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Notes to Consolidated
Financial Statements
NOTE 5 - LINE OF CREDIT:
Under the terms of a revolving line of credit with Bank of America,
the Company may borrow up to $2,000 through April 30, 2003. At any time
prior to May 2002, the Company may convert borrowings, if any, into
a three-year term loan with principal and interest payable monthly commencing
May 31, 2002. The interest rate is at the bank’s reference rate
unless the Company elects an optional interest rate. The borrowing agreement
contains various covenants, the more significant of which require the
Company to maintain certain levels of shareholders’ equity and
working capital. The Company was in compliance with all provisions of
the agreement during the year. There were no borrowings under this line
of credit during the year.
NOTE 6 - CONTINGENCIES
AND COMMITMENTS:
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make certain estimates
and assumptions that affect the reported amounts of assets and liabilities
and disclosure of contingent assets and liabilities at the date of the
financial statements and the reported revenues and expenses during the
respective reporting periods. Actual results could differ from those
estimates.
The Company leases certain transportation equipment under an operating
lease expiring in 2006. The terms of the lease provide for annual renewal
options and contingent rental payments based upon mileage and adjustments
of rental payments based on the Consumer Price Index. Minimum rental
payments were $340 in fiscal year 2001 and were $320 in fiscal years
2000 and 1999. Contingent payments were $110 in fiscal years 2001 and
2000 and $102 in fiscal year 1999. Future minimum lease payments are
approximately $340 in the years 2002 through 2004 and $270 in 2005 and
$20 in 2006.
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