Revolving Line of Credit and Lease Line

12 Months Ended

Dec. 27, 2014

Debt Disclosure [Abstract]

Revolving Line of Credit and Lease Line

(7) Revolving Line of Credit and Lease Line

In early May 2014, the Company renewed its $2 million revolving line of credit (“LOC”) and $500 thousand of an equipment finance facility (“Lease Line”) with Santander Bank.  Both agreements mature in May 2015.  The LOC is secured by the accounts receivable and other assets of the Company, has an interest rate of prime plus one-half of one percent (.05%) and a one-year term.  The LOC and the Lease Line are cross defaulted and cross collateralized. The Company is also subject to certain financial covenants within the terms of the line of credit that require the Company to maintain a targeted coverage ratio as well as targeted debt to equity and current ratios. At December 27, 2014, the Company was in compliance with existing covenants. 

At December 27, 2014, the Company had no borrowing under its lease line.  In addition at December 28, 2013 the Company had no borrowings under this LOC while its borrowing base at the time would have permitted borrowings of $2 million.

The covenants with Santander Bank are identical for the line of credit and equipment financing facility. The covenant requirements are shown below together with the actual ratios achieved at the end of 2014:

Covenant	Requirement	Actual
Debt Service Coverage Ratio	Minimum of $1.25	17
Current Ratio	Minimum of 1.5X	3.9
Liabilities to Tangible Net Worth	Maximum of 1.0X	0.2
Borrowings under the lease line	Maximum of $500K	None
Borrowings under the line of credit	Maximum of $2.000K	None
	*(based on receivables at 12/27/2014)