ASTRONOVA, INC. (NASDAQ:ALOT) Files An 8-K Entry into a Material Definitive AgreementItem 1.01
Asset Purchase and License Agreement
On September28, 2017, AstroNova, Inc. (the “Company”) entered into an Asset Purchase and License Agreement (the “Agreement”) with Honeywell International, Inc. (“Honeywell”), to which the Company acquired an exclusive perpetual world-wide license to manufacture Honeywell’s narrow-format flight deck printers for two aircraft families (the “Product Line”) along with certain inventory and equipment used in the manufacturing and certain contracts for an initial total purchase price of $15million (the “Initial Purchase Price”). The Initial Purchase Price includes an upfront payment of $14.6million in cash and a second payment of $400,000 upon completion of the manufacturing transition. The Company financed the Initial Purchase Price paid at closing using borrowings under its existing revolving credit facility discussed in more detail below. The Agreement also provides for the assumption of certain liabilities, royalty payments based on gross revenues from the sales in the Product Line of the printers, paper and repair services, with minimum total royalty payments equal to $15million in the aggregate, to be paid over the next ten years, and additional contingent royalties based on percentages of the Company’s gross revenues from the sales in the Product Line of the printers, paper, and repair service. The royalty rates vary based on the year in which they are paid or earned and the product sold or service provided and range from single digit to mid double digit percentages of gross revenue. The foregoing description of the material terms of the Agreement does not purport to be complete and is subject to, and is qualified in its entirety by, reference to the full terms of the Agreement which is filed as Exhibit 10.1 to this Current Report on Form 8-K and incorporated herein by reference.
In connection with the Agreement, the Company also entered into a Transition Services Agreement with Honeywell related to the transition over the next several months of the manufacturing of the Honeywell printers from its current location in Asia to AstroNova’s plant in West Warwick, Rhode Island.
Amendment to Credit Facility
In connection with the Agreement and the payment of the Initial Purchase Price, on September28, 2017, the Company entered into the First Amendment (the “First Amendment”) to the Credit Agreement dated as of February27, 2017 by and among the Company and ANI APS, as borrowers, Trojan Label APS, as guarantor, and Bank of America, N.A. as Lender (the “Credit Agreement”). The First Amendment amends the Credit Agreement to permit the purchase of the Product Line, add collateral securing the Company’s obligations under the Credit Agreement, and temporarily increase the amount available for borrowing under the revolving credit line from $10,000,000 to $15,000,000. The foregoing description of the material terms of the First Amendment does not purport to be complete and is subject to, and is qualified in its entirety by, reference to the full terms of the First Amendment which is filed as Exhibit 10.2 to this Current Report on Form 8-K and incorporated herein by reference.
| Item 1.01 | Completion of Acquisition or Disposition of Assets |
The information set forth in Item 1.01 of this Current Report on Form 8-K regarding the entry into the Asset Purchase and License Agreement is incorporated into this Item 1.01 by reference.
| Item 1.01 | 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 Current Report on Form 8-K regarding the entry into the First Amendment to the Credit Agreement is incorporated into this Item 1.01 by reference.
| Item 1.01 | Financial Statements and Exhibits |
(d) Exhibits
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ExhibitNo. |
Description |
| *10.1 | Asset Purchase and License Agreement, dated September28, 2017, by and between AstroNova, Inc. and Honeywell International, Inc. |
| 10.2 | First Amendment to the Credit Agreement, dated September28, 2017, by and among AstroNova, Inc., ANI APS, Trojan Label APS and Bank of America, N.A. |
* Material has been omitted to a request for confidential treatment and such material has been filed separately with the Securities and Exchange Commission.
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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 hereunto duly authorized.
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ASTRONOVA, INC. |
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| Dated:October 4, 2017 | By: | /s/ Gregory A. Woods |
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Gregory A. Woods President and Chief Executive Officer |
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EXHIBIT INDEX
| *10.1 | Asset Purchase and License Agreement, dated September28, 2017, by and between AstroNova, Inc. and Honeywell International, Inc. |
| 10.2 | First Amendment to the Credit Agreement, dated September28, 2017, by and among AstroNova, Inc., ANI APS, Trojan Label APS and Bank of America, N.A. |
* Material has been omitted AstroNova, Inc. ExhibitEX-10.1 2 d443813dex101.htm EX-10.1 EX-10.1 Exhibit 10.1 EXECUTION COPY 9/28/2017 HONEYWELL CONFIDENTIAL ASSET PURCHASE AND LICENSE AGREEMENT BY AND BETWEEN ASTRONOVA,…To view the full exhibit click here
About ASTRONOVA, INC. (NASDAQ:ALOT)
AstroNova, Inc., formerly Astro-Med, Inc., designs, develops, manufactures and distributes a range of specialty printers, and data acquisition and analysis systems. The Company operates through two segments: QuickLabel and Test & Measurement (T&M). The Company offers both hardware and software, which incorporate technologies in order to acquire, store, analyze and present data in multiple formats. It sells specialty printing systems, and test and measurement systems under the brand names, including QuickLabel. The QuickLabel segment offers product identification and label printer hardware, software, servicing contracts and consumable products. The T&M segment offers a suite of products and services that acquire and record visual and electronic signal data from local and networked sensors, as well as wired and wireless networks. It serves markets, such as aerospace, apparel, automotive, avionics, chemicals, computer peripherals, communications, distribution, and food and beverage.
