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<div id="a1" style="position:absolute;font-family:'Times New Roman';font-size:13.28px;left:357px;top:82px;">UNITED STATES </div><div id="a3" style="position:absolute;font-family:'Times New Roman';font-size:13.28px;left:271px;top:97px;">SECURITIES AND EXCHANGE COMMISSION </div><div id="a5" style="position:absolute;font-family:'Times New Roman';font-size:13.28px;left:353px;top:113px;">450 Fifth Street NW </div><div id="a7" style="position:absolute;font-family:'Times New Roman';font-size:13.28px;left:342px;top:128px;">Washington, D.C. 29549<div style="display:inline-block;width:5px">&#160;</div></div><div id="a11" style="position:absolute;font-family:'Times New Roman';font-size:24px;font-weight:bold;left:357px;top:194px;">Form </div><div id="a11_5_3" style="position:absolute;font-family:'Times New Roman';font-size:24px;font-weight:bold;left:421px;top:194px;"><ix:nonNumeric id="ID_0" name="dei:DocumentType" 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<div id="a218" style="position:absolute;font-family:'Times New Roman';font-size:16px;left:404px;top:990px;">2</div><div id="a220" style="position:absolute;font-family:'Times New Roman';font-size:16px;left:310px;top:67px;">THE CATO<div style="display:inline-block;width:6px">&#160;</div>CORPORATION<div style="display:inline-block;width:6px">&#160;</div></div><div id="a227" style="position:absolute;font-family:'Times New Roman';font-weight:bold;left:96px;top:105px;">Item 1.01 Entry into a Material Definitive Agreement. </div><div id="a244" style="position:absolute;font-family:'Times New Roman';left:96px;top:138px;">On March 13, 2025, The Cato Corporation, as borrower (the &#8220;Company&#8221;),<div style="display:inline-block;width:2px">&#160;</div>and certain domestic </div><div id="a272" style="position:absolute;font-family:'Times New Roman';left:96px;top:155px;">subsidiaries, as borrowers and guarantors, entered into a Credit Agreement<div style="display:inline-block;width:2px">&#160;</div>(the &#8220;ABL Credit </div><div id="a299" style="position:absolute;font-family:'Times New Roman';left:96px;top:172px;">Agreement&#8221;) and related loan documents, by and among the Company, those other domestic subsidiaries, </div><div id="a327" style="position:absolute;font-family:'Times New Roman';left:96px;top:189px;">and Wells Fargo Bank, National Association, as the lender (the &#8220;Lender&#8221;), to establish an asset-based </div><div id="a359" style="position:absolute;font-family:'Times New Roman';left:96px;top:206px;">revolving credit facility (the &#8220;ABL Facility&#8221;) in an amount up to $35<div style="display:inline-block;width:2px">&#160;</div>million. 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The </div><div id="a428" style="position:absolute;font-family:'Times New Roman';left:96px;top:239px;">ABL Credit Agreement replaces the Credit Agreement, dated as of May<div style="display:inline-block;width:2px">&#160;</div>19, 2022, as amended from time </div><div id="a463" style="position:absolute;font-family:'Times New Roman';left:96px;top:256px;">to time, between the Company, as borrower, certain domestic subsidiaries of the Company, as guarantors, </div><div id="a493" style="position:absolute;font-family:'Times New Roman';left:96px;top:273px;">and the Lender, as lender and agent (the &#8220;Prior Credit Agreement&#8221;).<div style="display:inline-block;width:7px">&#160;</div>[No principal or accrued interest was </div><div id="a527" style="position:absolute;font-family:'Times New Roman';left:96px;top:290px;">outstanding under the Prior Credit Facility at the time of its termination on<div style="display:inline-block;width:2px">&#160;</div>March 13. 2025.]<div style="display:inline-block;width:3px">&#160;</div></div><div id="a560" style="position:absolute;font-family:'Times New Roman';left:96px;top:307px;"><div style="display:inline-block;width:4px">&#160;</div></div><div id="a562" style="position:absolute;font-family:'Times New Roman';left:96px;top:324px;">The ABL Facility may be used for revolving credit loans and letters of credit<div style="display:inline-block;width:2px">&#160;</div>from time to time up to a </div><div id="a605" style="position:absolute;font-family:'Times New Roman';left:96px;top:341px;">maximum principal amount of $35 million, less an amount equal<div style="display:inline-block;width:2px">&#160;</div>to the greater of (a) 10.0% of the lesser </div><div id="a643" style="position:absolute;font-family:'Times New