Carrols Restaurant Group, Inc. (NASDAQ:TAST) Files An 8-K Entry into a Material Definitive Agreement
ITEM 1.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
On December 13, 2019, Carrols Restaurant Group, Inc. (the "Company") and certain subsidiaries of the Company (collectively, the "Guarantors") entered into the First Amendment to Credit Agreement (the First Amendment") with Wells Fargo Bank, National Association (the "Administrative Agent"), as administrative agent, and the lenders party thereto, as further described in "Item 2.03. Creation of a Direct Financial Obligation or an Obligation Under an Off-Balance Sheet Arrangement of a Registrant" which is incorporated by reference in this Item 1.01.
ITEM 2.03. CREATION OF A DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION UNDER AN OFF-BALANCE SHEET ARRANGEMENT OF A REGISTRANT.
On December 13, 2019, the Company and the Guarantors entered into the First Amendment. The First Amendment amends the Credit Agreement dated as of April 30, 2019 among the Company, the Guarantors, the Administrative Agent and the lenders party thereto (the "Credit Agreement"). The Company proactively amended its Credit Agreement to provide for additional leverage ratio covenant capacity. The Company believes the terms of the Credit Agreement as amended by the First Amendment reflect terms currently provided to other similarly rated restaurant borrowers.
The First Amendment amended a financial covenant under the Credit Agreement applicable solely with respect to the Revolving Facility (as defined in the Credit Agreement) that previously required the Company to maintain quarterly a Total Net Leverage Ratio (as defined in the Credit Agreement) of not greater than 4.75 to 1.00 (measured on a most recent four quarter basis), to now require that the Company maintain only a First Lien Leverage Ratio (as defined in the Credit Agreement) of not greater than 5.75 to 1.00 (as measured on a most recent four quarter basis) if, and only if, on the last day of any fiscal quarter (beginning with the fiscal quarter ended December 29, 2019), the sum of the aggregate principal amount of outstanding revolving credit borrowings under the Revolving Facility and the aggregate face amount of letters of credit issued under the Revolving Facility (excluding undrawn letters of credit in an aggregate face amount up to $12.0 million) exceeds 35% of the aggregate amount of the maximum revolving credit borrowings under the Revolving Facility. The First Amendment also reduced the aggregate maximum revolving credit borrowings under the Revolving Facility by $10.0 million to a total of $115.0 million. As previously disclosed by the Company in its Quarterly Report on Form 10-Q for the quarter ended September 29, 2019, the Company was in compliance at September 29, 2019 with the covenants under the Credit Agreement without giving effect to the First Amendment (including, without limitation, the Total Net Leverage Ratio covenant thereunder which was 4.02 to 1.00 at September 29, 2019).
The foregoing summary is qualified in its entirety by reference to the First Amendment, a copy of which is attached hereto as Exhibit 10.1 and incorporated herein by reference.
Item 9.01. FINANCIAL STATEMENTS AND EXHIBITS.
(d) Exhibits
| 10.1 | First Amendment to Credit Agreement dated as of December 13, 2019 among Carrols Restaurant Group, Inc., the guarantors named therein, Wells Fargo Bank, National Association, as administrative agent, and the lenders party thereto. |
CARROLS RESTAURANT GROUP, INC. Exhibit
EX-10.1 2 f8k121319ex10-1_carrolsrest.htm FIRST AMENDMENT TO CREDIT AGREEMENT DATED AS OF DECEMBER 13,…
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About Carrols Restaurant Group, Inc. (NASDAQ:TAST)
Carrols Restaurant Group, Inc. is a holding company. The Company conducts all of its operations through its direct and indirect subsidiaries. The Company operates in the hamburger category of the quick-service restaurant segment of the restaurant industry. The Company is a Burger King franchisee in the United States and operates its restaurants under the Burger King trade name. The Company owns and operates approximately 705 Burger King restaurants located in over 20 Northeastern, Midwestern and Southeastern states, such as Illinois, Indiana, Kentucky, Maine, Massachusetts, Michigan, New Jersey, New York, North Carolina, Ohio, Pennsylvania, South Carolina, Tennessee, Vermont, Virginia and West Virginia. Burger King restaurants feature the Whopper sandwich, as well as a range of hamburgers, chicken and other sandwiches, French fries, salads, breakfast items, hot dogs, snacks, smoothies, frappes and other offerings. Its subsidiaries include Carrols LLC and Carrols Corporation.