Marcus Corporation filed SEC Form 8-K: Entry into a Material Definitive Agreement, Creation of a Direct Financial Obligation, Other Events, Financial Statements and Exhibits
$MCS
Movies/Entertainment
Consumer Discretionary
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
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Item 1.01. Entry into a Material Definitive Agreement.
On July 9, 2024, The Marcus Corporation (the “Company”) entered into a Master Note Purchase Agreement (the “Agreement”) with the several purchasers party to the Agreement, pursuant to which the Company issued and sold (i) $60 million in aggregate principal amount of the Company’s 6.89% Series 2024 Senior Notes, Tranche A due July 9, 2031 (the “6.89% Notes”), and (ii) $40 million in aggregate principal amount of the Company’s 7.02% Series 2024 Senior Notes, Tranche B due July 9, 2034 (the “7.02% Notes” and, together with the 6.89% Notes, the “Notes”) in private placements exempt from the registration requirements of the Securities Act of 1933, as amended. The Company will use the net proceeds of the sale of the Notes to repay outstanding indebtedness and for general corporate purposes.
Interest on the Notes is payable semi-annually in arrears on the 9th day of January and July in each year, commencing on January 9, 2025, and on the applicable maturity date for the Notes. The Company will make required prepayments of principal on the dates and in the amounts specified in the Agreement. The Company may make optional prepayments, at any time, upon prior notice, of all or part of the Notes, subject to the payment of a make-whole amount (as defined in the Agreement). The entire outstanding principal balance of the 6.89% Notes will be due and payable on July 9, 2031 and the entire outstanding principal balance of the 7.02% Notes will be due and payable on July 9, 2034.
The Agreement contains various restrictions and covenants applicable to the Company and certain of its subsidiaries. Among other requirements, the Agreement requires the Company to maintain (i) a ratio of consolidated net debt (as defined in the Agreement) to consolidated EBITDA (as defined in the Agreement) of 3.50 to 1.00 or less, with some temporary exceptions for material acquisitions, and (ii) a minimum ratio of consolidated EBITDA to consolidated interest expense (as defined in the Agreement) for each period of four consecutive fiscal quarters (determined as of the last day of each fiscal quarter) of 3.00 to 1.00 or more.
The Agreement also contains customary events of default. If an event of default under the Agreement occurs and is continuing, then, among other things, the purchasers may declare the Notes to be immediately due and payable. In addition, in the case of an event of default arising from certain events of bankruptcy, insolvency or reorganization, the Notes will automatically become immediately due and payable.
The Company and certain of its subsidiaries have pledged, and additional subsidiaries of the Company may be required to pledge from time to time, subject to certain exceptions, security interests and liens in and on substantially all of their respective personal property assets and certain of their respective real property assets, in each case, to secure the Notes and related obligations. Certain subsidiaries of the Company have guaranteed, and additional subsidiaries of the Company may be required to guarantee from time to time, the Company’s obligations under the Agreement and the Notes.
The foregoing description of the Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Agreement, filed herewith as Exhibit 4.1, and incorporated herein by reference.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The information provided in Item 1.01 of this Current Report on Form 8-K is hereby incorporated by reference into this Item 2.03.
Item 8.01. Other Events.
On July 15, 2024, the Company issued a press release announcing the Agreement and discussing the previously disclosed and soon to be completed repurchases and retirement of $86.4 million of aggregate principal amount of senior convertible notes. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
Item 9.01.Financial Statements and Exhibits.
(a)Not applicable.
(b)Not applicable.
(c)Not applicable.
(d)Exhibits. The following exhibit is being furnished herewith:
Exhibit Number | |||||
| 4.1 | |||||
| 99.1 | |||||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | ||||
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
THE MARCUS CORPORATION | ||||||||
Date: July 15, 2024 | By: | /s/ Chad M. Paris | ||||||
Chad M. Paris | ||||||||
Chief Financial Officer and Treasurer | ||||||||