Rue 21 2012 Annual Report Download - page 54

rue21, inc.
Notes to Consolidated Financial Statements — Continued
Note 3 — Property and Equipment
Property and equipment consisted of the following:
February 2, January 28,
2013 2012
(in thousands)
Furniture and fixtures ............................................. $114,992 $ 93,301
Leasehold improvements ........................................... 129,750 102,731
Computer equipment, software and other .............................. 32,494 22,541
Property and equipment, at cost ..................................... 277,236 218,573
Less accumulated depreciation and amortization ........................ (132,384) (100,775)
Property and equipment, net ........................................ $144,852 $ 117,798
Depreciation and amortization expense was $33.0 million, $26.6 million, and $22.0 million for fiscal years
2012, 2011 and 2010, respectively.
Note 4 — Long-Term Debt
Effective April 10, 2008, the Company established a five-year $60 million senior secured revolving credit facility
(the Senior Secured Credit Facility) with Bank of America N.A. The ceiling is expandable at the Company’s option in
increments of $5 million up to a limit of $85 million under certain defined conditions. The Senior Secured Credit
Facility initial borrowing was $27.2 million. Proceeds from the initial borrowing were used for the extinguishment of
all of the Company’s existing long-term debt facilities and the Bank of America N.A. commitment fee. Availability
under the Senior Secured Credit Facility is collateralized by a first priority interest in all the Company’s assets. On
November 24, 2009, the Company amended its Senior Secured Credit Facility with Bank of America, N.A. Key
provisions of the amendment include an increase in the borrowing ceiling to $85 million from $60 million, which is
further expandable at the Company’s option in increments of $5 million up to a limit of $100 million under certain
defined conditions. Interest accrues at the higher of the Federal Funds rate plus 0.50%, the prime rate or the adjusted
LIBOR rate plus the applicable margin which ranges from 1.25% to 3.00% set quarterly dependent upon average net
availability on the facility during the previous quarter. As of February 2, 2013 and January 28, 2012, there were no
outstanding borrowings under the Senior Secured Credit Facility. Accordingly, the weighted-average interest rate
under the Senior Secured Credit Facility was nil for both of the fiscal years ended February 2, 2013 and January 28,
2012. The Senior Secured Credit Facility includes a fixed charge covenant applicable only if net availability falls
below thresholds of 10%. The Company is in compliance with all covenants under the Senior Secured Credit Facility at
February 2, 2013. The Senior Secured Credit Facility matures in April 2013.
We are currently finalizing an amendment and restatement of our senior secured credit facility with Bank of
America, due to mature on April 10, 2013. We expect that the facility, as amended and restated, will be a five-year
$100 million senior secured revolving credit facility which is further expandable at our option in increments of $10
million up to a maximum of $130 million under certain defined conditions.
Note 5 — Stock-Based Compensation
In November 2009, the Company adopted the 2009 Omnibus Incentive Plan (the 2009 Plan) in connection with
the Company’s initial public offering, pursuant to which key employees, officers, and directors shall be eligible to
receive grants of stock options, stock appreciation rights, restricted stock or restricted stock units to purchase or
receive, as applicable, up to an aggregate of 3,626,000 shares of common stock based on eligibility, vesting, and
performance standards established by the board of directors. Stock options granted are generally exercisable ratably
over three or four years, subject to certain employment terms and conditions. The stock options generally expire ten
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