NOTE 9 - LONG-TERM DEBT

12 Months Ended

Feb. 01, 2015

NOTE 9 – LONG-TERM DEBT

Our loan agreement with Bank of America, N.A., which is scheduled to expire on July 31, 2018, includes the following terms:

§	A $15.0 million unsecured revolving credit facility, up to $3.0 million of which can be used to support letters of credit;

§	A floating interest rate, adjusted monthly, based on USD LIBOR, plus an applicable margin based on the ratio of our funded debt to our EBITDA (each as defined in the agreement);

§	A quarterly unused commitment fee of 0.20%; and

§	No pre-payment penalty.

The Company can permanently terminate or reduce the $15 million revolving commitment under the loan agreement without penalty. The loan agreement also includes customary representations and warranties and requires us to comply with customary covenants, including, among other things, the following financial covenants:

§	Maintain a tangible net worth of at least $95.0 million;

§	Limit capital expenditures to no more than $15.0 million during any fiscal year; and

§	Maintain a ratio of funded debt to EBITDA not exceeding 2.0:1.0.

We were in compliance with each of these financial covenants at February 1, 2015 and expect to remain in compliance with existing covenants through fiscal 2016 and for the foreseeable future. The loan agreement does not restrict our ability to pay cash dividends on, or repurchase our common shares, subject to complying with the financial covenants under the agreement.

As of February 1, 2015, we had an aggregate $13.5 million available under our revolving credit facility to fund working capital needs. Standby letters of credit in the aggregate amount of $1.5 million, used to collateralize certain insurance arrangements and for imported product purchases, were outstanding under the revolving credit facility as of February 1, 2015. There were no additional borrowings outstanding under the revolving credit facility on February 1, 2015.