Annual report pursuant to Section 13 and 15(d)

Interest Rate Swap

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Interest Rate Swap
 12 Months Ended
Dec. 29, 2012
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Interest Rate Swap
Interest Rate Swap
As discussed in Note 3, in conjunction with the term loan obtained in August to mitigate the variability of the interest rate risk, the Company entered into an interest rate swap contract on August 21, 2012 with its current bank. The interest rate swap has a notional amount of $22,500,000 with a fixed interest rate of 3.74 percent, and a term of 10 years that expires on August 21, 2022. The notional amount of the interest rate swap decreases as monthly principal payments are made. Although the swap is expected to effectively offset variable interest in the borrowing, hedge accounting will not be utilized. Therefore, changes in its fair value are recorded in current assets or liabilities, as appropriate, with corresponding offsetting entries to other expense. As of December 29, 2012, the Company recorded a liability of $450,000 for the fair value of the interest rate swap.