NOTE 9 - LONG-TERM DEBT

12 Months Ended

Jan. 31, 2016

NOTE 9 – LONG-TERM DEBT

Subsequent to the end of our 2016 fiscal year, we completed the acquisition of substantially all of the assets of Home Meridian International, Inc. and entered into an amended and restated loan agreement with Bank of America. See Item 7 and note 18 to our consolidated financial statements for additional information.

Our loan agreement with Bank of America, N.A. as of January 31, 2016, which was scheduled to expire on July 31, 2018, included the following terms:

A $15.0 million unsecured revolving credit facility, up to $3.0 million of which could have been 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 could have permanently terminated or reduced the $15 million revolving commitment under the loan agreement without penalty. The loan agreement also included customary representations and warranties and required 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 January 31, 2016 and, as of that date, expect to remain in compliance with existing covenants through fiscal 2017 and for the foreseeable future. The loan agreement did 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 January 31, 2016, we had an aggregate $13.3 million available under our revolving credit facility to fund working capital needs. Standby letters of credit in the aggregate amount of $1.7 million, used to collateralize certain insurance arrangements and for imported product purchases, were outstanding under the revolving credit facility as of January 31, 2016. There were no additional borrowings outstanding under the revolving credit facility on January 31, 2016.