IES Holdings, Inc. (NASDAQ:IESC) Files An 8-K Entry into a Material Definitive Agreement
Item1.01.
| Entry into a Material Definitive Agreement. |
On April10, 2017, IES Holdings, Inc., a Delaware corporation (IES
or the Company), entered into the Second Amended and Restated
Credit and Security Agreement (the Amended Credit Agreement), by
and among the Company, each of the other borrowers and guarantors
named therein and Wells Fargo Bank, National Association.
to the Amended Credit Agreement, the Companys maximum revolver
amount increased from $70million to $100million, and the maturity
date of the revolving credit facility was extended from August9,
2019 to August9, 2021. The Amended Credit Agreement also modified
the Companys financial covenants by, among other items,
implementing a new covenant that requires the Company to maintain
a minimum EBITDA (as defined in the Amended Credit Agreement)
that will be tested quarterly on a trailing twelve month basis;
increasing the minimum liquidity requirement applicable to the
Company from 12.5% to 30% of the maximum revolver amount; raising
the Companys required fixed charge coverage ratio (the FCCR) to
1.1:1.0 from 1.0:1.0; and requiring that the FCCR be tested
quarterly regardless of the Companys liquidity levels. In
addition, the Amended Credit Agreement modified the amount
available under the revolving credit facility by increasing the
availability related to progress-billed receivables that may be
included in the Companys borrowing base from $25million to
$40million, while reducing the credit on these receivables from
80% to 75%.
The Amended Credit Agreement also eliminated provisions related
to the structured overadvance amount and early termination
premium, increased the aggregate cap on Company investments in
certain securities from $10million to $20million, and permitted
the Company to invest up to $10million of that amount in
non-marketable securities, provided for the inclusion of certain
real estate in the borrowing base, and allowed for a one time
increase in restricted payments to permit the Company to make
stock repurchases in connection with satisfaction of employee tax
withholding obligations on performance-based phantom stock due to
vest in 2018. The Amended Credit Agreement continues to contain
other customary affirmative, negative and financial covenants as
well as events of default.
The representations and warranties of the borrowers party to the
Amended Credit Agreement were made only for purposes of that
agreement and as of specific dates therein and were solely for
the benefit of the lender party thereto. The Amended Credit
Agreement is a contractual document that establishes and governs
the legal relations among the parties thereto and is not intended
to be a source of factual, business, or operational information
about the Company or its subsidiaries. The representations and
warranties made by the borrowers party to the Amended Credit
Agreement may be subject to standards of materiality applicable
to the contracting parties that differ from those applicable to
investors. Accordingly, investors and security holders should not
rely on such representations and warranties as characterizations
of the actual state of facts or circumstances.
The foregoing description of the Amended Credit Agreement does
not purport to be complete and is qualified in its entirety by
reference to the Amended Credit Agreement, which is attached
hereto as Exhibit 10.1 and incorporated herein by reference.
Certain statements in this Current Report on Form 8-K may be
deemed forward-looking statements within the meaning of Section
27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934, all of which are based upon
various estimates and assumptions that the Company believes to be
reasonable as of the date hereof. In some cases, you can identify
forward-looking statements by terminology such as may, will,
could, should, expect, plan, project, intend, anticipate,
believe, seek, estimate, predict, potential, pursue, target,
continue, the negative of such terms or other comparable
terminology. These statements involve risks and uncertainties
that could cause the Companys actual future outcomes to differ
materially from those set forth in such statements. Such risks
and uncertainties include, but are not limited to, the ability of
our controlling shareholder to take action not aligned with other
shareholders; the possibility that certain tax benefits of our
net operating losses may be restricted or reduced in a change in
ownership; the potential recognition of valuation allowances on
net deferred tax assets; the inability to carry out plans and
strategies as expected, including our inability to identify and
complete acquisitions that meet our investment criteria in
furtherance of our corporate strategy; competition in the
industries in which we operate, both from third parties and
former employees, which could result in the loss of one or more
customers or lead to lower margins on new projects; fluctuations
in operating activity due to downturns in levels of construction,
seasonality and differing regional economic conditions; and our
ability to successfully manage projects, as well as other risk
factors discussed in this document and in the Companys annual
report on Form 10-K for the year ended September30, 2016. You
should understand that such risk factors could cause future
outcomes to differ materially from those experienced previously
or those expressed in such forward-looking statements. The
Company undertakes no obligation to publicly update or revise any
information, including information concerning its controlling
shareholder, net operating losses, borrowing availability, or
cash position, or any forward-looking statements to reflect
events or circumstances that may arise after the date of this
release. Forward-looking statements are provided in this Current
Report on Form 8-K to the safe harbor established under the
Private Securities Litigation Reform Act of 1995 and should be
evaluated in the context of the estimates, assumptions,
uncertainties, and risks described herein. General information
about IES Holdings, Inc. can be found at
http://www.ies-co.com under Investors. The Companys annual
report on Form 10-K, quarterly reports on Form 10-Q and current
reports on Form 8-K, as well as any amendments to those reports,
are available free of charge through the Companys website as soon
as reasonably practicable after they are filed with, or furnished
to, the Securities and Exchange Commission.
| Item2.03. | Creation of a Direct Financial Obligation. |
The information set forth under Item1.01 above is hereby
incorporated by reference into this Item2.03.
| Item7.01. | Regulation FD Disclosure. |
On April 10, 2017, the Company issued a press release announcing
its entry into the Amended Credit Agreement, as more fully
described in Item 1.01 above.
The information in this Item 7.01 of this Current Report on Form
8-K, including Exhibit 99.1 furnished herewith, is being
furnished and shall not be deemed filed for purposes of Section
18 of the Exchange Act of 1934, or otherwise subject to the
liabilities of Section 18, and shall not be incorporated by
reference in any filing under the Securities Act of 1933 or the
Exchange Act of 1934, except as set forth by specific reference
in such filing.
| Item9.01. | Financial Statements and Exhibits. |
(d) Exhibits.
|
Exhibit Number |
Description |
|
| Exhibit 10.1 |
Second Amended and Restated Credit and Security Agreement, dated as of April10, 2017, by and among IES Holdings, Inc., each of the other Borrowers and Guarantors named therein and Wells Fargo Bank, National Association. |
|
| Exhibit99.1 | Press release dated April10, 2017. |
About IES Holdings, Inc. (NASDAQ:IESC)
IES Holdings, Inc., formerly Integrated Electrical Services, Inc., is a holding company that owns and manages diverse operating subsidiaries across a range of infrastructure-related end markets. The Company operates through four segments: Communications, Residential, Commercial & Industrial, and Infrastructure Solutions. The Communications segment provides network infrastructure services for data centers and other mission critical environments. The Residential segment provides electrical installation services for single-family housing and multi-family apartment complexes and cable television installations for residential and light commercial applications. The Commercial & Industrial segment provides electrical and mechanical design, construction, and maintenance services to the commercial and industrial markets. The Company’s Infrastructure Solutions segment provides electro-mechanical solutions for industrial operations to domestic and international customers. IES Holdings, Inc. (NASDAQ:IESC) Recent Trading Information
IES Holdings, Inc. (NASDAQ:IESC) closed its last trading session up +0.10 at 18.95 with 61,662 shares trading hands.