Item 1.01 Entry into a Material Definitive Agreement
Effective January 15, 2021, BJ's Restaurants, Inc. ("the Company") entered into
an Amendment No. 2 and Waiver to Third Amended and Restated Credit Agreement
(the "Amendment") pursuant to which the Company further modified the Third
Amended and Restated Credit Agreement (the "Credit Agreement"), dated April 30,
2020, among Bank of America, N.A. ("BofA") (as the Administrative Agent, an L/C
Issuer and a Lender), JPMorgan Chase Bank, N.A. (as an L/C Issuer and a Lender),
certain other parties as Lenders, and BofA Securities, Inc. (as sole Lead
Arranger and sole Bookrunner). The Company previously modified the Credit
Agreement pursuant to an amendment dated June 15, 2020.
A general description of the Company's revolving line of credit (the "Line of
Credit") evidenced by the Credit Agreement, as amended, is set forth below. Such
description does not purport to be complete and is subject to, and qualified in
its entirety by, the full text of the Amendment and the related restated Credit
Agreement attached hereto as Exhibit 10.1.
Pursuant to the Amendment, the Line of Credit was reduced by $20,000,000 to
$215,000,000, certain changes were made to the Company's reporting requirements,
new financial covenants were introduced, and existing financial covenants were
reset. In consideration of the Lenders' agreement to enter into the January 2021
modification, the Company paid a fee of 12.5 basis points.
The Line of Credit may still be increased by up to $100,000,000 at the Company's
request, with the consent of the Administrative Agent and the agreement of one
or more Lenders, and upon satisfaction of certain criteria. The criteria now
includes an anti-cash hoarding condition prohibiting the Company from further
borrowing if the Company already is holding $35,000,000 in cash.
The Line of Credit continues to be guaranteed by the Company's subsidiaries and
secured by a pledge of the assets of the Company and its subsidiaries, subject
to the exclusions of certain assets such as all real property interests. The
Line of Credit may be used for working capital and other general corporate
purposes.
Borrowings under the Line of Credit continue to bear interest at an annual rate
equal to either (a) LIBOR plus a percentage not to exceed 3.00% (with a floor on
LIBOR of 1.00%), or (b) a percentage not to exceed 2.00% above a Base Rate equal
to the highest of (i) the Federal Funds Rate plus 1/2 of 1.00%, (ii) BofA's
Prime Rate, or (iii) one-month LIBOR plus 1.00%, in either case depending on the
level of lease and debt obligations of the Company as compared to EBITDA and
lease expenses. The Credit Agreement now includes provisions respecting the
potential elimination of LIBOR and the introduction of replacement index.
Pursuant to the Line of Credit, the Company will be required to pay certain
customary fees and expenses associated with maintenance and use of the Line of
Credit including letter of credit issuance fees and unused commitment fees.
Interest on the Line of Credit is payable monthly and the Line of Credit
expires, and all borrowings thereunder must be repaid, on or before November 18,
2022.
Under the Amendment, the financial covenants tested under the Line of Credit
have changed and certain short-term covenant relief has been given to the
Company. The fixed charge coverage ratio and the lease adjusted leverage ratio
will not be tested until after the third quarter of 2021, at which time they
will be tested based upon the earnings of the Company during the third quarter
of 2021. Under a new financial covenant, there will be a one-time test of the
earnings of the Company based upon results in May and June 2021. The financial
covenant pertaining to the liquidity of the Company will continue to be tested
monthly through December 2021, with the Company required to meet a monthly fixed
amount (which fixed amount declines each month through May 2021 and then
increases or stays level through December 2021). The Company is subject to
certain limits on capital expenditures for 2021 and 2022, with relief from the
spending limits being granted if the Company satisfies certain financial
covenant levels.
The Line of Credit, as amended, contains certain representations and warranties,
affirmative and negative covenants and events of default that are customary for
credit arrangements of this type, including covenants which, subject to
customary restrictions, restrict or limit the Company's ability to, among other
things, create liens, borrow money, pay dividends, conduct stock repurchases and
certain other transactions.
Item 2.02 Results of Operations and Financial Condition
On January 21, 2021, the Company issued a press release (the "Business Update
Press Release"), the full text of which is attached as Exhibit 99.1 to this
Current Report on Form 8-K and is incorporated by reference herein.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant
See disclosure contained in Item 1.01 above which is incorporated herein by this
reference.
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Item 8.01 Other Items
On January 21, 2021, the Company issued the Business Update Press Release
referred to in Item 2.02 above, the following sections of which are incorporated
by reference into this Item 8.01: "Business Update", "Preliminary Unaudited
Sales and Key Operating Results for the 2020 Fourth Quarter", and
"Forward-Looking Statements Disclaimer".
On January 21, 2021, the Company also issued a press release announcing an
"at-the-market" ("ATM") equity offering program, the full text of which is
attached as Exhibit 99.2 to this Current Report on Form 8-K and is incorporated
by reference herein.
Item 9.01 Exhibits
Exhibit
No. Description
10.1 Amendment No. 2 and Waiver to Third Amended and Restated Credit
Agreement, dated January 15, 2021, among the Company and Bank of
America, N.A. and the other lenders identified therein
99.1 Press Release dated January 21, 2021 (Business Update)
99.2 Press Release dated January 21, 2021 (ATM Offering)
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document)
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