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Long-Term Debt and Available Credit
3 Months Ended
May 27, 2017
Debt Disclosure [Abstract]  
Long-Term Debt and Available Credit

NOTE 3 — LONG-TERM DEBT AND AVAILABLE CREDIT

Revolving Credit Facility — At the end of the first quarter of fiscal 2018, the Company had a $350,000,000 secured revolving credit facility with a $100,000,000 accordion feature (“Revolving Credit Facility”). Credit extensions under the Revolving Credit Facility were limited to the lesser of $350,000,000 or the amount of the calculated borrowing base, which was $326,962,000 as of May 27, 2017. The Company had no cash borrowings and $42,191,000 in letters of credit and bankers’ acceptances outstanding under the Revolving Credit Facility, with $284,771,000 remaining available for cash borrowings, all as of May 27, 2017.

On June 2, 2017, subsequent to quarter end, the Company entered into a Second Amended and Restated Credit Agreement which amended certain terms of the Revolving Credit Facility. The amended Revolving Credit Facility extends the maturity date from June 18, 2018 to June 2, 2022, and increases the amount of the accordion feature to $150,000,000. The amended Revolving Credit Facility continues to be secured primarily by the Company’s eligible merchandise inventory and third-party credit card receivables and certain related assets on a first priority basis and on a second lien basis by substantially all other assets of certain of the Company’s subsidiaries, subject to certain exceptions. As of June 2, 2017, the Company had no borrowings under the amended Revolving Credit Facility and approximately $42,191,000 in letters of credit and bankers’ acceptances outstanding.

Credit extensions under the amended Revolving Credit Facility are limited to the lesser of $350,000,000 or the amount of the calculated borrowing base. At the Company’s option, borrowings will bear interest at either (a) the adjusted LIBOR rate plus a spread varying from 125 to 150 basis points per annum, depending on the amount then borrowed under the amended Revolving Credit Facility, or (b) the prime rate plus a spread varying from 25 to 50 basis points per annum, depending on the amount then borrowed under the amended Revolving Credit Facility. Provided that there is no default and no default would occur as a result thereof, the Company may request that the amended Revolving Credit Facility be increased to an amount not to exceed $500,000,000. The amendment did not result in any other material changes to the Revolving Credit Facility.

Term Loan Facility — The Company has a senior secured term loan facility that matures on April 30, 2021 (“Term Loan Facility”). As of May 27, 2017, February 25, 2017 and May 28, 2016, the Company had $194,500,000, $195,000,000 and $196,500,000 outstanding, respectively, under the Term Loan Facility with carrying values of $191,378,000, $191,676,000 and $192,568,000, respectively, net of unamortized discounts and debt issuance costs.

 

The fair value of the amount outstanding under the Term Loan Facility was approximately $186,720,000 as of May 27, 2017, which was measured at fair value using the quoted market price. The fair value measurement is classified as Level 2 in the fair value hierarchy based on the frequency and volume of trading for which the price was readily available. Level 2 inputs include quoted prices in active markets for similar assets or liabilities; quoted prices for identical or similar assets or liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the asset or liability.