Subsequent Event Subsequent Event

3 Months Ended

Apr. 01, 2017

Subsequent Events [Abstract]

Subsequent Event

SUBSEQUENT EVENT

On April 10, 2017, we and certain of our subsidiaries, along with the lenders that are signatories thereto and Wells Fargo Bank, National Association, as agent for the lenders, entered into a joinder and second amendment to our amended and restated loan and security agreement, to among other things: extend the maturity of the agreement to April 10, 2022; reduce the maximum availability borrowing capacity from $120.0 million to $60.0 million; reduce the interest rates applicable to borrowings under our amended and restated loan and security agreement; allow for payment of dividends of up to $15.0 million in any consecutive 12-month period, including the dividend declared on March 23, 2017; reduce the fee that we must pay on undrawn availability; and release West Marine Canada Corp., a Nova Scotia unlimited liability company and wholly-owned subsidiary of the Company, from its obligations under the Loan Agreement due to the winding down of Canadian operations, In addition, at our option and subject to certain conditions, we may increase our borrowing capacity up to an additional $12.5 million. The amount available to be borrowed is based on a percentage of certain of our inventory (excluding capitalized indirect costs) and accounts receivable. This loan agreement amends and supersedes our previous loan and security agreement that would have expired on November 30, 2017.

The revolving credit facility is guaranteed by West Marine, Inc. and West Marine Insurance, Inc. (a Vermont corporation and wholly-owned subsidiary of the Company) and secured by a security interest in all of our accounts receivable and inventory, certain other related assets, and all proceeds thereof. The revolving credit facility is available for general working capital and general corporate purposes.