ASTRONOVA, INC. (NASDAQ:ALOT) Files An 8-K Entry into a Material Definitive Agreement
Item1.01
| Entry into a Material Definitive Agreement. |
The information set forth in Item 2.03 below is incorporated
herein by reference.
| Item2.03 |
Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. |
On February28, 2017, AstroNova, Inc. (the Company) entered into a
Credit Agreement (the Credit Agreement) with Bank of America,
N.A., as lender (the Lender), ANI ApS, a Danish private limited
liability company and wholly-owned subsidiary of the Company
(ANI), and Trojanlabel ApS, a Danish private limited liability
company and wholly-owned subsidiary of ANI (Trojanlabel), and the
Company entered into a related Security and Pledge Agreement (the
Security Agreement) with the Lender.
The Credit Agreement provides for a term loan to ANI in the
amount of $9,200,000 and a $10,000,000 revolving credit facility
available to the Company for general corporate purposes;
revolving credit loans may be borrowed, at the Companys option,
in U.S. Dollars or, subject to certain conditions, Euros, British
Pounds, Canadian Dollars or Danish Krone. The revolving credit
facility includes a sublimit for the issuance of letters of
credit. ANI borrowed the entire term loan at closing. No amount
was drawn under the revolving credit facility at closing.
The term loan is required to be paid in quarterly installments on
or about the last business day of each fiscal quarter of the
Company over the term of the Credit Agreement, commencing with
its fiscal quarter ending on April29, 2017. The principal amount
of each quarterly installment required to be paid in the Companys
fiscal year ending January31, 2018 is $276,000; the principal
amount of each quarterly installment required to be paid in the
Companys fiscal year ending January31, 2019 is $368,000; the
principal amount of each quarterly installment required to be
paid in the Companys fiscal year ending January31, 2020 is
$460,000; the principal amount of each quarterly installment
required to be paid in the Companys fiscal year ending January31,
2021 is $552,000; the principal amount of each quarterly
installment required to be paid in the Companys fiscal year
ending January31, 2022 (other than the installment required to be
paid on January31, 2022) is $644,000; the entire remaining
principal balance of the term loan is required to be paid on
January31, 2022. The Company may voluntarily prepay the term
loan, in whole or in part, from time to time without premium or
penalty (other than customary breakage costs, if applicable). The
Company may repay borrowings under the revolving credit facility
at any time without premium or penalty (other than customary
breakage costs, if applicable), but in any event no later than
January31, 2022, and any outstanding revolving loans thereunder
will be due and payable in full, and the revolving credit
facility will terminate, on such date. The Company may reduce or
terminate the revolving line of credit at any time, subject to
certain thresholds and conditions, without premium or penalty.
The loans are subject to certain mandatory prepayments, subject
to various exceptions, from (a)net cash proceeds from certain
dispositions of property, (b)net cash proceeds from certain
issuances of equity, (c)net cash proceeds from certain issuances
of additional debt and (d)net cash proceeds from certain
extraordinary receipts.
Amounts repaid under the revolving credit facility may be
reborrowed, subject to continued compliance with the Credit
Agreement. No amount of the term loan that is repaid may be
reborrowed.
The term loan bears interest under the Credit Agreement at a rate
per annum equal to the LIBOR Rate (as defined in the
Credit Agreement) plus a margin that varies within a range of
1.0% to 1.5% based on the Companys consolidated leverage ratio.
See below for a discussion of certain hedging arrangements
entered into by ANI with respect to the term loan.
Amounts borrowed under the revolving credit facility bear
interest at a rate
per annum equal to, at the Companys option, either
(a)the LIBOR Rate (or in the case of revolving credit loans
denominated in a currency other than U.S. Dollars, the applicable
quoted rate), plus a margin that varies within a range of 1.0% to
1.5% based on the Companys consolidated leverage ratio, or (b)a
fluctuating reference rate equal to the highest of (i)the federal
fund rate plus 0.50%, (ii) Bank of Americas publicly announced
prime rate or (iii)the LIBOR Rate plus 1.00%, plus a margin that
varies within a range of 0.0% to 0.5% based on the Companys
consolidated leverage ratio. In addition to certain other fees
and expenses that the Company is required to pay to the Lender,
the Company is required to pay a commitment fee on the undrawn
portion of the revolving credit facility at the rate of 0.25%
per annum.
The Company must comply with various customary financial and
non-financial covenants under the Credit Agreement. The financial
covenants consist of a maximum consolidated leverage ratio and a
minimum consolidated fixed charge coverage ratio. The Credit
Agreement contains limitations, in each case subject to various
exceptions and thresholds as set forth therein, on the Companys
and its subsidiaries ability to incur future indebtedness, to
place liens on assets, to pay dividends or distributions on their
capital stock, to repurchase or acquire their capital stock, to
conduct mergers or acquisitions, to sell assets, to alter their
capital structure, to make investments and loans, to change the
nature of their business, and to prepay subordinated
indebtedness. The Credit Agreement permits the Company to pay
cash dividends on and repurchase its common stock, subject to
certain limitations.
The Lender is entitled to accelerate repayment of the loans and
to terminate its revolving credit commitment under the Credit
Agreement upon the occurrence of any of various customary events
of default, which include, among other events, the following
(which are subject, in some cases, to certain grace periods):
failure to pay when due any principal, interest or other amounts
in respect of the loans, breach of any of the Companys covenants
or representations under the loan documents, default under any
other of the Companys or its subsidiaries significant
indebtedness agreements, a bankruptcy, insolvency or similar
event with respect to the Company or any of its subsidiaries, a
significant unsatisfied judgment against the Company or any of
its subsidiaries, or a change of control of the Company.
ANIs obligations in respect of the term loan are guaranteed by
the Company and Trojanlabel. The Companys obligations in respect
of the revolving credit facility and its guarantee in respect of
the term loan are secured by substantially all of the assets of
the Company (including a pledge of a portion of the equity
interests held by the Company in ANI and the Companys
wholly-owned German subsidiary AstroNova GmbH), subject to
certain exceptions.
In connection with the Credit Agreement, ANI entered into certain
hedging arrangements with Bank of America to manage the variable
interest rate risk and currency risk associated with its payments
in respect of the term loan. These arrangements were documented
using an industry standard contract known as an International
Swaps and Derivative Association, Inc. (ISDA) Master Agreement,
together with a Schedule to the Master Agreement and certain
related agreements. Under these arrangements, payments of
principal and interest in respect of approximately $8.9 million
of the principal of the term loan will be made in Danish Krone,
and interest on such principal amount will be payable at a fixed
rate of 0.67% per annum for the entire term, subject
only to potential increases of 0.25% or 0.50% per annum
based on the Companys consolidated leverage ratio. ANIs
obligations under these arrangements are guaranteed by the
Company.
| Item1.02 |
Termination of a Material Definitive Agreement. |
The information set forth in Item 8.01 below is incorporated
herein by reference.
| Item8.01 | Other Events. |
In connection with the Companys entry into the Credit Agreement,
on February28, 2017 the Company terminated its existing Credit
Agreement, dated as of September5, 2014, among the Company, as
borrower, and Wells Fargo Bank, National Association (the
Existing Credit Agreement). No loans or other amounts were
outstanding or owed under the Existing Credit Agreement at the
time of termination.
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. ASTRONOVA, INC. (NASDAQ:ALOT) Recent Trading Information
ASTRONOVA, INC. (NASDAQ:ALOT) closed its last trading session down -0.20 at 13.30 with 4,167 shares trading hands.