esca20220720

0001437749-22-017525.txt : 20220721 0001437749-22-017525.hdr.sgml : 20220721 20220721160526 ACCESSION NUMBER: 0001437749-22-017525 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 14 CONFORMED PERIOD OF REPORT: 20220718 ITEM INFORMATION: Entry into a Material Definitive Agreement ITEM INFORMATION: Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20220721 DATE AS OF CHANGE: 20220721 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ESCALADE INC CENTRAL INDEX KEY: 0000033488 STANDARD INDUSTRIAL CLASSIFICATION: [3949] IRS NUMBER: 132739290 STATE OF INCORPORATION: IN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-06966 FILM NUMBER: 221097114 BUSINESS ADDRESS: STREET 1: 817 MAXWELL AVE. CITY: EVANSVILLE STATE: IN ZIP: 47711 BUSINESS PHONE: 812-467-4449 MAIL ADDRESS: STREET 1: 817 MAXWELL AVE. CITY: EVANSVILLE STATE: IN ZIP: 47711 FORMER COMPANY: FORMER CONFORMED NAME: MARTIN YALE BUSINESS MACHINES CORP DATE OF NAME CHANGE: 19820310 FORMER COMPANY: FORMER CONFORMED NAME: MARTIN YALE INDUSTRIES INC DATE OF NAME CHANGE: 19720306 FORMER COMPANY: FORMER CONFORMED NAME: WILLIAMS MANUFACTURING CO DATE OF NAME CHANGE: 19710504 8-K 1 esca20220720_8k.htm FORM 8-K esca20220720_8k.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT PURSUANT

TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported) July 18, 2022

ESCALADE, INCORPORATED

(Exact Name of Registrant as Specified in Its Charter)

Indiana

(State or Other Jurisdiction of Incorporation)

0-6966	13-2739290
(Commission File Number)	(IRS Employer Identification No.)

817 Maxwell Avenue, Evansville, Indiana	47711
(Address of Principal Executive Offices)	(Zip Code)

(812) 467-1358

(Registrant’s Telephone Number, Including Area Code)

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol	Name of Exchange on which registered
Common Stock, No Par Value	ESCA	The NASDAQ Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 1.01 – Entry into a Material Definitive Agreement

Item 2.03 - Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

On July 18, 2022, Escalade, Incorporated (the “Company”) and its wholly owned subsidiary, Indian Industries, Inc. (“Indian”), entered into the First Amendment (the “First 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 First Amendment.

Under the terms of the First Amendment, the Lenders increased the maximum availability under the senior revolving credit facility from $65,000,000 to $75,000,000 pursuant to the accordion feature in the Credit Agreement. 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 First Amendment also adjusted the funded debt to EBITDA ratio financial covenant to 3:00 to 1:00 as of the end of the Company’s third and fourth fiscal quarters of 2022.

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.

Forward-Looking Statements

This report contains forward-looking statements relating to present or future trends or factors that are subject to risks and uncertainties. These risks include, but are not limited to: specific and overall impacts of the COVID-19 global pandemic on the Company’s financial condition and results of operations; the impact of competitive products and pricing; product demand and market acceptance; new product development; the Company’s ability to achieve its business objectives, especially with respect to its Sporting Goods business on which it has chosen to focus; the Company’s ability to successfully achieve the anticipated results of strategic transactions, including the integration of the operations of acquired assets and businesses and of divestitures or discontinuances of certain operations, assets, brands, and products; the continuation and development of key customer, supplier, licensing and other business relationships; the Company’s ability to develop and implement its own direct to consumer e-commerce distribution channel; the Company’s ability to successfully negotiate the shifting retail environment and changes in consumer buying habits; the financial health of the Company’s customers; disruptions or delays in the Company’s business operations, including without limitation disruptions or delays in its supply chain, arising from political unrest, war, labor strikes, natural disasters, public health crises such as the coronavirus pandemic, and other events and circumstances beyond its control; the Company’s ability to control costs; the Company’s ability to successfully implement actions to lessen the potential impacts of tariffs and other trade restrictions applicable to its products and raw materials, including impacts on the costs of producing its goods, importing products and materials into its markets for sale, and on the pricing of its products; general economic conditions; fluctuation in operating results; changes in foreign currency exchange rates; changes in the securities markets; continued listing of the Company’s common stock on the NASDAQ Global Market; the Company no longer being included in certain market indices such as the Russell 2000; the Company’s ability to obtain financing and to maintain compliance with the terms of such financing; the availability, integration and effective operation of information systems and other technology, and the potential interruption of such systems or technology; risks related to data security of privacy breaches; and other risks detailed from time to time in the Company’s filings with the Securities and Exchange Commission. The Company’s future financial performance could differ materially from the expectations of management contained herein. The Company undertakes no obligation to release revisions to these forward-looking statements after the date of this report.

