Note 4 - Debt and Capital Leases |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||
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Jan. 01, 2017 | ||||||||||||||||||||||||||||||||||||||||||||||||
| Notes to Financial Statements | ||||||||||||||||||||||||||||||||||||||||||||||||
| Debt Disclosure [Text Block] |
(a) Revolving credit and long-term debt facilities The Company borrows money under a Revolving Credit and Security Agreement with PNC Bank, National Association (“PNC”) which governs the PNC Revolving Credit Facility and the PNC Long-Term Debt Facility (collectively the “PNC Facilities”). In November 2016, the Company entered into the eleventh amendment to the PNC Facilities with PNC, which extends the term of the PNC Facilities to January 2, 2021. Advances made under the PNC Revolving Credit Facility bear interest at the U.S. base rate plus 0.25%. The applicable interest rate for the Long-Term Debt Facility is U.S. base rate plus 0.75%. The base commercial lending rate should approximate prime rate. The maximum amount of funds available under the PNC Revolving Credit Facility is $30,000. Availability under the PNC Revolving Credit Facility is subject to certain conditions, including borrowing base conditions based on eligible inventory and accounts receivable, and certain conditions as determined by the lender. The Company is required to use a “lock-box” arrangement for the PNC Revolving Credit Facility, whereby remittances from customers are swept daily to reduce the borrowings under this facility. As at January 1, 2017 the funds available to borrow under the PNC Revolving Credit Facility after deducting the current borrowing base conditions was $7,377 (January 3, 2016 - $10,497).
The PNC Long-Term Debt Facility of $10,000 matures on January 2, 2021 with quarterly principal payments of $500 with the remaining balance due at maturity. At January 1, 2017, $2,731 (January 3, 2016 - $10,721) was outstanding under the PNC Revolving Credit Facility and is classified as a current liability based on the requirement to hold a “lock-box” under the terms of the PNC Revolving Credit Facility.At January 1, 2017, $10,000 (January 3, 2016 – $5,000) was outstanding under the PNC Long-Term Debt Facility. The PNC Facilities are a joint and several obligations of the Company and its subsidiaries that are borrowers under the facilities and are jointly and severally guaranteed by other subsidiaries of the Company. Repayment under the PNC Facilities is collateralized by the assets of the Company and each of its subsidiaries. (b) Covenants The PNC Facilities agreement contains certain financial and non-financial covenants. The financial covenants require the Company to maintain minimum consolidated fixed charge coverage ratio and limit unfunded capital expenditures (all as defined in the credit agreement governing the PNC Facilities). The financial covenant relating to a minimum consolidated fixed charge coverage ratio is in effect for the twelve months ended January 1, 2017 and thereafter on a rolling twelve month basis until January 2, 2021.
The Company is in compliance with the financial covenants included in the PNC Facilities as of January 1, 2017.
(c) Obligations under capital leases Minimum lease payments for capital leases due within each of the next three years and thereafter consist of the following:
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