Item 1.01 Entry into a Material Definitive Agreement.
The disclosure set forth in Item 2.03 below is incorporated in this Item 1.01 by
reference.
Item 2.02 Results of Operations and Financial Condition.
On January 19, 2023, Astronics Corporation issued a news release announcing
preliminary sales and bookings for the fourth quarter of 2022. A copy of the
press release is attached as Exhibit 99.1.
The information contained herein and in the accompanying exhibit shall not be
incorporated by reference into any filing of the registrant, whether made before
or after the date hereof, regardless of any general incorporation language in
such filing. The information in this report including the exhibit hereto, shall
not be deemed to be "filed" for purpose of Section 18 of the Securities Exchange
Act of 1934, as amended, or otherwise subject to the liabilities of that section
or Sections 11 and 12(a)(2) of the Securities Act of 1933, as amended.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
Astronics Corporation (the "Company") amended its existing credit facility on
January 19, 2023 by entering into the Sixth Amended and Restated Credit
Agreement (the "Restated Agreement"), with HSBC Bank USA, National Association,
as Agent and Co-Collateral Agent, Wells Fargo Bank, N.A., as Co-Collateral
Agent, and the lenders signatory thereto. The Restated Agreement set the maximum
aggregate amount that the Company can borrow under the revolving credit line at
$115 million, with borrowings subject to a borrowing base determined primarily
by inventory and accounts receivable. The Restated Agreement extended the
scheduled maturity date from November 30, 2023 to January 19, 2026. Under the
terms of the Restated Agreement, the Company will now pay interest on the unpaid
principal amount of the facility at a rate equal to SOFR (which shall be at
least 1.00%) plus 2.25% to 2.75%. The Company will pay a quarterly commitment
fee under the Restated Agreement in an amount equal to 0.25% or 0.375% based on
the Company's average excess availability.
The Company also entered into a $90 million asset-based term loan Credit
Agreement (the "Term Loan Agreement") on January 19, 2023, with Great Rock
Capital Partners Management, LLC, as Agent, and the lenders signatory thereto.
The Term Loan Agreement is secured primarily by fixed assets, real estate and
intellectual property. The maturity date of the Term Loan Agreement is January
19, 2027. The Company will pay interest under the Term Loan Agreement at a rate
equal to SOFR (which shall be at least 2.50%) plus 8.75%. The Company will pay a
commitment fee under the Term Loan Agreement of 5% of the total aggregate
commitment, 40% of which was paid on the closing date, 40% of which will be paid
on June 19, 2023 and 20% of which will be paid on the date that the financial
statements and compliance certificate for the fiscal quarter of the Company
ending on or about March 31, 2024 are required to be delivered under the Term
Loan Agreement.
Certain of the Company's subsidiaries are borrowers or guarantors under the
Restated Agreement and the Term Loan Agreement.
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Amortization of the principal under the Term Loan Agreement will begin in April
with a monthly amortization rate of 0.292% of the outstanding term loan
principal balance for the period April 1, 2023 through June 1, 2023, increasing
to 0.542% per month for the period July 1, 2023 through September 1, 2023 then
increasing to 0.833% thereafter.
Pursuant to the Restated Agreement and the Term Loan Agreement, the Company is
required to comply with a minimum trailing four quarter EBITDA of $14.7 million
for the Company's first quarter of 2023, $23.3 million in the second quarter,
$39.2 million in the third quarter, $51.7 million in the fourth quarter, $57.6
million in the first quarter of 2024, $65.2 million in the second quarter of
2024 and $70 million thereafter. The Company is also required to maintain
minimum liquidity of $20 million through the date of delivery of the compliance
certificate for the quarter ended March 31, 2024, and $10 million thereafter.
Beginning with the first quarter of 2024, the Company is subject to a minimum
fixed charge coverage ratio of 1.10 to 1.00. Further, the Company is subject to
restrictions on additional indebtedness and share repurchases, excess cash flow
repayment provisions and a limitation on capital expenditures.
The above description does not purport to be complete and is qualified in its
entirety by reference to the Restated Agreement, which is filed as Exhibit 10.1
to this Current Report on Form 8-K and incorporated herein by reference, and the
Term Loan Agreement, which is filed as Exhibit 10.2 to this Current Report on
Form 8-K and incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
Exhibit Description
Sixth Amended and Restated Credit Agreement dated as of January 19, 2023 by and
among Astronics Corporation, the other borrowers and guarantors signatory
thereto, HSBC Bank USA, National Association, as Agent and Co-Collateral Agent,
Wells Fargo Bank, N.A., as Co-Collateral Agent, and the lenders signatory
10.1 thereto
Credit Agreement dated as of January 19, 2023 by and among Astronics
Corporation, the other borrowers and guarantors signatory thereto,
Great Rock Capital Partners Management, LLC, as Agent and the lenders signatory
10.2 thereto
99.1 Press Release of Astronics Corporation dated January 19, 2023
104 Cover Page Interactive Data File (embedded within the Inline XBRL document).
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