Note Q - Subsequent Events
|6 Months Ended|
Mar. 28, 2020
|Notes to Financial Statements|
|Subsequent Events [Text Block]||
Note Q—Subsequent Events
April 27, 2020,Delta Apparel, Inc. and its subsidiaries, M.J. Soffe, LLC, Culver City Clothing Company (f/k/a Junkfood Clothing Company), Salt Life, LLC, and
DTG2Go,LLC (f/k/a Art Gun, LLC) entered into a Fifth Amendment to the Fifth Amended and Restated Credit Agreement with Wells Fargo Bank (the “Agent”) and the other lenders set forth therein (the “Fifth Amendment”). The Fifth Amendment amends the financial covenant provisions from the amendment date through
October 3, 2020,including effectively lowering the minimum availability thresholds and removing the requirement that our Fixed Charge Coverage Ratio (“FCCR”) for the preceding
12-month period must
notbe less than
1.0.The Fifth Amendment also, among other things, (i) allows for an additional
30days of aged receivables from customers in the borrowing base through
August 1, 2020, (ii) ceases amortization of real estate and machinery and equipment assets in the borrowing base through
August 1, 2020, (iii) postpones amortization of trademark assets in the borrowing base until
October 4, 2020; (iv) amends the definition of Fixed Charge Coverage Ratio to reference the monthly amortization of the borrowing bases that were amended as part of the Fourth Amendment to the Fifth Amended and Restated Credit Agreement on
November 19, 2019, (v) amends the LIBOR rate definition to include a floor rate of
1.0%,and (vi) requires weekly reporting of accounts receivable to the Agent through
October 3, 2020.
We expect the Fifth Amendment will enhance our borrowing base and allow us to access more of our availability under the Amended Credit Agreement while easing the financial covenant restrictions for the remainder of fiscal
See Part II, Item
5.Other Information for additional detail regarding the Fifth Amendment.
The entire disclosure for significant events or transactions that occurred after the balance sheet date through the date the financial statements were issued or the date the financial statements were available to be issued. Examples include: the sale of a capital stock issue, purchase of a business, settlement of litigation, catastrophic loss, significant foreign exchange rate changes, loans to insiders or affiliates, and transactions not in the ordinary course of business.
Reference 1: http://www.xbrl.org/2003/role/disclosureRef