Roman';left:96px;top:358px;">of the borrowing base described below and $35 million and (b) $5 million,<div style="display:inline-block;width:2px">&#160;</div>subject to the other limitations </div><div id="a680" style="position:absolute;font-family:'Times New Roman';left:96px;top:374px;">described below. The ABL Facility includes a $15 million uncommitted accordion feature that permits the </div><div id="a710" style="position:absolute;font-family:'Times New Roman';left:96px;top:391px;">borrowers, under certain conditions, to solicit the Lender to provide additional<div style="display:inline-block;width:2px">&#160;</div>revolving loan </div><div id="a736" style="position:absolute;font-family:'Times New Roman';left:96px;top:408px;">commitments to increase the aggregate amount of the revolving<div style="display:inline-block;width:2px">&#160;</div>loan commitments up to a maximum </div><div id="a766" style="position:absolute;font-family:'Times New Roman';left:96px;top:425px;">principal amount of $50 million.<div style="display:inline-block;width:7px">&#160;</div>The ABL Facility contains a sub-facility that allows the Company<div style="display:inline-block;width:2px">&#160;</div>to </div><div id="a800" style="position:absolute;font-family:'Times New Roman';left:96px;top:442px;">issue letters of credit in an aggregate amount not to exceed $5 million.<div style="display:inline-block;width:2px">&#160;</div></div><div id="a828" style="position:absolute;font-family:'Times New Roman';left:96px;top:476px;">The amount available under the ABL Facility is limited by a borrowing<div style="display:inline-block;width:2px">&#160;</div>base consisting of certain eligible </div><div id="a862" style="position:absolute;font-family:'Times New Roman';left:96px;top:493px;">credit card receivables and inventory, reduced by specified reserves, as follows:<div style="display:inline-block;width:3px">&#160;</div></div><div id="a886" style="position:absolute;font-family:'Times New Roman';left:96px;top:526px;">&#8226;90% of eligible credit card receivable, plus<div style="display:inline-block;width:3px">&#160;</div></div><div id="a901" style="position:absolute;font-family:'Times New Roman';left:96px;top:543px;">&#9642;90% of net recovery percentage of eligible inventory multiplied by most recent<div style="display:inline-block;width:2px">&#160;</div>appraised value of such </div><div id="a933" style="position:absolute;font-family:'Times New Roman';left:96px;top:560px;">inventory, calculated at the lower of (a) cost computed on a first-in first-out basis and (b) market value </div><div id="a973" style="position:absolute;font-family:'Times New Roman';left:96px;top:577px;">(net of intercompany profits and certain other adjustments), minus </div><div id="a991" style="position:absolute;font-family:'Times New Roman';left:96px;top:594px;">&#8226;applicable reserves.<div style="display:inline-block;width:3px">&#160;</div></div><div id="a996" style="position:absolute;font-family:'Times New Roman';left:96px;top:611px;"><div style="display:inline-block;width:4px">&#160;</div></div><div id="a998" style="position:absolute;font-family:'Times New Roman';left:96px;top:627px;">The ABL Facility permits borrowings based upon (a) base rate (calculated<div style="display:inline-block;width:2px">&#160;</div>as the greatest of (i) the federal </div><div id="a1035" style="position:absolute;font-family:'Times New Roman';left:96px;top:644px;">funds rate plus 1/2%, (ii) the SOFR rate described below for an interest<div style="display:inline-block;width:2px">&#160;</div>period of one month, plus 1%, </div><div id="a1073" style="position:absolute;font-family:'Times New Roman';left:96px;top:661px;">(iii) the rate of interest announced, from time to time, within the Lender at<div style="display:inline-block;width:2px">&#160;</div>its principal office in San </div><div id="a1112" style="position:absolute;font-family:'Times New Roman';left:96px;top:678px;">Francisco as its &#8220;prime rate&#8221; and (iv) 0%) and (b) SOFR rate of one,<div style="display:inline-block;width:2px">&#160;</div>three or six-month interest periods </div><div id="a1152" style="position:absolute;font-family:'Times New Roman';left:96px;top:695px;">(with SOFR defined as the secured overnight financing rate administered<div style="display:inline-block;width:2px">&#160;</div>by the Federal Reserve Bank of </div><div id="a1184" style="position:absolute;font-family:'Times New Roman';left:96px;top:712px;">New York (or its successor)). Base rate borrowings bear interest at an annual rate equal to 50 basis points </div><div id="a1222" style="position:absolute;font-family:'Times New Roman';left:96px;top:729px;">above base rate.