POWELL INDUSTRIES, INC. (NASDAQ:POWL) Files An 8-K Entry into a Material Definitive AgreementItem 1.01 Entry into a Material Definitive Agreement.
On June 27, 2017, Powell Industries, Inc., a Delaware corporation (the "Company"), together with certain of its direct subsidiaries, entered into the Third Amendment of their Credit Agreement (the "Third Amendment"), which amends the Company's Credit Agreement with Bank of America, N.A., as administrative agent (the "Administrative Agent"), dated December 31, 2013 (as amended by that certain First Amendment to Credit Agreement dated as of March28, 2014 and that certain Second Amendment to Credit Agreement dated as of December 31, 2014). The Third Amendment is effective April 1, 2017.
The Third Amendment, among other things, (i) amends the definition of Applicable Rate by (a) removing Pricing Level 3, (b) providing that Pricing Level I shall apply whenever a Cash Collateral Period (described below) is in effect and that Pricing Level II shall apply whenever no Cash Collateral Period is in effect, (c) decreasing the Letter of Credit Fee percentage for Pricing Level I from 1.00% to 0.875% and (d) increasing the Commitment Fee percentage for both Pricing Level I and Pricing Level II from 0.1875% to 0.20%; (ii) extends the Maturity Date from December 2018 to June 2022; (iii) adds a new requirement for the Company to maintain, during any Cash Collateral Period, a cash balance in a pledged cash collateral account equal to at least 102% of the Outstanding Amount of Revolving Loans and Letter of Credit Obligations and (iv) modifies the Financial Covenants by, among other things, requiring that, during any Cash Collateral Period, the Consolidated Current Ratio be no less than 1.10 to 1.0. The Company’s ability to pay dividends remains subject to financial covenant restrictions.
Generally, a Cash Collateral Period under the Third Amendment means each fiscal quarter during which the Company has pledged its cash collateral account to the Administrative Agent. The initial Cash Collateral Period is deemed to have commenced as of April 1, 2017 (although the Company's initial obligation to cause its cash collateral account to meet the applicable funding requirements commenced on June 27, 2017). A Cash Collateral Period will terminate on the last day of the fiscal quarter in which the Company satisfies the Level II Pricing Covenants set forth in the Third Amendment for two consecutive fiscal quarters (commencing no earlier than the two consecutive fiscal quarters ending September 30, 2017 and December 31, 2017), provided that at any time the Company is not in compliance with the Level II Pricing Covenants, a Cash Collateral Period will begin.
The foregoing summary of the Third Amendment does not purport to be complete and is qualified in its entirety by reference to the Third Amendment, which is filed as Exhibit 10.1 to this Current Report on Form 8-K.
Item 9.01 – Financial Statements and Exhibits.
(d) Exhibits. The following exhibit is furnished as part of this Report.
Third Amendment to Amended Credit Agreement
POWELL INDUSTRIES INC ExhibitEX-10.1 2 thirdamendmenttocreditagre.htm EXHIBIT 10.1 Exhibit Exhibit 10.1THIRD AMENDMENT TO CREDIT AGREEMENTTHIS THIRD AMENDMENT TO CREDIT AGREEMENT (this “Amendment”) is entered into this 27th of June 2017,…To view the full exhibit click
About POWELL INDUSTRIES, INC. (NASDAQ:POWL)
Powell Industries, Inc. develops design, manufactures and services custom-engineered equipment and systems for the distribution, control and monitoring of electrical energy designed to distribute, control and monitor the flow of electrical energy, and provide protection to motors, transformers and other electrically powered equipment. The Company’s principal products include integrated power control room substations (PCRs), custom-engineered modules, electrical houses (E-Houses), traditional and arc-resistant distribution switchgear and control gear, medium-voltage circuit breakers, monitoring and control communications systems, motor control centers and bus duct systems. These products are designed for application voltages ranging from 480 volts to 38,000 volts, and are used in oil and gas refining, offshore oil and gas production, petrochemical, pipeline, terminal, mining and metals, light rail traction power, electric utility, pulp and paper, and other heavy industrial markets.