EnerSys (NYSE:ENS) Files An 8-K Entry into a Material Definitive AgreementItem 2.03. Entry into a Material Definitive Agreement
On August 4, 2017, EnerSys entered into a new credit agreement with a syndicate of bank lenders, including Bank of America, N.A. (“BofA”), as Administrative Agent, Swing Line Lender and Letters of Credit Issuer (the “Credit Agreement”). The new credit agreement is comprised of a $600 million senior secured revolving credit facility (the “Revolving Credit Facility”) and a $150 million senior secured term loan credit facility (the “Term Loan Facility”, and together with the Revolving Credit Facility, the “Credit Facilities”). The Credit Agreement permits, subject to the satisfaction of certain conditions, incremental revolving and term facilities up to an aggregate amount of
$325 million plus the amount of certain voluntary prepayments plus additional amounts (if any) subject to achievement of a certain consolidated secured net leverage ratio. The Credit Agreement refinanced EnerSys’ existing credit agreement dated March 29, 2011 (and as amended from time to time), by and among EnerSys, various lending institutions, and BofA, as Administrative Agent.
Loans under each Credit Facility bear interest, at EnerSys’ option, at a rate per annum equal to either (i) the London Interbank Offering Rate (“LIBOR”) plus between 1.25% and 2.00%, based on EnerSys’ consolidated total net leverage ratio or (ii) the Base Rate (which is the highest of (a) the BofA prime rate, (b) the Federal Funds Effective Rate plus 0.5% and (c) LIBOR for an interest period of one month plus 1.0%) plus between 0.25% and 1.00%, based on EnerSys’ consolidated total net leverage ratio. A commitment fee based on EnerSys’ consolidated total net leverage ratio is payable on the unused portion of the Revolving Credit Facility quarterly, in arrears, and on the date of termination or expiration of the revolving commitments.
On the closing date, EnerSys borrowed $150 million under the Term Loan Facility and $214 million under the Revolving Credit Facility. The proceeds of the borrowing were used to repay all outstanding amounts under EnerSys’ existing credit agreement.
EnerSys’ obligations under the Credit Facilities are guaranteed on a senior secured basis by all of its material wholly-owned domestic subsidiaries. The obligations under the Credit Facilities are also secured by a first priority lien on substantially all of the assets of EnerSys and its material wholly-owned domestic subsidiaries, including 50% of the stock of material wholly-owned domestic subsidiaries and 65% of the stock of certain first tier foreign subsidiaries.
The Credit Agreement includes financial covenants that require EnerSys to maintain a maximum consolidated total net leverage ratio and a minimum interest coverage ratio. The Credit Agreement also includes customary negative covenants that, among other things, place limits on the ability of EnerSys and its subsidiaries to incur debt, grant liens, dispose of assets, carry out mergers and acquisitions, make investments and pay dividends or make other distributions to stockholders.
A copy of the new Credit Agreement is attached as Exhibit 10.1 hereto, and is incorporated herein by reference. The description of the Credit Facilities is a summary only and investors should refer to the Credit Agreement for full terms.
Item 2.03. Termination of a Material Definitive Agreement
The disclosure required by this Item 2.03 is included in Item 2.03 and is incorporated herein by reference.
Item 2.03. Results of Operations and Financial Condition
On August 9, 2017, EnerSys issued an earnings press release discussing its financial results for the first quarter of fiscal 2018. The press release, attached as Exhibit 99.1 hereto and incorporated herein by reference, is being furnished to the SEC and shall not be deemed to be "filed" for any purpose.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant
The disclosure required by this Item 2.03 is included in Item 2.03 and is incorporated herein by reference.
Item 2.03.Regulation FD Disclosure
EnerSys will be making several presentations, whereby it will disclose certain sales, market and other information. EnerSys is furnishing, as Exhibit99.2 hereto and incorporated herein by reference, such information to the SEC, and such information shall not be deemed to be “filed” for any purpose.
Item 2.03.Other Events
On August 9, 2017, EnerSys issued a press release announcing that its Board of Directors had declared a quarterly cash dividend of $0.175 per share, payable on September 29, 2017 to stockholders of record as of September 15, 2017. The press release, attached hereto as Exhibit 99.3, is incorporated herein by reference.
On August9, 2017, EnerSys’ also issued a press release announcing the establishment of a new $100 million stock repurchase authorization with no expiration date. The press release, attached hereto as Exhibit 99.4, is incorporated herein by reference.
Item 2.03. Financial Statements and Exhibits
(d) Exhibits
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10.1 |
Credit Agreement, dated as of August 4, 2017, among EnerSys, certain other borrowers and guarantors identified therein, Bank of America, N.A., as administrative agent, swing line lender and Letters of Credit issuer, and other lenders party thereto (incorporated herein by reference to Exhibit 10.4 of EnerSys’ Quarterly Report on Form 10-Q for the quarter ended July 2, 2017 (File No. 001-32253) filed with the SEC on August 9, 2017). |
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99.1 |
Press Release, dated August 9, 2017, of EnerSys regarding the financial results for the first quarter of fiscal 2018. |
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99.2 |
Information in presentations by EnerSys. |
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99.3 |
Press Release, dated August 9, 2017, of EnerSys regarding stock repurchase authorization and a quarterly cash dividend. |
(s)
EnerSys ExhibitEX-99.1 2 ens-07022017xex991_earning.htm EXHIBIT 99.1 Exhibit Exhibit 99.1 PRESS RELEASE,…To view the full exhibit click here
About EnerSys (NYSE:ENS)
EnerSys is a manufacturer, marketer and distributor of industrial batteries. The Company manufactures, markets and distributes related products, such as chargers, power equipment, outdoor cabinet enclosures and battery accessories, and provides related after-market and customer-support services for industrial batteries. Its segments based on geographic regions consist of Americas, which consists of North and South America; EMEA, which includes Europe, the Middle East and Africa, and Asia, which includes Asia, Australia and Oceania. The Company’s product lines include reserve power and motive power products. Its Reserve power products also include thermally managed cabinets and enclosures for electronic equipment and batteries. The Company’s motive power products are used to provide power for electric industrial forklifts used in manufacturing, warehousing and other material handling applications. They are used as mining equipment, diesel locomotive starting and other rail equipment.