<div style="display:inline-block;width:7px">&#160;</div>SOFR borrowings bear interest at an annual rate equal<div style="display:inline-block;width:2px">&#160;</div>to SOFR for the interest period </div><div id="a1258" style="position:absolute;font-family:'Times New Roman';left:96px;top:746px;">selected plus 10 basis points plus 150 basis points.<div style="display:inline-block;width:6px">&#160;</div>The ABL Facility charges a fee on unutilized </div><div id="a1293" style="position:absolute;font-family:'Times New Roman';left:96px;top:762px;">commitments at an annual rate of 37.5 basis points if at least half of the<div style="display:inline-block;width:2px">&#160;</div>ABL commitments are unutilized </div><div id="a1331" style="position:absolute;font-family:'Times New Roman';left:96px;top:779px;">and at an annual rate of 25 basis points if less than half of the ABL commitments<div style="display:inline-block;width:2px">&#160;</div>are unutilized.<div style="display:inline-block;width:7px">&#160;</div>In </div><div id="a1371" style="position:absolute;font-family:'Times New Roman';left:96px;top:796px;">addition, the ABL Facility charges a monthly collateral monitoring fee and customary<div style="display:inline-block;width:2px">&#160;</div>fees for letters of </div><div id="a1404" style="position:absolute;font-family:'Times New Roman';left:96px;top:813px;">credit.<div style="display:inline-block;width:7px">&#160;</div></div><div id="a1407" style="position:absolute;font-family:'Times New Roman';left:96px;top:830px;"><div style="display:inline-block;width:4px">&#160;</div></div><div id="a1409" style="position:absolute;font-family:'Times New Roman';left:96px;top:847px;">The ABL Facility matures on March 13, 2028.<div style="display:inline-block;width:6px">&#160;</div>The ABL Facility may be prepaid from time to time, in </div><div id="a1447" style="position:absolute;font-family:'Times New Roman';left:96px;top:864px;">whole or in part, without a prepayment penalty or premium.<div style="display:inline-block;width:6px">&#160;</div>In addition, customary mandatory </div><div id="a1475" style="position:absolute;font-family:'Times New Roman';left:96px;top:880px;">prepayments of the loans under the ABL Facility are required upon the occurrence<div style="display:inline-block;width:2px">&#160;</div>of certain events </div><div id="a1507" style="position:absolute;font-family:'Times New Roman';left:96px;top:897px;">including, without limitation, outstanding borrowing exposures exceeding<div style="display:inline-block;width:2px">&#160;</div>the borrowing base and certain </div><div id="a1531" style="position:absolute;font-family:'Times New Roman';left:96px;top:914px;">dispositions of assets outside of the ordinary course of business.<div style="display:inline-block;width:6px">&#160;</div>Accrued interest is payable (a) at the end </div><div id="a1567" style="position:absolute;font-family:'Times New Roman';left:96px;top:931px;">of each interest period for borrowings based upon the SOFR rate (but not<div style="display:inline-block;width:2px">&#160;</div>to exceed three months) and (b) </div></div>
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<div id="a1606" style="position:absolute;font-family:'Times New Roman';font-size:16px;left:404px;top:990px;">3</div><div id="a1608" style="position:absolute;font-family:'Times New Roman';left:96px;top:49px;">monthly for borrowings based upon the base rate.<div style="display:inline-block;width:3px">&#160;</div></div><div id="a1625" style="position:absolute;font-family:'Times New Roman';left:96px;top:66px;"><div style="display:inline-block;width:4px">&#160;</div></div><div id="a1627" style="position:absolute;font-family:'Times New Roman';left:96px;top:83px;">The borrowers&#8217; obligations under the ABL Facility (and certain related obligations)<div style="display:inline-block;width:2px">&#160;</div>are guaranteed by the </div><div id="a1657" style="position:absolute;font-family:'Times New Roman';left:96px;top:99px;">other borrowers and the guarantors.<div style="display:inline-block;width:7px">&#160;</div>Each of the Company&#8217;s future domestic subsidiaries is also required </div><div id="a1687" style="position:absolute;font-family:'Times New Roman';left:96px;top:116px;">to guarantee the ABL Facility on a senior secured basis (such future guarantors<div style="display:inline-block;width:2px">&#160;</div>and the borrowers and </div><div id="a1721" style="position:absolute;font-family:'Times New Roman';left:96px;top:133px;">guarantors referred to in the first sentence of this paragraph, the &#8220;Loan Parties&#8221;).