UNIVERSAL ELECTRONICS INC. (NASDAQ:UEIC) Files An 8-K Entry into a Material Definitive AgreementItem 1.01Entry into a Material Definitive Agreement.
On October 27, 2017, Universal Electronics Inc. (the “Company”) entered into a Second Amended and Restated Credit Agreement (“Second Amended Credit Agreement”) with U.S. Bank National Association (“U.S. Bank”) as administrative agent, sole lead arranger and sole book runner, and Wells Fargo Bank, National Association, which replaces the Company’s existing Amended and Restated Credit Agreement with U.S. Bank. Under the Second Amended Credit Agreement, the existing revolving credit line (“Credit Line”) was increased from $125.0 million to $170.0 million and the expiration date remained November 1, 2019. The Credit Line may be used for working capital and other general corporate purposes including acquisitions, share repurchases and capital expenditures. At closing, there were outstanding borrowings of $125.0 million and no outstanding letters of credit under the Second Amended Credit Agreement.
Under the Second Amended Credit Agreement, the Company may elect to pay interest on the Credit Line based on LIBOR plus an applicable margin (varying from 1.25% to 1.75%) or base rate (based on the prime rate of U.S. Bank or as otherwise specified in the Second Amended Credit Agreement) plus an applicable margin (varying from 0.00% to 0.50%). The applicable margins are calculated quarterly and vary based on the Company’s cash flow leverage ratio as set forth in the Second Amended Credit Agreement. There are no commitment fees or unused line fees under the Second Amended Credit Agreement.
The Company may voluntarily prepay outstanding loans under the Credit Line, in whole or in part, at any time, subject to customary administrative provisions.
All obligations under the Credit Line are secured by substantially all of the U.S. personal property and tangible and intangible assets of the Company as well as 65% of the Company’s ownership interest in Enson Assets Limited, the Company’s wholly-owned subsidiary which controls the Company’s manufacturing factories in the People’s Republic of China.
The Second Amended Credit Agreement includes financial covenants requiring a minimum fixed charge coverage ratio, a maximum cash flow leverage ratio and minimum liquidity levels. In addition, the Second Amended Credit Agreement also contains other customary affirmative and negative covenants and events of default.
Item 1.01Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The information set forth above under Item 1.01 is hereby incorporated by reference into this Item 1.01.
About UNIVERSAL ELECTRONICS INC. (NASDAQ:UEIC)
Universal Electronics Inc. (UEI) develops control and sensor technology solutions and manufactures a line of pre-programmed and universal remote control products, audio-video (AV) accessories, and intelligent wireless security and automation components. The Company’s offerings include pre-programmed universal infrared (IR) and radio frequency (RF) remote controls that are sold primarily to subscription broadcasting providers, original equipment manufacturers (OEMs), retailers, and private label customers, and integrated circuits, on which its software and universal device control database is embedded, sold primarily to OEMs, subscription broadcasting providers, and private label customers. Its offerings also include software, firmware and technology solutions that enable devices, such as televisions, set-top boxes, stereos, smart phones tablets, gaming controllers and other consumer electronic devices to wirelessly connect and interact with home networks and interactive services.