terms that are used but not otherwise defined shall have the meanings given to such terms in the 2016 Credit Agreement.

The 2016 Credit Agreement also provided for the issuance of letters of credit in an aggregate amount equal to the lesser of $5.0 million and the Revolving Credit Commitment, which was $30.0 million as of March 14, 2018. The 2016 Credit Agreement is guaranteed by all of the Company’s present subsidiaries and will be guaranteed by our future subsidiaries.

Until April 20, 2018, we have the option to elect one of two bases of interest rates. One interest rate option is the highest of (a) the Prime Rate, (b) the Federal Funds Rate plus 0.50% and (c) 30-day LIBOR plus 1.00%, plus, in each case, the Applicable Margin, which ranged from 1.50% to 2.50% per annum. The other interest rate option is the LIBOR plus the Applicable Margin, which ranged from 2.50% to 3.50% per annum. The Applicable Margin under each option is dependent upon our CTLAL at the most recent quarterly determination date.

The Term Loan amortized 7.0% per year (35.0% in 5 years) which includes the quarterly payment of principal. As of March 14, 2018, we have prepaid the required principal payments through March 30, 2019. On December 14, 2016, we entered into an interest rate swap with a notional amount of $17.5 million, representing 50% of the initial outstanding Term Loan.

We are obligated to pay to the Administrative Agent for the account of each lender a quarterly commitment fee based on the average daily unused amount of the commitment of such lender, ranged from 0.30% to 0.35% per annum depending on the CTLAL at the most recent quarterly determination date.

The proceeds of the 2016 Credit Agreement were available for us to (i) pay in full all indebtedness outstanding under the 2013 Credit Agreement as of November 8, 2016, (ii) pay fees, commissions, and expenses in connection with our repayment of the 2013 Credit Agreement, initial extensions of credit under the 2016 Credit Agreement, and (iii) for working capital and general corporate purposes of the Company.

The 2016 Credit Agreement, as amended, contained the following covenants among others:


•	CTLAL of not more than (i) 5.00 to 1.00, at the end of each fiscal quarter, through and including the third fiscal quarter of the Borrower’s fiscal year 2018, and (ii) 4.75 to 1.00 thereafter,


•	Consolidated Fixed Charge Coverage Ratio of not less than 1.25 to 1.00, at the end of each fiscal quarter,


•	Limit on Growth Capital Expenditures so long as the CTLAL is at least 0.25x less than the then-applicable permitted maximum CTLAL,


•	restrictions on mergers, acquisitions, consolidations, and asset sales,


•	restrictions on the payment of dividends, redemption of stock, and other distributions,


•	restrictions on incurring indebtedness, including certain guarantees, and capital lease obligations,


•	restrictions on incurring liens on certain of our property and the property of our subsidiaries,


•	restrictions on transactions with affiliates and materially changing our business,


•	restrictions on making certain investments, loans, advances, and guarantees,


•	restrictions on selling assets outside the ordinary course of business,


•	prohibitions on entering into sale and leaseback transactions, and


•	restrictions on certain acquisitions of all or a substantial portion of the assets, property and/or equity interests of any person, including share repurchases and dividends.

The 2016 Credit Agreement is secured by an all asset lien on all of the Company's real property and also includes customary events of default. If a default occurs and is continuing, the lenders’ commitments under the 2016 Credit Agreement may be immediately terminated, and, or the Company may be required to repay all amounts outstanding under the 2016 Credit Agreement.

As of March 14, 2018, the Company had $38.2 million in total outstanding loans and approximately $1.3 million committed under letters of credit, which it uses as security for the payment of insurance obligations, and approximately $0.2 million in other indebtedness.