<div style="display:inline-block;width:6px">&#160;</div>In addition, the </div><div id="a1753" style="position:absolute;font-family:'Times New Roman';left:96px;top:150px;">borrowers&#8217; obligations<div style="display:inline-block;width:3px">&#160;</div>are secured on a first-priority basis by all assets of the Loan Parties, subject<div style="display:inline-block;width:2px">&#160;</div>to </div><div id="a1790" style="position:absolute;font-family:'Times New Roman';left:96px;top:167px;">certain exceptions.<div style="display:inline-block;width:3px">&#160;</div></div><div id="a1795" style="position:absolute;font-family:'Times New Roman';left:96px;top:184px;"><div style="display:inline-block;width:4px">&#160;</div></div><div id="a1797" style="position:absolute;font-family:'Times New Roman';font-style:italic;left:96px;top:201px;">Cash Dominion</div><div id="a1800" style="position:absolute;font-family:'Times New Roman';left:189px;top:201px;">. Under the terms of the ABL Facility, if (i) an event of default exists or (ii) excess </div><div id="a1836" style="position:absolute;font-family:'Times New Roman';left:96px;top:217px;">borrowing availability under the ABL Facility (the &#8220;Excess Availability&#8221;) falls below the greater of (a) </div><div id="a1866" style="position:absolute;font-family:'Times New Roman';left:96px;top:234px;">15.0% of the lesser of the borrowing base and $35 million and (b) $10 million,<div style="display:inline-block;width:2px">&#160;</div>the Loan Parties will </div><div id="a1904" style="position:absolute;font-family:'Times New Roman';left:96px;top:251px;">become subject to cash dominion, which will require prepayment of<div style="display:inline-block;width:2px">&#160;</div>loans under the ABL Facility with </div><div id="a1936" style="position:absolute;font-family:'Times New Roman';left:96px;top:268px;">the cash deposited in certain deposit accounts of the Loan Parties, including<div style="display:inline-block;width:2px">&#160;</div>a concentration account, and </div><div id="a1968" style="position:absolute;font-family:'Times New Roman';left:96px;top:285px;">will restrict the Loan Parties&#8217; ability to transfer cash from<div style="display:inline-block;width:2px">&#160;</div>their concentration account. Such cash </div><div id="a1998" style="position:absolute;font-family:'Times New Roman';left:96px;top:302px;">dominion period will end, in the case of an event of default, when the event of<div style="display:inline-block;width:2px">&#160;</div>default no longer exists, </div><div id="a2039" style="position:absolute;font-family:'Times New Roman';left:96px;top:319px;">and in the case of when Excess Availability falls below the threshold described in the first sentence of this </div><div id="a2077" style="position:absolute;font-family:'Times New Roman';left:96px;top:336px;">paragraph, when<div style="display:inline-block;width:7px">&#160;</div>Excess Availability exceeds such threshold for a period of 30 consecutive days. </div><div id="a2105" style="position:absolute;font-family:'Times New Roman';left:96px;top:352px;"><div style="display:inline-block;width:4px">&#160;</div></div><div id="a2107" style="position:absolute;font-family:'Times New Roman';font-style:italic;left:96px;top:369px;">Affirmative and Restrictive Covenants</div><div id="a2114" style="position:absolute;font-family:'Times New Roman';left:320px;top:369px;">. The ABL Credit Agreement governing the ABL Facility contains </div><div id="a2134" style="position:absolute;font-family:'Times New Roman';left:96px;top:386px;">customary representations and warranties, affirmative and negative covenants (subject,<div style="display:inline-block;width:2px">&#160;</div>in each case, to </div><div id="a2160" style="position:absolute;font-family:'Times New Roman';left:96px;top:403px;">exceptions and qualifications), and events of defaults, including covenants<div style="display:inline-block;width:2px">&#160;</div>that limit the Company&#8217;s </div><div id="a2186" style="position:absolute;font-family:'Times New Roman';left:96px;top:420px;">ability to, among other things:<div style="display:inline-block;width:3px">&#160;</div></div><div id="a2199" style="position:absolute;font-family:'Times