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Lines of Credit
 6 Months Ended
Oct. 31, 2021
Debt Disclosure [Abstract]  
Lines of Credit

9. Lines of Credit

Revolving Credit Agreement – United States

Our Credit Agreement (“Credit Agreement”) with Wells Fargo Bank, N.A. (“Wells Fargo”) provides a revolving loan commitment of $30 million, is set to expire on August 15, 2022, and allows us to issue letters of credit not to exceed $1 million.

Interest is charged at a rate (applicable interest rate of 1.74%, 1.74%, and 1.71% as of October 31, 2021, November 1, 2020, and May 2, 2021, respectively) calculated using a variable spread over LIBOR based on our ratio of debt to EBITDA. Outstanding borrowings are secured by a pledge of 65% of the common stock of Culp International Holdings Ltd. (our subsidiary located in the Cayman Islands).

As of October 31, 2021, November 1, 2020, and May 2, 2021, there were $275,000, $250,000, and $275,000, respectively, in outstanding letters of credit provided by the Credit Agreement. As of October 31, 2021, we had $725,000 remaining for the issuance of additional letters of credit.

There were no borrowings outstanding under the Credit Agreement as of October 31, 2021, November 1, 2020, and May 2, 2021, respectively.

Revolving Credit Agreements – China Operations

Denominated in Chinese Yuan Renminbi (“RMB”)

We have an unsecured credit agreement denominated in RMB with a bank located in China that provides for a line of credit of up to 40 million RMB ($6.3 million USD as of October 31, 2021). This agreement has an interest rate determined by the Chinese government at the time of borrowing. and expired on December 1, 2021.

On November 15, 2021, we renewed this agreement, which renewal maintains our borrowing capacity of 40 million RMB and extends the expiration date to November 15, 2022.

There were no borrowings outstanding under this agreement as of October 31, 2021, November 1, 2020, and May 2, 2021, respectively.

Denominated in United States Dollar (“USD”)

As of May 2, 2021, we had an unsecured credit agreement denominated in USD with another bank located in China that provided for a line of credit up to $2 million USD and was set to expire on July 7, 2021. On August 30, 2021, we renewed this agreement, which maintains our borrowing capacity of $2.0 million and extends the expiration date to August 30, 2022. The interest rate regarding this agreement is determined by the Chinese government at the time of borrowing.

There were no  borrowings outstanding under this agreement as October 31, 2021, November 1, 2020, and May 2, 2021, respectively.

Overall

Our loan agreements require, among other things, that we maintain compliance with certain financial covenants. As of October 31, 2021, we complied with our financial covenants.

No interest payments were made during the first half of fiscal 2022. Interest paid during the first half of fiscal 2021 was $60,000.