Annual report pursuant to Section 13 and 15(d)

Note 3 - Financing Arrangements

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Note 3 - Financing Arrangements
12 Months Ended
Mar. 30, 2014
Debt Disclosure [Abstract]  
Debt Disclosure [Text Block]

Note 3 - Financing Arrangements


Factoring Agreements: The Company assigns the majority of its trade accounts receivable to CIT pursuant to factoring agreements, which have expiration dates that are coterminous with that of the financing agreement described above. Under the terms of the factoring agreements, CIT remits customer payments to the Company as such payments are received by CIT.


CIT bears credit losses with respect to assigned accounts receivable from approved shipments, while the Company bears the responsibility for adjustments from customers related to returns, allowances, claims and discounts. CIT may at any time terminate or limit its approval of shipments to a particular customer. If such a termination or limitation were to occur, the Company would either assume the credit risk for shipments to the customer after the date of such termination or limitation or cease shipments to the customer. Factoring fees, which are included in marketing and administrative expenses in the accompanying consolidated statements of income, were $461,000 and $455,000 during fiscal years 2014 and 2013, respectively. There were no advances on the factoring agreements at either March 30, 2014 or March 31, 2013.


Credit Facility: The Company’s credit facility at March 30, 2014 consisted of a revolving line of credit under a financing agreement with CIT of up to $26.0 million, which includes a $1.5 million sub-limit for letters of credit, bearing interest at the rate of prime minus 0.50% or LIBOR plus 2.00%. The financing agreement matures on July 11, 2016 and is secured by a first lien on all assets of the Company. At March 30, 2014, the Company had elected to pay interest on balances owed under the revolving line of credit, if any, under the LIBOR option. The financing agreement also provides for the payment by CIT to the Company of interest at the rate of prime minus 2.00%, which was 1.25% at March 30, 2014, on daily negative balances held at CIT.


Under the financing agreement, a monthly fee is assessed based on 0.125% of the average unused portion of the $26.0 million revolving line of credit, less any outstanding letters of credit (the “Commitment Fee”). The Commitment Fee amounted to $41,000 and $64,000 during fiscal years 2014 and 2013, respectively. At March 30, 2014, there was no balance owed on the revolving line of credit, there was no letter of credit outstanding and the Company had $24.7 million available under the revolving line of credit based on its eligible accounts receivable and inventory balances.


The financing agreement contains usual and customary covenants for agreements of that type, including limitations on other indebtedness, liens, transfers of assets, investments and acquisitions, merger or consolidation transactions, transactions with affiliates, and changes in or amendments to the organizational documents for the Company and its subsidiaries. The Company believes it was in compliance with these covenants as of March 30, 2014.