New Roman';left:96px;top:454px;">&#8226;<div style="display:inline-block;width:43px">&#160;</div>incur additional indebtedness; </div><div id="a2207" style="position:absolute;font-family:'Times New Roman';left:96px;top:470px;">&#8226;<div style="display:inline-block;width:43px">&#160;</div>create liens on its assets; </div><div id="a2219" style="position:absolute;font-family:'Times New Roman';left:96px;top:487px;">&#8226;<div style="display:inline-block;width:43px">&#160;</div>make investments, including loans and advances to foreign subsidiaries;<div style="display:inline-block;width:2px">&#160;</div></div><div id="a2240" style="position:absolute;font-family:'Times New Roman';left:96px;top:504px;">&#8226;<div style="display:inline-block;width:43px">&#160;</div>pay dividends and make other restricted payments;<div style="display:inline-block;width:3px">&#160;</div></div><div id="a2258" style="position:absolute;font-family:'Times New Roman';left:96px;top:521px;">&#8226;<div style="display:inline-block;width:43px">&#160;</div>sell certain assets outside of the ordinary course of business;<div style="display:inline-block;width:2px">&#160;</div></div><div id="a2281" style="position:absolute;font-family:'Times New Roman';left:96px;top:538px;">&#8226;<div style="display:inline-block;width:43px">&#160;</div>consolidate, merge, sell or otherwise dispose of all or substantially all of the Company&#8217;s assets;<div style="display:inline-block;width:3px">&#160;</div></div><div id="a2315" style="position:absolute;font-family:'Times New Roman';left:96px;top:555px;">&#8226;<div style="display:inline-block;width:43px">&#160;</div>make acquisitions; and </div><div id="a2323" style="position:absolute;font-family:'Times New Roman';left:96px;top:572px;">&#8226;<div style="display:inline-block;width:43px">&#160;</div>enter into transactions with affiliates.<div style="display:inline-block;width:3px">&#160;</div></div><div id="a2337" style="position:absolute;font-family:'Times New Roman';left:96px;top:589px;"><div style="display:inline-block;width:4px">&#160;</div></div><div id="a2339" style="position:absolute;font-family:'Times New Roman';left:96px;top:605px;">Restrictions relating to permitted acquisitions, permitted investments, prepayment<div style="display:inline-block;width:2px">&#160;</div>of other indebtedness, </div><div id="a2362" style="position:absolute;font-family:'Times New Roman';left:96px;top:622px;">and restricted payments are substantially less, or not applicable in<div style="display:inline-block;width:2px">&#160;</div>the case of restricted payments, if the </div><div id="a2396" style="position:absolute;font-family:'Times New Roman';left:96px;top:639px;">Company can satisfy the following payment conditions: (i) there is no default<div style="display:inline-block;width:2px">&#160;</div>or event of default under </div><div id="a2430" style="position:absolute;font-family:'Times New Roman';left:96px;top:656px;">the ABL Facility,<div style="display:inline-block;width:3px">&#160;</div>(ii) there are no revolving credit loans outstanding, (iii) the Loan Parties have </div><div id="a2463" style="position:absolute;font-family:'Times New Roman';left:96px;top:673px;">unrestricted cash of greater than $20 million, (iv) the Lender receives<div style="display:inline-block;width:2px">&#160;</div>at least three business days&#8217; prior </div><div id="a2497" style="position:absolute;font-family:'Times New Roman';left:96px;top:690px;">written notice of such event, including information about the estimated<div style="display:inline-block;width:2px">&#160;</div>date and amount of the payment </div><div id="a2530" style="position:absolute;font-family:'Times New Roman';left:96px;top:707px;">and a reasonable description of such event, and (v) Lender receives a<div style="display:inline-block;width:2px">&#160;</div>certificate certifying compliance </div><div id="a2560" style="position:absolute;font-family:'Times New Roman';left:96px;top:723px;">with the foregoing clauses and demonstrating the calculations required<div style="display:inline-block;width:2px">&#160;</div>thereby. </div><div id="a2581" style="position:absolute;font-family:'Times New Roman';left:96px;top:757px;">The description of the ABL Credit Agreement and ABL Facility set<div style="display:inline-block;width:2px">&#160;</div>forth herein is qualified in its entirety </div><div id="a2617" style="position:absolute;font-family:'Times New Roman';left:96px;top:774px;">by reference to the ABL Credit