Quarterly report pursuant to Section 13 or 15(d)

Note Q - Subsequent Events

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
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
-month period must
be less than
The Fifth Amendment also, among other things, (i) allows for an additional
days 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
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
Other Information for additional detail regarding the Fifth Amendment.