Debt

Credit Agreement with Bank of America, N.A.

On June 26, 2013, the Company amended its credit facility with Bank of America, N.A by executing the First Amendment to the Sixth Amended and Restated Loan and Security Agreement (as amended, the “Credit Facility”).

The Credit Facility provides for a maximum committed borrowing of $100 million, which, pursuant to an accordion feature, may be increased to $150 million upon the request of the Company and the agreement of the lender(s) participating in the increase. The Credit Facility includes a sublimit of $20 million for commercial and standby letter of credits or the sublimit of up to $15 million for swingline loans. The Company’s ability to borrow under the Credit Facility is determined using an availability formula based on eligible assets. The maturity date of the Credit Facility is June 26, 2018. The Company’s obligations under the Credit Facility are secured by a lien on all of its assets.

Borrowings made pursuant to the Credit Facility will bear interest at a rate equal to the base rate (determined as the highest of (a) Bank of America N.A.’s prime rate, (b) the Federal Funds rate plus 0.50% or (c) the annual LIBOR rate for the respective interest period) plus a varying percentage, based on the Company’s borrowing base, of 0.50%-0.75% for prime-based borrowings and 1.50%-1.75% for LIBOR-based borrowings. The Company is also subject to an unused line fee of 0.25%. At August 2, 2014, the Company’s prime-based interest rate was 3.75%. At August 2, 2014, the Company had approximately $20.0 million of its outstanding borrowings in a LIBOR-based contract with an interest rate of 1.65%. The LIBOR-based contracts expired August 7, 2014 through August 10, 2014. When a LIBOR-based borrowing expires, the borrowings revert back to prime-based borrowings unless the Company enters into a new LIBOR-based borrowing arrangement.

At August 2, 2014, the Company had outstanding borrowings under the Credit Facility of $25.7 million. Outstanding standby letters of credit were $2.2 million and documentary letters of credit were $1.1 million. Unused excess availability at August 2, 2014 was $71.0 million. Average monthly borrowings outstanding under the Credit Facility during the first six months of fiscal 2014 were $28.3 million, resulting in an average unused excess availability of approximately $65.2 million. The Company’s ability to borrow under the Credit Facility is determined using an availability formula based on eligible assets, with increased advance rates based on seasonality.

The fair value of the amount outstanding under the Credit Facility at August 2, 2014 approximated the carrying value.

Long-Term Debt

Components of long-term debt are as follows:


(in thousands)	August 2, 2014		February 1, 2014
Total long-term debt	$	22,611	$	16,706
Less: current portion of long-term debt		6,457		4,561

Long-term debt, net of current portion	$	16,154	$	12,145

Pursuant to a Master Loan and Security Agreement with Banc of America Leasing & Capital, LLC, dated July 20, 2007 and amended September 30, 2013 (the “Master Agreement”), the Company has entered into twelve equipment security notes (in aggregate, the “Notes”). The Company has borrowed an aggregate of $26.4 million between September 2013 and June 2014, of which $8.9 million was borrowed during the first six months of fiscal 2014. The Notes are for a term of 48 months and accrue interest at fixed rates ranging from 3.07% and 3.50%. Principal and interest are paid monthly, in arrears.

The Notes are secured by a security interest in all of the Company’s rights, title and interest in and to certain equipment. The Company is subject to a prepayment penalty equal to 1% of the prepaid principal of the Notes until the first anniversary, 0.5% of the prepaid principal from the first anniversary until the second anniversary and no prepayment penalty thereafter. The Master Agreement includes default provisions that are customary for financings of this type and are similar and no more restrictive than the Company’s existing Credit Facility.