Dick's Sporting Goods 2003 Annual Report Download - page 45

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dks 03ar 43
4. REVOLVING CREDIT AGREEMENT
The Company’s senior secured revolving credit facility (the “Credit Agreement”), as amended, provides for financing
up to $180 million subject to a borrowing base equal to the lesser of 70% of eligible inventory or 85% of the inventory
liquidation value net of certain reserves (as defined by the Credit Agreement). The Credit Agreement expires on May 30,
2006. As of January 31, 2004 and February 1, 2003, the Company’s unused borrowing capacity under the Credit
Agreement was $154,327,000 and $143,810,000, respectively. Borrowings made pursuant to the Credit Agreement
bear interest based upon a formula at either (a) the prime rate, or (b) the one-month London Interbank Offering Rate
(“LIBOR”), plus the applicable margin (0% for the prime rate option or 1.25% for LIBOR as of January 31, 2004).
Borrowings are collateralized by the assets of the Company, excluding store and distribution center equipment and
fixtures that have a net carrying value of $17,495,000 as of January 31, 2004.
At January 31, 2004 and February 1, 2003, the prime rate was 4.00% and 4.25%, respectively, and LIBOR was 1.10%
and 1.34%, respectively. There were no borrowings outstanding at January 31, 2004 and February 1, 2003.
The Credit Agreement contains restrictive covenants including the maintenance of a certain fixed charge coverage ratio
and prohibits payment of any dividends.
The Credit Agreement provides for letters of credit not to exceed the lesser of (a) $50,000,000, (b) $180,000,000 less the
outstanding loan balance and (c) the borrowing base minus the outstanding loan balance. As of January 31, 2004 and
February 1, 2003, the Company had outstanding letters of credit totaling $12,851,000 and $11,033,000, respectively.
The following table provides information about the Credit Agreement borrowings as of and for the periods:
2003 2002
(Dollars in thousands)
Balance, fiscal period-end $ – $–
Average interest rate 2.63% 3.12%
Maximum outstanding during the year $ 71,395 $134,285
Average outstanding during the year $ 33,027 $ 83,917
5. DEBT
Debt, exclusive of capital lease obligations, consists of the following as of the end of the fiscal periods:
2003 2002
(Dollars in thousands)
Third-party:
Note payable, due in monthly installments of approximately
$3, including interest at 4%, through 2020 $834 $873
Related party:
Note payable to a former principal stockholder, due in monthly
installments of approximately $14, including interest at 12%,
through May 1, 2006 325 443
Total debt 1,159 1,316
Less current portion of:
Third-party (41) (39)
Related party (134) (118)
Total long-term debt $984 $1,159
Certain of the agreements pertaining to long-term debt contain financial and other restrictive covenants, none of which
are more restrictive than those of the Credit Agreement as discussed in Note 4.