ARC Document Solutions, Inc. (NYSE:ARC) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01
ARC Document Solutions, Inc. (NYSE:ARC) Files An 8-K Entry into a Material Definitive Agreement
On December 17, 2019, ARC Document Solutions, LLC, a wholly-owned subsidiary of ARC Document Solutions, Inc. (the “Company”), entered into an amendment (the “Amendment”) to its Credit Agreement, initially dated as of November 20, 2014 (the “Credit Agreement”) with Wells Fargo Bank, National Association, as administrative agent (the “Agent”), and the lenders party thereto.
The Amendment increases the maximum aggregate principal amount of revolving loans (“Revolving Loans”) under the Credit Agreement from $65 million to $80 million. Proceeds of a portion of the Revolving Loans available to be drawn under the Credit Agreement were used to fully repay the $49.5 million term loan that was outstanding under the Credit Agreement.
The Amendment reduced the rate of maximum interest rate margin capable of being paid on Revolving Loans under the Credit Agreement by 0.50%. Specifically, London Interbank Offered Rate (LIBOR) loans borrowed under the Credit Agreement will bear interest at a per annum rate equal to the applicable LIBOR rate, plus a margin ranging from 1.25% to 1.75%, based on the Company’s Total Leverage Ratio (as defined in the Credit Agreement). Loans borrowed under the Credit Agreement that are not LIBOR rate loans bear interest at a per annum rate equal to (i) the greatest of (A) the Federal Funds Rate plus 0.50%, (B) the one month LIBOR rate plus 1.00% per annum, and (C) the rate of interest announced, from time to time, by Wells Fargo Bank, National Association as its “prime rate,” plus (ii) a margin ranging from 0.25% to 0.75%, based on the Company’s Total Leverage Ratio.
The Amendment also modified the Total Leverage Ratio the Company is required to maintain under the Credit Agreement by decreasing it from 3.25 to 1.00 to 2.75 to 1.00.
The Amendment also modified certain tests the Company is required to meet in order to pay dividends, repurchase stock and make other restricted payments. In order to make such payments which are permitted subject to certain customary conditions set forth in the Credit Agreement, including compliance with a fixed charge coverage ratio (from which the Company may exclude up to $10 million of such payments that would otherwise constitute fixed charges in any twelve month period), the amount of all such payments will be limited to $15 million during any twelve-month period and the Company must meet a minimum liquidity test of at least $10 million based upon a combination of Revolving Loan availability and unrestricted, unencumbered cash and cash equivalents.
A copy of the Amendment is filed as Exhibit 10.1 hereto and is incorporated herein by reference. The above description of the Amendment contained herein is qualified in its entirety by the full text of such exhibit.
On December 19, 2019, the Company announced that its Board of Directors declared an annual cash dividend of $0.04 per share of common stock, payable quarterly. The first quarterly dividend of $0.01 per share will be payable February 28, 2020 to shareholders of record as of January 31, 2020. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
ARC DOCUMENT SOLUTIONS, INC. Exhibit
EX-10.1 2 arc-exhibit101amendmenttoc.htm EXHIBIT 10.1 Exhibit Exhibit 10.1SIXTH AMENDMENT TO CREDIT AGREEMENTThis SIXTH AMENDMENT TO CREDIT AGREEMENT (this “Amendment”),…
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EX-10.1 2 arc-exhibit101amendmenttoc.htm EXHIBIT 10.1 Exhibit Exhibit 10.1SIXTH AMENDMENT TO CREDIT AGREEMENTThis SIXTH AMENDMENT TO CREDIT AGREEMENT (this “Amendment”),…
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hereAbout ARC Document Solutions, Inc. (NYSE:ARC)
ARC Document Solutions, Inc. (ARC) is a document solutions provider for the architectural, engineering and construction (AEC) industry. The Company also provides document solutions to businesses of various types. ARC’s offerings include managed print services (MPS), offsite services, archive and information management (AIM), specialized color printing, Web-based document management applications, digital shipping/managed file transfer, and equipment and supplies sales. MPS is an onsite service where it installs a complete document solution platform in its customers’ offices and project sites. Its Offsite Services offering operates over 180 offsite service centers. AIM enables its customers to store information and intellectual property in a cloud-based and searchable digital archive. The Specialized Color Printing offering is focused on color printing, finishing and assembly of graphic materials. Its Web-Based Document Management Applications develop and offer tools to its customers.
