Express 2014 Annual Report Download - page 24

The terms of our Revolving Credit Facility may restrict our current and future operations, which could
adversely affect our ability to respond to changes in our business and to manage our operations.
We are party to an Asset Based Loan Credit Agreement (“Revolving Credit Facility”) that allows us to borrow up
to $200 million, subject to certain terms and conditions contained in the agreement. The terms of the Revolving
Credit Facility and any agreements governing any future indebtedness may contain, financial restrictions on us
and our restricted subsidiaries, including restrictions on our or our restricted subsidiaries’ ability to, among other
things:
• place liens on our or our restricted subsidiaries’ assets;
• make investments other than permitted investments;
• incur additional indebtedness;
• prepay certain indebtedness;
• merge, consolidate or dissolve;
• sell assets;
• engage in transactions with affiliates;
• change the nature of our business;
• change our or our subsidiaries’ fiscal year or organizational documents; and
• make restricted payments (including certain equity issuances).
In addition, the Revolving Credit Facility requires us to maintain a fixed charge coverage ratio of 1.00 to 1.00, if
excess availability plus eligible cash collateral is less than 10% of the borrowing base for 15 consecutive days.
A failure by us or our subsidiaries to comply with the covenants or to maintain the required financial ratios
contained in the Revolving Credit Facility could result in an event of default under such indebtedness, which
could adversely affect our ability to respond to changes in our business and manage our operations. Upon the
occurrence of an event of default, the lenders under our Revolving Credit Facility could elect to declare all
amounts outstanding to be due and payable and exercise other remedies as set forth in the agreement and there
can be no assurance that our assets would be sufficient to repay any indebtedness in full, which could have a
material adverse effect on our ability to continue to operate as a going concern. See Note 8 to our Consolidated
Financial Statements for further information relating to our indebtedness.
Our ability to pay dividends and repurchase shares is subject to restrictions in our Revolving Credit Facility,
results of operations, and capital requirements.
Any determination to pay dividends or repurchase additional shares in the future will be at the discretion of our
Board of Directors and will depend upon our results of operations, our financial condition, contractual
restrictions, restrictions imposed by applicable law, and other factors our Board of Directors deems relevant. Our
ability to pay dividends on or repurchase our common stock is limited by the terms of the Revolving Credit
Facility and may be further restricted by the terms of any of our future debt or preferred securities. Additionally,
because we are a holding company, our ability to pay dividends on our common stock is limited by restrictions
on the ability of our subsidiaries to pay dividends or make distributions to us, including restrictions under the
terms of the Revolving Credit Facility.
Our results may be adversely affected by fluctuations in energy costs.
Energy costs have fluctuated dramatically in the past. These fluctuations may result in an increase in our
transportation costs for distribution, utility costs for our retail stores, and costs to purchase product from our
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