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Note 9 - Line of Credit | 12 Months Ended
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Feb. 01, 2020
Notes to Financial Statements |
Long-term Debt [Text Block] |
( 9 ) | Line of Credit
As of February 1, 2020 , the Company had a bank line of credit that provides borrowing capacity of $20.0 million. Borrowings under the credit agreement are secured by its assets and a pledge of 66% of the Company’s ownership interest in certain of its foreign subsidiaries. The credit agreement expires on December 31, 2020 and contains various restrictions on indebtedness, liens, guarantees, redemptions, mergers, acquisitions or sale of assets, loans, transactions with affiliates and investments. The agreement limits the conditions under which the Company may declare dividends and repurchase shares. For example, we may not use the proceeds of the line of credit to repurchase shares. The commitment fee is 0.25% per annum and borrowings bear interest at LIBOR plus 3.25%. Financial covenants included maintaining a minimum fixed charge coverage ratio and not exceeding a maximum funded debt to EBITDA ratio as of the end of the fourth quarter of fiscal 2019 (as defined in the credit agreement). The line of credit agreement also includes an anti-hoarding clause, which precludes borrowings that would cause our cash balance to exceed $5 million. In addition, the Company has a $1.0 million letter of credit against the line at the end of fiscal 2019. As of February 1, 2020 : (i) the Company was in compliance with all covenants and (ii) there were no borrowings under the line of credit. The Company has not borrowed on its credit facility as of April 13, 2020 and had approximate ly $23.8 million i n operating cash. Due to the impacts of COVID- 19 and the closure of our owned and operated stores, our financial performance in the first quarter of fiscal 2020 will be negatively impacted. As a result, it is likely that we will be unable to comply with certain covenants in our existing line of credit. The Company's liquidity may be negatively impacted if stores do not resume normal operations and the Company may be required to pursue additional sources of financing to meet its financial obligations. Obtaining such financing is not guaranteed and is largely dependent on market conditions and other factors. The Company believes that its current cash balance, along with the actions taken as outlined above, provides it with sufficient current liquidity. Future impact of COVID- 19 may require further actions by the Company to improve its cash position, including but not limited to, monetizing Company assets including the Company owned warehouse in Ohio, inventory, implementing further employee furloughs, and foregoing capital expenditures and other discretionary expenses.

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- Definition The entire disclosure for long-term debt. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -URI http://asc.fasb.org/topic&trid=2208564 + Details
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