Escalade Incorporated filed SEC Form 8-K: Entry into a Material Definitive Agreement, Creation of a Direct Financial Obligation, Financial Statements and Exhibits

false 0000033488 0000033488 2024-10-11 2024-10-11

 

 

 

 

 

 

 

 

 

 

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Item 1.01 – Entry into a Material Definitive Agreement

 

 

On October 11, 2024, Escalade, Incorporated (the “Company”) and its wholly owned subsidiary, Indian Industries, Inc. (“Indian”), entered into the Fifth Amendment (the “Fifth Amendment”) to the Amended and Restated Credit Agreement dated as of January 21, 2022 among the Company, Indian, their domestic subsidiaries, the lenders party thereto (the “Lenders”), and JPMorgan Chase Bank, N.A., as Administrative Agent and as a Lender (the “Credit Agreement”). This Form 8-K describes the primary changes made to the Credit Agreement upon entry into the Fifth Amendment.

 

The Fifth Amendment eliminated the fixed charge coverage ratio covenant and related provisions. The fixed charge ratio covenant was replaced by a new minimum interest coverage ratio covenant of 3.50 to 1:00 effective September 30, 2024. Under the terms of the Fifth Amendment, the Company and the Lenders also agreed to decrease the maximum availability under the senior revolving credit facility from $75.0 million to $60.0 million, but added an accordion feature that could increase the facility in an amount not to exceed $85.0 million.

 

In addition to the changes in covenants and availability, other significant changes reflected in the Fifth Amendment include: eliminating two categories in the definition of Applicable Rate which has the effect of improved pricing to Escalade in the event the Funded Debt to EBITDA Ratio would exceed 3:0 to 1.0; revising the restricted payments covenant to provide that if at any time Escalade’s Funded Debt to EBITDA Ratio would exceed 1.75 to 1.0, then the aggregate combined total of cash dividends and Escalade share repurchases may not exceed $12.0 million in any trailing twelve month period; and Escalade now will provide borrowing base certificates and supporting financial information on monthly basis instead of quarterly.

 

The maturity date of the revolving credit facility remains January 21, 2027. The Company may prepay the Revolving Facility, in whole or in part, and reborrow prior to the revolving loan maturity date. The Company’s indebtedness under the Credit Agreement continues to be collateralized by liens on all of the present and future equity of each of the Company’s and Indian’s domestic subsidiaries and substantially all of the assets of the Company (excluding real estate). Each direct and indirect domestic subsidiary of the Company and Indian has secured its guaranty of indebtedness incurred under the revolving facility with a first priority security interest and lien on all of such subsidiary’s assets. The obligations, guarantees, liens and other interests granted by the Company, Indian, and their domestic subsidiaries continues in full force and effect.

 

 

 

 

 

 

 

Pursuant to the requirements of the Securities Exchange Act of 1934, Escalade, Incorporated has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.