Debt

12 Months Ended

Jan. 29, 2022

Debt Disclosure [Abstract]

Debt

DEBT:On October 30, 2020, the Company and certain material domestic subsidiaries entered into Amendment No. 1 (the “Amendment”) to its credit agreement (as amended, the “Credit Agreement”), dated as of August 2, 2018, by and among the Company, certain material domestic subsidiaries as co-borrowers and guarantors, Wells Fargo Bank, National Association (“Wells Fargo Bank”), as Agent, letter of credit issuer and swing line lender, and certain lenders party thereto. Our obligations under the Credit Agreement are guaranteed by the guarantors and secured by a first priority lien on certain assets of the Company and certain material domestic subsidiaries, including inventory, accounts receivable, cash deposits, certain insurance proceeds, real estate, fixtures and certain intellectual property. The Credit Agreement provides for a five-year asset-based senior secured revolving loan (“ABL”) and letter of credit facility of up to $285.0 million, maturing October 30, 2025. The interest rate applicable to the ABL is equal to 2.25% (subject to increase to 2.50% based upon average quarterly excess availability under the ABL), with a LIBOR floor of 75 basis points. The Credit Agreement also provides for a $15.0 million first-in last-out

loan (“FILO”). The interest rate applicable to the FILO is equal to, at the Company's option, either a base rate, determined by reference to the federal funds rate, or a LIBOR with a floor of 75 basis points, plus in each case an interest rate margin of 4.5%. The Company expects borrowings to be at a LIBOR, plus an interest rate margin 4.5%. The FILO includes a prepayment penalty equal to 1.0% in the first year, 0.5% in the second year and none thereafter. The FILO can only be prepaid if there are no outstanding borrowings under the ABL. In addition, the Company will pay a commitment fee per annum on the unused portion of the commitments under the Credit Agreement.

The Credit Agreement contains customary representations, warranties, and affirmative covenants, as well as customary negative covenants, that, among other things restrict, subject to certain exceptions, the ability of the Company and certain of its domestic subsidiaries to: (i) incur liens, (ii) make investments, (iii) issue or incur additional indebtedness, (iv) undergo significant corporate changes, including mergers and acquisitions, (v) make dispositions, (vi) make restricted payments, (vii) prepay other indebtedness and (viii) enter into certain other restrictive agreements. The Company may pay cash dividends and repurchase shares under its share buyback program, subject to certain thresholds of available borrowings based upon the lesser of the aggregate amount of commitments under the Credit Agreement and the borrowing base, determined after giving effect to any such transaction or payment, on a pro forma basis.

As of January 29, 2022, our outstanding debt consisted of $99.0 million in net borrowings under the Credit Agreement. Availability under the Credit Agreement is determined based upon a monthly borrowing base calculation which includes eligible credit card receivables, real estate and inventory, less outstanding borrowings, letters of credit and certain designated reserves. As of January 29, 2022, the available additional borrowing capacity under the Credit Agreement was approximately $167.3 million, inclusive of $29.3 million of excess availability. The $99.0 million in net borrowings includes a $106.5 million draw on our facility on March 18, 2020 in response to store closures due to the pandemic, partially offset by a $50.0 million payment made in fiscal 2021. As of January 29, 2022, deferred financing costs of $3.5 million was outstanding related to the Credit Agreement, and is presented in other current assets in the accompanying consolidated balance sheets.

On February 2, 2022, the Company entered into Amendment No. 2 to its Credit Agreement, dated as of August 2, 2018, which extended the maturity of the Credit Agreement from October 30, 2025 to February 2, 2027; removes and replaces LIBOR benchmark provisions with Term SOFR benchmark provisions; decreases the margin on Term SOFR rate loans drawn under the Credit Agreement; and amends certain restrictive covenants under the Credit Agreement. Information regarding Amendment No. 2 as discussed further in Note 20.

The following table provides details on our debt outstanding as of January 29, 2022 and January 30, 2021:

	January 29, 2022		January 30, 2021
Credit Agreement	$	99,000	$	149,000

    There are no debt payments due through fiscal year 2024 and $99.0 million is due in fiscal 2025.