Note 5 - Debt

3 Months Ended

Dec. 26, 2021

Notes to Financial Statements

Debt Disclosure [Text Block]

5 DEBT

The Company has debt consisting of a single 25-year term loan with BH Finance LLC (“BH Finance”), in an aggregate principal balance of $462,554,000 at a 9% annual rate and matures on March 16, 2045 (referred to herein as “Credit Agreement” and “Term Loan”). At  December 26, 2021, based on market quotations, the fair value approximates carrying value. This represents a level 2 fair value measurement.

During the quarter ended December 26, 2021, we made principal debt payments of $20,062,000. For the quarter, payments consisted of $10,450,000 from the sale of non-core assets, $6,112,000 from September 26, 2021 excess cash flow, and $3,500,000 in voluntary prepayments. All payments were made at par. Future payments are contingent on the Company's ability to generate future excess cash flow, as defined in the Credit Agreement. As of December 26, 2021 there was no excess cash flow payment due (as such term is defined in the Term Loan).

Warrants

We entered into a Warrant Agreement dated as of March 31, 2014 (the “Warrant Agreement”). Under the Warrant Agreement, certain warrant holders received warrants to purchase, in cash, an initial aggregate of 600,000 shares of Common Stock, subject to adjustment pursuant to anti-dilution provisions (the “Warrants”). The Warrants can be exercised at a price of $41.90 per share and expire in March 31, 2022.

The Warrant Agreement contains provisions requiring the Warrants to be measured at fair value and included in warrants and other liabilities in our Consolidated Balance Sheets. The initial fair value of the Warrants was $16,930,000. We re-measure the fair value of the liability each reporting period using the Black-Scholes option pricing model. The change in value of $1,929,000 is reported as expense in other, net non-operating income (expense).

The fair value of Warrants at December 26, 2021,  and  September 26, 2021 , were $2,000,000  and $71,000 , respectively.

In connection with the issuance of the Warrants, we entered into a Registration Rights Agreement dated as of March 31, 2014 (the “Registration Rights Agreement”). The Registration Rights Agreement requires, among other matters, that we use our commercially reasonable efforts to maintain the effectiveness for certain specified periods of a shelf registration statement related to the shares of Common Stock to be issued upon exercise of the Warrants.