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Revolving Line of Credit

6 Months Ended

Jul. 30, 2011

Revolving Line of Credit

Revolving Line of Credit

9. Revolving Line of Credit

The Company’s $20 million unsecured revolving credit facility with Bank of America has an expiration date of March 22, 2012. The facility has an unused commitment fee ranging from 0.25% to 0.50%, dependent on the Company’s consolidated leverage ratio. Loans under the facility bear interest at either (a) a rate equal to the highest of (i) the Federal Funds Rate plus 0.50%, (ii) LIBOR plus 1.0% and (iii) Bank of America’s prime rate, plus an applicable margin; or (b) a rate equal to LIBOR plus an applicable margin. The applicable margin is dependent on the consolidated leverage ratio and ranges from 0.75% to 1.75% for loans bearing interest at the rate described under (a) above and from 1.75% to 2.75% for loans bearing interest at the rate described under (b) above. Under the terms of the credit facility, the payment of cash dividends is prohibited, and there is one financial covenant (consolidated leverage ratio), which was modified to provide the Company additional flexibility in the second quarter of 2011. The Company has had no borrowings under this facility and was in compliance with the financial covenant ratio as of July 30, 2011.

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

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