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Long-Term Debt
 6 Months Ended
Aug. 31, 2025
Debt Disclosure [Abstract]  
Long-Term Debt
Note 10 - Long-Term Debt

A summary of our long-term debt follows:
(in thousands)August 31, 2025February 28, 2025
Credit Agreement (1):
Revolving loans$411,900 $678,100 
Term loans486,719 243,750 
Total borrowings under Credit Agreement898,619 921,850 
Unamortized prepaid financing fees(5,399)(4,956)
Total long-term debt893,220 916,894 
Less: current maturities of long-term debt(21,875)(9,375)
Long-term debt, excluding current maturities$871,345 $907,519 
(1)The weighted average interest rates on borrowings outstanding under the Credit Agreement (defined below) inclusive of the impact of our interest rate swaps as of August 31, 2025 and February 28, 2025 were 5.9% and 5.6%, respectively.

Credit Agreement

We have a credit agreement (the “Credit Agreement”) with Bank of America, N.A., as administrative agent, and other lenders that provides for aggregate commitments of $1.5 billion, which are available through (i) a $1.0 billion revolving credit facility, which includes a $50 million sublimit for the issuance of letters of credit, (ii) a $250 million term loan facility, and (iii) a committed $250 million delayed draw term loan facility, which permitted multiple drawdowns until August 15, 2025. Proceeds can be used for working capital and other general corporate purposes, including funding permitted acquisitions. At the closing date, February 15, 2024, we borrowed $457.5 million under the revolving credit facility and $250.0 million under the term loan facility and utilized the proceeds to repay all debt outstanding under our prior credit agreement. During the first quarter of fiscal 2026, we borrowed $250.0 million under the delayed draw term loan facility and utilized the proceeds to repay debt outstanding under the revolving credit facility. During the first quarter of fiscal 2026, we capitalized $0.4 million of lender fees and a de minimis amount of third-party fees incurred in connection with the delayed draw term loan facility borrowing, which were recorded as prepaid financing fees in long-term debt. The Credit Agreement matures on February 15, 2029. The Credit Agreement includes an accordion feature, which permits the Company to request to increase its borrowing capacity by an additional $300 million plus an unlimited amount when the Leverage Ratio (as defined in the Credit Agreement) on a pro-forma basis is less than 3.25 to 1.00. The term loans are payable at the end of each fiscal quarter in equal installments of 0.625% through February 28, 2025, 0.9375% through February 28, 2026, and 1.25% thereafter of the original principal balance of the term loans, which began in the first quarter of fiscal 2025 for the term loan facility and began in the second quarter of fiscal 2026 for the delayed draw term loan facility, with the remaining balance due at the maturity date. Borrowings under the Credit Agreement bear floating interest at either the Base Rate or Term SOFR (as defined in the Credit Agreement), plus a margin based on the Net
Leverage Ratio (as defined in the Credit Agreement) of 0% to 1.125% and 1.0% to 2.125% for Base Rate and Term SOFR borrowings, respectively.

The floating interest rates on our borrowings under the Credit Agreement are hedged with interest rate swaps to effectively fix interest rates on $625 million and $550 million of the outstanding principal balance under the Credit Agreement as of August 31, 2025 and February 28, 2025, respectively. See Notes 11, 12, and 13 for additional information regarding our interest rate swaps.

In connection with the acquisition of Olive & June, we provided notice of a qualified acquisition and borrowed $235.0 million under our Credit Agreement to fund the acquisition initial cash consideration. The exercise of the qualified acquisition notice triggered temporary adjustments to the maximum leverage ratio, which was 3.50 to 1.00 before the impact of the qualified acquisition notice. As a result of the qualified acquisition notice, commencing at the beginning of our fourth quarter of fiscal 2025, the maximum leverage ratio is 4.50 to 1.00 through November 30, 2025 and 3.50 to 1.00 thereafter. For additional information on the acquisition, see Note 4.

As of August 31, 2025, the balance of outstanding letters of credit was $9.5 million, the amount available for revolving loans under the Credit Agreement was $578.6 million and the amount available per the maximum leverage ratio was $212.7 million. Covenants in the Credit Agreement limit the amount of total indebtedness we can incur. As of August 31, 2025, these covenants effectively limited our ability to incur more than $212.7 million of additional debt from all sources, including the Credit Agreement.

Debt Covenants

Our debt under our Credit Agreement is unconditionally guaranteed, on a joint and several basis, by the Company and certain of its subsidiaries. Our Credit Agreement requires the maintenance of certain key financial covenants. Our Credit Agreement also contains other customary covenants, including, among other things, covenants restricting or limiting us, except under certain conditions set forth therein, from (1) incurring liens on our properties, (2) making certain types of investments, (3) incurring additional debt, and (4) assigning or transferring certain licenses. Our Credit Agreement also contains customary events of default, including failure to pay principal or interest when due, among others. Upon an event of default under our Credit Agreement, the lenders may, among other things, accelerate the maturity of any amounts outstanding. The commitments of the lenders to make loans to us under the Credit Agreement are several and not joint. Accordingly, if any lender fails to make loans to us, our available liquidity could be reduced by an amount up to the aggregate amount of such lender’s commitments under the Credit Agreement.

As of August 31, 2025, we were in compliance with all covenants as defined under the terms of the Credit Agreement. We expect it is possible that a continuation of negative sales trends and the unfavorable impact of tariffs and other macroeconomic conditions may require an amendment to the Credit Agreement to address potential compliance with certain financial covenants. We will likely proactively seek an amendment during our third fiscal quarter to implement for a limited period of time (1) an extension of the time period for the temporary adjustments to the maximum leverage ratio, and (2) a reduction in the minimum interest coverage ratio. We have discussed the potential amendment with the administrative agent and a majority of the lender group. While there can be no assurance that our negotiations with our lender group will be successful, preliminary indications are that our lenders will be supportive of this potential amendment. Our inability to obtain any amendment to the Credit Agreement could result in an event of default under the Credit Agreement, which could have a material adverse effect on our business, financial condition and liquidity.