Note 9 - Line of Credit

3 Months Ended

Apr. 01, 2017

Notes to Financial Statements

Debt Disclosure [Text Block]

9. Line of Credit

The Company and its subsidiaries are party to a loan agreement with Citizens Bank of Pennsylvania which provides for a

$35

million revolving credit facility and includes a sub-limit of

$5

million for letters of credit (the “Revolving Credit Facility”) and expires

December

11,

2019

.

  The Revolving Credit Facility has been amended several times, most recently pursuant to the Seventh Amendment entered into on

March

8,

2017

when the Company was granted a waiver that expressly excludes

$1.3

million of certain legal settlement and office closure expenses in the calculation of the Company’s loan covenants. Borrowings under the Revolving Credit Facility bear interest at

one

of

two

alternative rates, as selected by the Company at each incremental borrowing.  These alternatives are: (i) LIBOR (London Interbank Offered Rate), plus applicable margin, typically borrowed in fixed

30

-day increments or (ii) the agent bank’s prime rate generally borrowed over shorter durations.  The Company also pays unused line fees based on the amount of the Revolving Credit Facility that is not drawn.  Unused line fees are recorded as interest expense.  The effective interest rate, including unused line fees, for the fiscal quarter ended

April

1,

2017

was

2.4%.

All borrowings under the Revolving Credit Facility are collateralized by all of the assets of the Company and its subsidiaries and a pledge of the stock of its subsidiaries.  The Revolving Credit Facility also contains various financial and non-financial covenants, such as a covenant that restricts on the Company’s ability to borrow in order to pay dividends.  As of

April

1,

2017,

the Company was in compliance with all covenants contained in its Revolving Credit Facility.

Borrowings under the line of credit as of

April

1,

2017

and

December

31,

2016

were

$12.7

million and

$14.3

million, respectively. At

April

1,

2017

and

December

31,

2016

there were letters of credit outstanding for

$0.8

million. At

April

1,

2017,

the Company had availability for additional borrowings under the Revolving Credit Facility of

$21.5

million.