Debt

3 Months Ended

May 04, 2025

Debt Disclosure [Abstract]

Debt

Debt

Revolving Credit Facility

In August 2020, we entered into a Credit Agreement with a consortium of financial institutions and lenders that provides for a five-year, senior secured revolving credit facility of $300.0 million (Existing Credit Facility). Proceeds from the Existing Credit Facility may be used for general corporate purposes and working capital. The Existing Credit Facility expires, absent default or termination by us, on August 24, 2025.

The annual interest rates applicable to loans under the Existing Credit Facility are, at our option, equal to either a base rate plus a margin ranging from 0.50% to 1.25% or term Secured Overnight Financing Rate (SOFR) (based on one, three or six-month interest periods), subject to a floor of 0%, plus a margin ranging from 1.50% to 2.25%. Interest on revolving loans is payable quarterly in arrears with respect to loans based on the base rate and at the end of an interest period in the case of loans based on term SOFR (or at each three-month interval if the interest period is longer than three months). We are also required to pay a commitment fee on the unused portion of the commitments ranging from 0.25% to 0.40% per annum, payable quarterly in arrears.

We had $100.0 million outstanding under the Existing Credit Facility at the end of the first quarter of fiscal 2026. The outstanding borrowing bore weighted-average interest at an annual rate of approximately 6.83% and 5.82% during the first quarter of fiscal 2025 and 2026 based on a one-month term SOFR period. Interest expense was not material for the first quarter of fiscal 2025 and 2026.

Borrowings under the Existing Credit Facility are collateralized by substantially all of our assets and subject to certain restrictions and two financial ratios measured as of the last day of each fiscal quarter: a consolidated leverage ratio not to exceed 4.5:1 and an interest coverage ratio not to be less than 3:1. We were in compliance with all covenants under the Existing Credit Facility at the end of the first quarter of fiscal 2026.