Agreement filed as Exhibit 10.1 hereto, which<div style="display:inline-block;width:2px">&#160;</div>is incorporated by </div><div id="a2649" style="position:absolute;font-family:'Times New Roman';left:96px;top:791px;">reference herein. </div><div id="a2655" style="position:absolute;font-family:'Times New Roman';font-weight:bold;left:96px;top:849px;">Item 1.02<div style="display:inline-block;width:7px">&#160;</div>Termination of a Material Definitive Agreement. </div><div id="a2658" style="position:absolute;font-family:'Times New Roman';left:96px;top:890px;">The information set forth in Item 1.01 of this Form 8-K is incorporated<div style="display:inline-block;width:2px">&#160;</div>by reference into this Item 1.02. </div><div id="a2699" style="position:absolute;font-family:'Times New Roman';font-weight:bold;left:96px;top:924px;"><div style="display:inline-block;width:192px">&#160;</div></div></div>
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<div id="a2702" style="position:absolute;font-family:'Times New Roman';font-size:16px;left:404px;top:990px;">4</div><div id="a2705" style="position:absolute;font-family:'Times New Roman';font-weight:bold;left:96px;top:66px;">Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet </div><div id="a2737" style="position:absolute;font-family:'Times New Roman';font-weight:bold;left:96px;top:83px;">Arrangement of a Registrant. </div><div id="a2746" style="position:absolute;font-family:'Times New Roman';left:96px;top:116px;">The information set forth in Item 1.01 of this Form 8-K is incorporated<div style="display:inline-block;width:2px">&#160;</div>by reference into this Item 2.03. </div><div id="a2787" style="position:absolute;font-family:'Times New Roman';font-size:13.28px;font-weight:bold;left:96px;top:168px;">Item 9.01. Financial Statements and Exhibits. </div><div id="a2789" style="position:absolute;font-family:'Times New Roman';font-size:13.28px;left:120px;top:201px;">(d) Exhibits </div><div id="a2791" style="position:absolute;font-family:'Times New Roman';font-size:13.28px;color:#0563C1;left:120px;top:236px;"><a href="exhibit101.htm" style="color:#0563C1;text-decoration:underline;">Exhibit 10.1 - Press Release issued </a></div><div id="a2796" style="position:absolute;font-family:'Times New Roman';color:#0563C1;left:310px;top:235px;"><a href="exhibit101.htm" style="color:#0563C1;text-decoration:underline;">Credit Agreement, dated as of March 13, 2025, by and among Wells</a></div><div id="a2820" style="position:absolute;font-family:'Times New Roman';color:#0563C1;left:96px;top:252px;"><a href="exhibit101.htm" style="color:#0563C1;text-decoration:underline;">Fargo Bank, National Association, as Lender, and the Cato Corporation and certain of its subsidiaries as</a></div><div id="a2852" style="position:absolute;font-family:'Times New Roman';color:#0563C1;left:96px;top:269px;"><a href="exhibit101.htm" style="color:#0563C1;text-decoration:underline;">Borrowers and certain of its other subsidiaries as Guarantors<span style="display:inline-block;width:6px;text-decoration:underline">&#160;</span></a></div><div id="a2872" style="position:absolute;font-family:'Times New Roman';font-size:13.28px;left:120px;top:304px;">Exhibit 104 &#8211; Cover Page Interactive Data File (embedded within Inline XBRL document) </div></div>
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[{"type": "8-K", "sequence": "1", "filename": "cato-20250313.htm", "description": "FORM 8-K", "secsgml_size_bytes": 52948}]
{"company-data": {"conformed-name": "CATO CORP", "cik": "0000018255", "assigned-sic": "5621", "organization-name": "07 Trade & Services", "irs-number": "560484485", "state-of-incorporation": "DE", "fiscal-year-end": "0201"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "001-31340", "film-number": "25752608"}, "business-address": {"street1": "8100 DENMARK ROAD", "city": "CHARLOTTE", "state": "NC", "zip": "28273-5975", "phone": "7045517352"}, "mail-address": {"street1": "8100 DENMARK ROAD", "city": "CHARLOTTE", "state": "NC", "zip": "28273-5975"}, "former-company": {"former-conformed-name": "CATO STORES INC", "date-changed": "19701002"}}
cato-20250313
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
450 Fifth Street NW
Washington, D.C. 29549
Form
8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
March 13, 2025
THE CATO CORPORATION
(Exact Name of Registrant as Specified in Its Charter)
Delaware
1-31340
56-0484485
(State or Other Jurisdiction
of
Incorporation
(Commission
File Number)
(IRS Employer
Identification No.)
