v3.26.1
Credit Facility
 12 Months Ended
May 30, 2026
Credit Facility [Abstract]  
Credit Facility
Note 10
- Credit Facility
For
fiscal
years
2026,
2025
and
2024,
interest
expense
was
$
556
thousand,
$
612
thousand
and
$
549
thousand,
respectively,
primarily
related
to commitment
fees on
the Credit Facility described
below.
On November 15, 2021,
we entered into an Amended
and Restated
Credit Agreement (as amended,
the “Credit Agreement”) with
a
five-year
term, expiring
November
15, 2026. The
Credit Agreement
provides
for
a
senior secured
revolving
credit facility
(the
“Credit
Facility”
or “Revolver”)
in
an
initial
aggregate
principal
amount
of up
to
$
250
million,
which
includes
a $
15
million
sublimit
for
the
issuance
of standby
letters
of
credit
and
a $
15
million
sublimit
for
swingline
loans.
The
Credit
Facility
also
includes
an accordion
feature
permitting,
with the
consent of
BMO Harris
Bank N.A.
(the “Administrative
Agent”),
an increase
in
the
Credit
Facility
in
the
aggregate
up
to
$
200
million
by
adding
one
or
more
incremental
senior
secured
term
loans
or
increasing
one
or
more
times
the
revolving
commitments
under
the
Revolver.
No
amounts
were
borrowed
under
the
Credit
Facility as of
May 30,
2026 or May
31, 2025 or during
fiscal 2026
or fiscal
2025. The Company
had $
5.9
million of outstanding
standby
letters of credit issued under
the Credit Facility
at
May
30, 2026
.
On May
26,
2023, we
entered
into the
First Amendment
(the “First
Amendment”)
to the
Credit
Agreement,
which replaced
the
London Interbank
Offered Rate
interest rate benchmark
with the secured overnight
financing rate
as administered
by the Federa
l
Reserve
Bank of
New York
or a
successor
administrator
of the
secured overnight
financing
rate (“SOFR”).
The
interest
rate in
connection
with loans
made
under the
Credit Facility
is based
on, at
the Company’s
election,
either the
Adjusted
Term
SOFR
Rate plus
the Applicable
Margin
or the Base
Rate plus the
Applicable
Margin.
The
“Adjusted Term
SOFR”
means
with respect
to any
tenor, the
per annum
rate equal
to the
sum of
(i)
Term
SOFR as defined
in the Credit Agreement
plus (ii)
0.10
% (10 basis
points);
provided, if
Adjusted
Term
SOFR determined
as provided
above
shall ever
be less
than
the Floor,
then
Adjusted Term
SOFR shall
be deemed to be the Floor.
The “Floor” means
the rate per annum
of interest equal to
0.00
%. The “Base
Rate” means
a fluctuating
rate per
annum
equal to the highest of (a)
the federal funds
rate plus
0.50
% per annum,
(b) the prime rate of interest
established
by the
Administrative
Agent, and
(c) the
Adjusted
Term
SOFR for
a
one
-month tenor
plus
1.00
%. The
“Applicable
Margin”
means
0.00
% to
0.75
% per annum
for Base Rate
Loans and
1.00
% to
1.75
% per annum
for SOFR
Loans, in
each case
depending
upon the
Total Funded
Debt
to Capitalization
Ratio for the Company
at the quarterly pricing date.
The Company
will
pay a commitment
fee on the unused portion of the Credit
Facility payable
quarterly from
0.15
% to
0.25
%, in
each case depending
upon
the Total
Funded
Debt to Capitalization
Ratio
for the
Company
at
the quarterly
pricing date.
On
March
25, 2025,
the Company
entered
into the
Second
Amendment
(the “Second
Amendment”)
to
the
Credit Agreement.
Under
the
Credit Agreement,
a
Change
of
Control
is an
event
of default.
The
Second
Amendment
amended
the definition
of
Change
of
Control
to exclude
from
that
definition the
conversion
(the
“Class
A
Conversion”)
of
all outstanding
shares
of the
Company’s
Class A Common
Stock into
Common
Stock which occurred
on April 14, 2025.
The Credit Facility is guaranteed
by substantially all the current and future
wholly-owned direct
and indirect domestic
subsidiaries
of
the
Company
(the
“Guarantors”),
and
is
secured
by
a
first-priority
perfected
security
interest
in
substantially
all
of
the
Company’s
and the Guarantors’ accounts, payment
intangibles, instruments (including promissory notes),
chattel paper,
inventory
(including farm
products)
and
deposit accounts
maintained
with the Administrative
Agent.
The
Credit Agreement
contains
customary
covenants,
including restrictions
on the
incurrence
of liens,
incurrence
of additiona
l
debt, sales
of assets
and
other fundamental
corporate
changes and
investments.
The Credit Agreement
requires
maintenance
of
two financial
covenants:
(i) a maximum
Total Funded
Debt
to Capitalization
Ratio tested
quarterly of
no greater
than
50
%; and
(ii) a requirement
to maintain
Minimum Tangible
Net Worth
at all times
of $
700
Million
plus
50
% of net income (if
net income
is
positive)
less
permitted
restricted
payments
for
each
fiscal
quarter
after
November
27,
2021.
The
Credit
Agreement
also
includes
customary
events of default
and customary
remedies upon the
occurrence
of an event
of default, including
acceleration
of the
amounts
due under
the Credit Facility and
foreclosure of
the collateral
securing the Credit Faci
lity.
Further,
under the
terms
of the
Credit
Agreement,
payment
of dividends
under the
Company
’s current dividend
policy of
one-
third of the
Company
’s net income,
computed
in accordance
with
GAAP,
and payment
of other dividends or
repurchases
by the
Company
of its capital
stock is allowed,
as long
as after
giving effect
to such
dividend
payments
or repurchases
no default
has
occurred and
is continuing
and the sum
of cash
and cash
equivalents
of the Company
and its subsidiaries
plus availability
under
the Credit Facility
equals
at
least $
50
million.
At May
30, 2026,
we were in compliance
with the covenant
requirements
of the
Credit Agreement.