Debt

9 Months Ended

Oct. 29, 2022

Debt Disclosure [Abstract]

Debt

3. Debt

Credit Agreement with Citizens Bank, N.A.

On October 28, 2021, the Company entered into a credit facility with Citizens Bank, N.A. (the "Credit Facility”).

The Credit Facility is a $125.0 million secured, asset-based credit facility with a maturity date of October 28, 2026. The maximum committed borrowing of $125.0 million includes a sublimit of $20.0 million for commercial and standby letter of credits and a sublimit of up to $15.0 million for swing line loans. The Company’s ability to borrow under the Credit Facility is determined using an availability formula based on eligible assets.

Borrowings made pursuant to the Credit Facility will be made pursuant to either a Base Rate loan or LIBOR Rate loan, at the Company's option. Base Rate loans will bear interest at a rate equal to (i) the greater of: (a) the Prime Rate, (b) the Federal Funds effective rate plus 0.50% per annum and (c) the daily LIBOR rate plus 1.00% per annum, plus (ii) a varying percentage, based on the Company’s average excess availability, of either 0.25% or 0.50%. LIBOR Rate loans, which may be either for 1 month or 3 months, will bear interest at (i) the LIBOR rate, or the Benchmark Rate as defined in the credit agreement plus (ii) a varying percentage based on the Company’s average excess availability, of either 1.25% or 1.50%. Any swingline loan will bear interest at a rate equal to the rate of a Base Rate loan, plus a varying percentage based on the Company’s average excess availability, of either 0.25% or 0.50%. The Company will be subject to an unused line fee of 0.25%.

The Company’s obligations under the Credit Facility are secured by a lien on substantially all of its assets. If the Company’s availability under the Credit Facility at any time is less than the greater of (i) 10% of the Revolving Loan Cap (the lesser of the aggregate revolving commitments or the borrowing base) and (ii) $7.5 million, then the Company is required to maintain a minimum consolidated fixed charge coverage ratio of 1.0:1.0 until such time as availability has exceeded the greater of (1) 10% of the Revolving Loan Cap and (2) $7.5 million for 30 consecutive days.

At October 29, 2022, the Company had no borrowings outstanding under the Credit Facility and unused availability was $90.2 million. The Company had no borrowings during the first nine months of fiscal 2022, resulting in an average unused excess availability of approximately $82.0 million. Outstanding standby letters of credit were $3.8 million and outstanding documentary letters were $1.0 million at October 29, 2022. At October 29, 2022, the Company’s prime-based interest rate was 6.50%.

Borrowings and repayments for the first nine months ended October 30, 2021 were as follows:

	For the nine months ended
(in thousands)		October 30, 2021
Borrowings		$	40,297
Repayments			(100,030	)
Net borrowings (repayments)		$	(59,733	)

Long-Term Debt

The Company had no outstanding long-term debt during the first nine months of fiscal 2022.

During the first quarter of fiscal 2021, the Company refinanced its then existing $15.0 million FILO (first-in, last-out) loan and entered into a new $17.5 million FILO loan, which was subsequently repaid in full in September 2021.

The Company paid interest and fees totaling $0.3 million and $3.1 million for the nine months ended October 29, 2022 and October 30, 2021, respectively. Included in the $3.1 million of interest and fees paid in fiscal 2021 was a prepayment fee of $1.1 million associated with the prepayment of the Company $17.5 million FILO loan. In connection with the execution of the Credit Facility and prepayment of the FILO loan, in the third quarter of fiscal 2021, the Company also wrote-off a total of $0.8 million in unamortized debt issuance costs.