Matrix Service Company (NASDAQ:MTRX) Files An 8-K Entry into a Material Definitive AgreementItem 1.01
Entry into a Material Definitive Agreement.
On August 31, 2017, Matrix Service Company (the “Company”) entered in to that certain First Amendment to Fourth Amended and Restated Credit Agreement (the “First Amendment”), by and among the Company and certain foreign subsidiaries, as Borrowers (collectively, the “Borrowers”), various subsidiaries of the Company, as Guarantors (collectively, the “Guarantors”), JPMorgan Chase Bank, N.A., as Administrative Agent, Lead Arranger and Sole Bookrunner (“JPMC”), and the other Lenders party thereto. The First Amendment amended that certain Fourth Amended and Restated Credit Agreement dated as of February 8, 2017, by and among the Borrowers, the Guarantors, JPMC and the other Lenders party thereto.
The First Amendment provided the following:
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The maximum permitted Leverage Ratio was temporarily increased to 4.00 to 1.00 for the quarters ending September 30, 2017 and December 31, 2017. The maximum permitted Leverage Ratio will revert back to 3.00 to 1.00 beginning with the quarter ending March 31, 2018. |
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The Fixed Charge Coverage Ratio will not be tested for the quarters ending September 30, 2017 and December 31, 2017, but will be in effect and tested quarterly thereafter beginning with the quarter ending March 31, 2018. |
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A new minimum Consolidated EBITDA covenant was added solely for the four-quarter period ending December 31, 2017. For this period, the Company is required to achieve Consolidated EBITDA of at least $15.0 million. |
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The restricted payment covenant was amended to restrict cash dividends and share repurchases during the period beginning August 31, 2017 and ending December 31, 2017 to an aggregate amount of no more than $5.0 million. In addition, during such period, both cash dividends and share repurchases are prohibited unless the pro forma Leverage Ratio is less than or equal to 2.50 to 1.00. Thereafter, the restriction reverts back to limiting dividends to 50% of net income for each fiscal year, and limiting share repurchases to $30.0 million per calendar year. |
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An additional increased pricing tier was added for the "Covenant Relief Period" beginning on August 31, 2017 and ending on the date the Company delivers its financial statements and compliance certificate for the fiscal quarter ending December 31, 2017, if such compliance certificate demonstrates compliance with the financial covenants. If the Company’s Leverage Ratio, as of any quarterly calculation date during the Covenant Relief Period, exceeds 3.00 to 1.00: (1) the Applicable Margin on ABR loans will be 1.875%; (2) the Applicable Margin for Adjusted LIBO, EURIBO and CDOR loans will be 2.875%; (3) the Applicable Margin for Canadian Prime Rate loans will be 3.375%; and (4) the unused credit facility fee will be 0.50%. |
About Matrix Service Company (NASDAQ:MTRX)
Matrix Service Company provides engineering, fabrication, infrastructure, construction and maintenance services primarily to the oil, gas, power, petrochemical, industrial, mining and minerals markets. The Company’s segments include Electrical Infrastructure, Oil Gas & Chemical, Storage Solutions and Industrial. The Electrical Infrastructure segment primarily includes construction and maintenance services to a range of power generation facilities, such as combined cycle plants, natural gas fired power stations and renewable energy installations. The Oil Gas & Chemical segment includes turnaround activities, plant maintenance services and construction in the downstream petroleum industry. The Storage Solutions segment includes new construction of crude and refined products aboveground storage tanks (ASTs), as well as planned and emergency maintenance services. The Industrial segment includes construction and maintenance work in the iron and steel and mining and minerals industries.