8100 Denmark Road
,
Charlotte
,
North Carolina
(Address of Principal Executive Offices)
28273-5975
(Zip Code)
(704)
554-8510
(Registrant's Telephone
Number, Including Area Code)
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Check
the
appropriate
box
below
if
the
Form
8-K
filing
is
intended
to
simultaneously
satisfy
the
filing
obligation
of
the
registrant
under any of the following provisions:
☐
Written communications pursuant to Rule 425
under the Securities Act (17 CFR 230.425)
☐
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a
-12)
☐
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
☐
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Class A - Common Stock, par value $.033 per share
CATO
New York Stock Exchange
Indicate by check mark whether the registrant is an emerging growth company
as defined in as defined in Rule 405 of the Securities
Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934
(§240.12b-2 of this chapter).
Emerging growth company
☐
If an emerging growth company,
indicate by check mark if the registrant has elected not to use the extended
transition period for
complying with any new or revised financial accounting standards provided
pursuant to Section 13(a) of the Exchange Act.
☐
2
THE CATO
CORPORATION
Item 1.01 Entry into a Material Definitive Agreement.
On March 13, 2025, The Cato Corporation, as borrower (the "Company"),
and certain domestic
subsidiaries, as borrowers and guarantors, entered into a Credit Agreement
(the "ABL Credit
Agreement") and related loan documents, by and among the Company, those other domestic subsidiaries,
and Wells Fargo Bank, National Association, as the lender (the "Lender"), to establish an asset-based
revolving credit facility (the "ABL Facility") in an amount up to $35
million. The proceeds from the ABL
Facility may be used to provide funding for ongoing working capital and general
corporate purposes. The
ABL Credit Agreement replaces the Credit Agreement, dated as of May
19, 2022, as amended from time
to time, between the Company, as borrower, certain domestic subsidiaries of the Company, as guarantors,
and the Lender, as lender and agent (the "Prior Credit Agreement").
[No principal or accrued interest was
outstanding under the Prior Credit Facility at the time of its termination on
March 13. 2025.]
The ABL Facility may be used for revolving credit loans and letters of credit
from time to time up to a
maximum principal amount of $35 million, less an amount equal
to the greater of (a) 10.0% of the lesser
of the borrowing base described below and $35 million and (b) $5 million,
subject to the other limitations
described below. The ABL Facility includes a $15 million uncommitted accordion feature that permits the
borrowers, under certain conditions, to solicit the Lender to provide additional
revolving loan
commitments to increase the aggregate amount of the revolving
loan commitments up to a maximum
principal amount of $50 million.
The ABL Facility contains a sub-facility that allows the Company
to
issue letters of credit in an aggregate amount not to exceed $5 million.
The amount available under the ABL Facility is limited by a borrowing
base consisting of certain eligible
credit card receivables and inventory, reduced by specified reserves, as follows:
•90% of eligible credit card receivable, plus
▪90% of net recovery percentage of eligible inventory multiplied by most recent
appraised value of such
inventory, calculated at the lower of (a) cost computed on a first-in first-out basis and (b) market value
(net of intercompany profits and certain other adjustments), minus
•applicable reserves.
The ABL Facility permits borrowings based upon (a) base rate (calculated
as the greatest of (i) the federal
funds rate plus 1/2%, (ii) the SOFR rate described below for an interest
period of one month, plus 1%,
(iii) the rate of interest announced, from time to time, within the Lender at
its principal office in San
Francisco as its "prime rate" and (iv) 0%) and (b) SOFR rate of one,
three or six-month interest periods
(with SOFR defined as the secured overnight financing rate administered
by the Federal Reserve Bank of
New York (or its successor)). Base rate borrowings bear interest at an annual rate equal to 50 basis points
above base rate.
SOFR borrowings bear interest at an annual rate equal
to SOFR for the interest period
selected plus 10 basis points plus 150 basis points.
The ABL Facility charges a fee on unutilized
commitments at an annual rate of 37.5 basis points if at least half of the
ABL commitments are unutilized
and at an annual rate of 25 basis points if less than half of the ABL commitments
are unutilized.
In
addition, the ABL Facility charges a monthly collateral monitoring fee and customary
fees for letters of
credit.
The ABL Facility matures on March 13, 2028.
The ABL Facility may be prepaid from time to time, in
whole or in part, without a prepayment penalty or premium.
In addition, customary mandatory
prepayments of the loans under the ABL Facility are required upon the occurrence
of certain events
including, without limitation, outstanding borrowing exposures exceeding
the borrowing base and certain
dispositions of assets outside of the ordinary course of business.
