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Long-Term Debt | 3 Months Ended
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Mar. 30, 2025
Debt Disclosure [Abstract] |
Long-Term Debt | (8) Long-Term Debt On December 18, 2024, the Company entered into an agreement to amend and extend its credit facility with Bank of America, N.A. (“BofA”), as administrative agent and lender (the “Loan Agreement”). The Loan Agreement has a maturity date of December 18, 2029 and amends and restates the Company’s prior financing agreement with BofA. Similar to the prior financing agreement, the Loan Agreement provides for a revolving credit facility with an aggregate committed availability of up to $150.0 million. The Company may also request additional increases in aggregate availability, up to a maximum of $200.0 million, in which case the existing lenders under the Loan Agreement will have the option to increase the commitment to accommodate the requested increase. If such existing lenders do not exercise that option, the Company may (with the consent of BofA in its role as the administrative agent, not to be unreasonably withheld) seek other lenders willing to provide such commitments. The credit facility includes a $50.0 million sublimit for issuances of letters of credit. The Company may borrow under the Loan Agreement from time to time, provided the amounts outstanding will not exceed the lesser of the then aggregate committed availability (as discussed above) and the Borrowing Base (such lesser amount being referred to as the “Line Cap”). As defined in the Loan Agreement, the “Borrowing Base” generally is comprised of the sum, at the time of calculation, of (a) 90.00% of eligible credit card receivables; plus (b) the lesser of (i) the value of eligible inventory (other than eligible in-transit inventory), net of inventory reserves, multiplied by 75.00%, or (ii) the value of eligible inventory (other than eligible in-transit inventory), net of inventory reserves, multiplied by 85.00% of the appraised net orderly liquidation value of eligible inventory (expressed as a percentage of the cost of eligible inventory); plus (c) the lesser of (i) the value of eligible in-transit inventory, net of inventory reserves, multiplied by 75.00%, or (ii) the value of eligible in-transit inventory, net of inventory reserves, multiplied by 85.00% of the appraised net orderly liquidation value of eligible in-transit inventory (expressed as a percentage of the cost of eligible in-transit inventory); minus (d) certain agreed upon reserves as well as other reserves established by BofA in its role as the administrative agent in its reasonable discretion. Generally, the Company may designate specific borrowings under the Loan Agreement as either base rate loans or term SOFR rate loans. The applicable interest rate on borrowings is a function of the daily average, over the preceding fiscal quarter, of the excess of the Line Cap over amounts borrowed (such amount being referred to as the “Average Daily Availability”). Those loans designated as term SOFR rate loans bear interest at a rate equal to the then applicable adjusted SOFR rate plus an applicable margin as shown in the tables below. Those loans designated as base rate loans bear interest at a rate equal to the applicable margin for base rate loans (as shown below) plus the highest of (a) the rate of interest in effect for such day as announced from time to time within BofA as its prime rate”, (b) the Federal funds rate, as in effect from time to time, plus one-half of one percent (0.50%), or (c) the term SOFR rate, plus one percentage point (1.00%). As set forth below, the applicable margin for all loans is a function of (i) the Average Daily Availability for the preceding fiscal quarter, and (ii) whether the “Financial Covenant Conversion Date” has occurred by achieving a fixed charge coverage ratio of at least 1.00 to 1.00 for a period of six (6) consecutive months, as measured on a trailing 12-month basis.
Level |  | Average Daily Availability |  | Base Rate Applicable Margin |  | SOFR Rate Applicable Margin
I |  | Greater than or equal to $112,500,000 |  | 0.750% |  | 1.750%
II |  | Greater than or equal to $70,000,000 but less than $112,500,000 |  | 0.875% |  | 1.875%
III |  | Greater than or equal to $45,000,000 but less than $70,000,000 |  | 1.000% |  | 2.000%
IV |  | Less than $45,000,000 |  | 1.125% |  | 2.125%
For the period commencing on the Financial Covenant Conversion Date and continuing thereafter, the applicable margin for all loans is a function of Average Daily Availability for the preceding fiscal quarter as set forth below.
Level |  | Average Daily Availability |  | Base Rate Applicable Margin |  | SOFR Rate Applicable Margin
I |  | Greater than or equal to $70,000,000 |  | 0.750% |  | 1.750%
II |  | Less than $70,000,000 |  | 1.000% |  | 2.000%
As set forth below, the Loan Agreement requires the Company to pay a commitment fee assessed on the unused portion of the credit facility at the unused line fee rate specified below, which is a function of credit facility utilization, calculated as the daily average revolver usage for the month as a percentage of the applicable commitments during the preceding calendar month.
Through Financial Covenant Conversion Date
Utilization | Unused Line Fee Rate
Greater than or equal to 50% | 0.250%
Less than 50% | 0.375%
After Financial Covenant Conversion Date
Utilization | Unused Line Fee Rate
Greater than or equal to 50% | 0.200%
Less than 50% | 0.250%
Obligations under the Loan Agreement are secured by a general lien on and security interest in substantially all of the Company’s assets. The Loan Agreement contains covenants that require the Company to maintain a fixed charge coverage ratio of not less than 1.0:1.0 in certain circumstances after the Financial Covenant Conversion Date, and limits the ability to, among other things, incur liens, incur additional indebtedness, transfer or dispose of assets, change the nature of the business, guarantee obligations, pay dividends or make other distributions or repurchase stock, and make advances, loans or investments. The Company may generally declare or pay cash dividends or repurchase stock only if, among other things, the Financial Covenant Conversion Date has occurred, no default or event of default then exists or would arise from such dividend or repurchase of stock and, after giving effect to such dividend or repurchase, certain availability and/or fixed charge coverage ratio requirements are satisfied. The Loan Agreement contains customary events of default, including, without limitation, failure to pay when due principal amounts with respect to the credit facility, failure to pay any interest or other amounts under the credit facility, failure to comply with certain agreements or covenants contained in the Loan Agreement, failure to satisfy certain judgments against the Company, failure to pay when due (or any other default which permits the acceleration of) certain other material indebtedness in principal amount in excess of $5.0 million, and certain insolvency and bankruptcy events. The Loan Agreement also requires the Company to use BofA and its affiliates as the primary depository institution for all cash management and treasury needs. As of March 30, 2025 and December 29, 2024, the Company had long-term revolving credit borrowings outstanding bearing interest at either SOFR or the prime lending rates as shown in the tables below.
|  | March 30, 2025 |  |  | December 29, 2024 |
|  | (Dollars in thousands) |
SOFR rate |  | $ | 28,000 |  |  | $ | 10,000 |
Prime rate |  |  | 2,882 |  |  |  | 3,756 |
Total borrowings |  | $ | 30,882 |  |  | $ | 13,756 |
SOFR rate |  |  | 4.3 | % |  |  | 4.5 | %
Prime rate |  |  | 7.5 | % |  |  | 7.5 | %
Average interest rate |  |  | 6.7 | % |  |  | 7.6 | %
Period-end interest rate |  |  | 6.9 | % |  |  | 6.9 | %
As of March 30, 2025 and December 29, 2024, the Company had outstanding letter of credit commitments of $5.7 million and $6.1 million, respectively. Total remaining borrowing availability, after subtracting letters of credit, was $113.4 million and $130.1 million as of March 30, 2025 and December 29, 2024, respectively.

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