Stein Mart 2014 Annual Report Download - page 38

STEIN MART, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in tables in thousands, except per share amounts)
F-14
3. Accrued Expenses and Other Current Liabilities
The major components of accrued expenses and other current liabilities are as follows:
January 31, February 1,
2015 2014
Compensation and employee benefits 12,519$ 14,305$
Unredeemed gift and merchandise return cards 10,614 9,517
Property taxes 12,805 11,528
Accrued vacation 7,241 6,976
Other 26,034 22,549
Accrued expenses and other current liabilities 69,213$ 64,875$
4. Revolving Credit Agreement
In 2011, we entered into an amended and restated revolving credit agreement (the Prior Credit Agreement) with Wells Fargo Bank, N.A.
The Prior Credit Agreement provided for a $100 million senior secured revolving credit facility which could be increased to $150 million.
The Prior Credit Agreement matured on February 28, 2017. Borrowings under the Prior Credit Agreement were based on and
collateralized by eligible credit card receivables and inventory. Proceeds could be used for general corporate purposes, including issuing
standby and commercial letters of credit.
Borrowings under the Prior Credit Agreement shall be either Base Rate Loans or LIBO Rate Loans (all terms as defined in the Prior Credit
Agreement). Base Rate Loans bear interest equal to the highest of (a) the Federal Funds Rate plus one-half of one percent (0.50%), (b)
the Adjusted LIBO Rate plus one percent (1.00%), or (c) the rate of interest in effect for such day as publicly announced from time to time
by Wells Fargo as its prime rate, plus the Applicable Margin. LIBO Rate Loans shall bear interest equal to the Adjusted LIBO Rate plus
the Applicable Margin. The Adjusted LIBO Rate with respect to any LIBO Rate Loan is the interest rate per annum equal to the LIBO Rate
for such Interest Period multiplied by the Statutory Reserve Rate. The Adjusted LIBO Rate with respect to any Base Rate Loan is the
interest rate per annum equal to the LIBO Rate for an Interest Period commencing on the date of such calculation and ending on the date
that is thirty (30) days thereafter multiplied by the Statutory Reserve Rate. The Applicable Margin is based upon a pricing grid depending
on the Average Daily Availability.
The total amount available under the Prior Credit Agreement is the lesser of $100 million or 90% of eligible credit card receivables and
inventories less reserves. The net amount available for borrowing at January 31, 2015 was $93.4 million and represents the capped
borrowing base of $100 million reduced by outstanding letters of credit of $6.6 million. The Prior Credit Agreement contains customary
affirmative and negative covenants, including limitations on granting of liens, certain investments, additional indebtedness, prepayments on
indebtedness and disposition of inventory. We had no direct borrowings at January 31, 2015.
On February 3, 2015, we entered into a $250 million second amended and restated credit agreement with Wells Fargo Bank and a $25
million master loan agreement with Wells Fargo Equipment Finance, Inc. See Note 13 for further discussion.
5. Leases
We lease all of our retail stores, support facilities and certain equipment under operating leases. Our store leases are generally for 10
years with options to extend the lease term for two or more 5-year periods. Annual store rent is generally comprised of a fixed minimum
amount plus a contingent amount based on a percentage of sales in excess of specified levels. Most store leases also require additional
payments covering real estate taxes, common area costs and insurance.
Rent expense is as follows:
2014 2013 2012
Minimum rentals 79,054$73,594$ 71,260$
Contingent rentals 877 1,013 981
Rent expense 79,931$74,607$ 72,241$