Accrued interest is payable (a) at the end
of each interest period for borrowings based upon the SOFR rate (but not
to exceed three months) and (b)
3
monthly for borrowings based upon the base rate.
The borrowers' obligations under the ABL Facility (and certain related obligations)
are guaranteed by the
other borrowers and the guarantors.
Each of the Company's future domestic subsidiaries is also required
to guarantee the ABL Facility on a senior secured basis (such future guarantors
and the borrowers and
guarantors referred to in the first sentence of this paragraph, the "Loan Parties").
In addition, the
borrowers' obligations
are secured on a first-priority basis by all assets of the Loan Parties, subject
to
certain exceptions.
Cash Dominion
. Under the terms of the ABL Facility, if (i) an event of default exists or (ii) excess
borrowing availability under the ABL Facility (the "Excess Availability") falls below the greater of (a)
15.0% of the lesser of the borrowing base and $35 million and (b) $10 million,
the Loan Parties will
become subject to cash dominion, which will require prepayment of
loans under the ABL Facility with
the cash deposited in certain deposit accounts of the Loan Parties, including
a concentration account, and
will restrict the Loan Parties' ability to transfer cash from
their concentration account. Such cash
dominion period will end, in the case of an event of default, when the event of
default no longer exists,
and in the case of when Excess Availability falls below the threshold described in the first sentence of this
paragraph, when
Excess Availability exceeds such threshold for a period of 30 consecutive days.
Affirmative and Restrictive Covenants
. The ABL Credit Agreement governing the ABL Facility contains
customary representations and warranties, affirmative and negative covenants (subject,
in each case, to
exceptions and qualifications), and events of defaults, including covenants
that limit the Company's
ability to, among other things:
•
incur additional indebtedness;
•
create liens on its assets;
•
make investments, including loans and advances to foreign subsidiaries;
•
pay dividends and make other restricted payments;
•
sell certain assets outside of the ordinary course of business;
•
consolidate, merge, sell or otherwise dispose of all or substantially all of the Company's assets;
•
make acquisitions; and
•
enter into transactions with affiliates.
Restrictions relating to permitted acquisitions, permitted investments, prepayment
of other indebtedness,
and restricted payments are substantially less, or not applicable in
the case of restricted payments, if the
Company can satisfy the following payment conditions: (i) there is no default
or event of default under
the ABL Facility,
(ii) there are no revolving credit loans outstanding, (iii) the Loan Parties have
unrestricted cash of greater than $20 million, (iv) the Lender receives
at least three business days' prior
written notice of such event, including information about the estimated
date and amount of the payment
and a reasonable description of such event, and (v) Lender receives a
certificate certifying compliance
with the foregoing clauses and demonstrating the calculations required
thereby.
The description of the ABL Credit Agreement and ABL Facility set
forth herein is qualified in its entirety
by reference to the ABL Credit Agreement filed as Exhibit 10.1 hereto, which
is incorporated by
reference herein.
Item 1.02
Termination of a Material Definitive Agreement.
The information set forth in Item 1.01 of this Form 8-K is incorporated
by reference into this Item 1.02.
4
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet
Arrangement of a Registrant.
The information set forth in Item 1.01 of this Form 8-K is incorporated
by reference into this Item 2.03.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
Exhibit 10.1 - Press Release issued
Credit Agreement, dated as of March 13, 2025, by and among Wells
Fargo Bank, National Association, as Lender, and the Cato Corporation and certain of its subsidiaries as
Borrowers and certain of its other subsidiaries as Guarantors
Exhibit 104 – Cover Page Interactive Data File (embedded within Inline XBRL document)
5
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this
report to be signed on its behalf by the undersigned thereunto duly
authorized.
THE CATO
CORPORATION
March 19, 2025
/s/ John P.
D. Cato
Date
John P.
D. Cato
Chairman, President and
Chief Executive Officer
March 19, 2025
/s/ Charles D. Knight
Date
Charles D. Knight
Executive Vice President
Chief Financial Officer
6
Exhibit Index
Exhibit
Exhibit
No.
Exhibit 10.1 - Press Release issued
Credit Agreement, dated as of
March 13, 2025, by and among Wells Fargo Bank, National
Association, as Lender, and the Cato Corporation and certain of
its subsidiaries as Borrowers and certain of its other subsidiaries
as Guarantors
10.1
104
Cover page Interactive Data File (embedded within Inline
XBRL document)
104