Item 9.01 Financial Statements and Exhibits

(d) Exhibits

Exhibit	Description

10.1	First Amended dated July 18, 2022 to Amended and Restated Credit Agreement dated as of January 21, 2022 among Escalade, Incorporated, Indian Industries, Inc., each of their domestic subsidiaries, the lenders party thereto, and JPMorgan Chase Bank, N.A., as Administrative Agent

104	Cover Page Interactive Data File, formatted Inline Extensible Business Reporting Language (iXBRL)

SIGNATURES

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.

Date: July 21, 2022	ESCALADE, INCORPORATED

	By: /s/ STEPHEN R. WAWRIN

	Stephen R. Wawrin, Vice President and Chief Financial Officer

EX-10.1 2 ex_397702.htm EXHIBIT 10.1 ex_397702.htm

EXHIBIT 10.1

First Amendment To Amended and Restated Credit Agreement

By And Among

Escalade, Incorporated

And

Indian Industries, Inc.

And

The Other Loan Parties Hereto

And

The Lenders Party Hereto

And

JPMorgan Chase Bank, N.A.,
As Administrative Agent

Dated As Of July 18, 2022

First Amendment To Amended and Restated

Credit Agreement

This First Amendment To Amended and Restated Credit Agreement (this “First Amendment”) is made as of July 18, 2022, by and among Escalade, Incorporated, Indian Industries, Inc., the Other Loan Parties hereto, the Lenders party hereto and JPMorgan Chase Bank, N.A., as administrative agent (in such capacity, the “Administrative Agent”). The parties hereto agree as follows:

W I T N E S S E T H:

Whereas, as of January 21, 2022, the parties hereto entered into a certain Amended and Restated Credit Agreement (the “Agreement”); and

Whereas, the parties desire to amend the Agreement to, among other things, increase the Revolving Commitment and to amend certain definitions and covenants, subject to and as provided in this First Amendment;

Now, Therefore, in consideration of the premises, and the mutual promises herein contained, the parties agree that the Agreement shall be, and it hereby is, amended as provided herein and the parties further agree as follows:

Article I

Definitions

Section 1.01 Defined Terms. Section 1.01 of the Agreement is hereby amended by substituting the following definitions in lieu of the like existing definitions:

“Revolving Commitment” means, with respect to each Lender, the amount set forth on the Commitment Schedule opposite such Lender’s name, or in the Assignment and Assumption or other documentation or record (as such term is defined in Section 9-102(a)(70) of the New York Uniform Commercial Code) as provided in Section 9.04(b)(ii)(C), pursuant to which such Lender shall have assumed its Revolving Commitment, as applicable, as such Revolving Commitment may be reduced or increased from time to time pursuant to assignments by or to such Lender pursuant to Section 9.04; provided, that at no time shall the Revolving Exposure of any Lender exceed its Revolving Commitment. As of the First Amendment Effective Date, the aggregate amount of the Lenders’ Revolving Commitments is $75,000,000.

Section 1.01 Defined Terms. Section 1.01 of the Agreement is hereby further amended by adding the following new definitions to the Agreement:

“First Amendment Effective Date” means July 18, 2022.

First Amendment to Amended and Restated Credit Agreement

Page 1

Article VI

Negative Covenants

SECTION 6.12 Financial Covenants. Section 6.12 of the Agreement is hereby amended by substituting the following new clause (b) in lieu of the like existing clause (b):

(b) Funded Debt to EBITDA Ratio. The Loan Parties shall achieve a Funded Debt to EBITDA Ratio of not more than (i) 3.00 to 1.00 as of the end of each Fiscal Quarter from October 1, 2022 through December 31, 2022, and (ii) 2.75 to 1.00 as of the Fiscal Quarter ending March 31, 2023 and as of the end of each Fiscal Quarter thereafter, calculated as of the 12-month period then ended.

Part II. Continuing Effect

Except as expressly modified herein:

(a) All terms, conditions, representations, warranties and covenants contained in the Agreement shall remain the same and shall continue in full force and effect, interpreted, wherever possible, in a manner consistent with this First Amendment; provided, however, in the event of any irreconcilable inconsistency, this First Amendment shall control;

(b) The representations and warranties contained in the Agreement shall survive this First Amendment in their original form as continuing representations and warranties of Borrowers; and

(c) Capitalized terms used in this First Amendment, and not specifically herein defined, shall have the meanings ascribed to them in the Agreement.

In consideration hereof, each Borrower represents, warrants, covenants and agrees that:

(aa) Each representation and warranty set forth in the Agreement, as hereby amended, remains true and correct as of the date hereof in all material respects, except to the extent that such representation and warranty is expressly intended to apply solely to an earlier date and except changes reflecting transactions permitted by the Agreement;

(bb) There currently exist no offsets, counterclaims or defenses to the performance of the Obligations (such offsets, counterclaims or defenses, if any, being hereby expressly waived);

(cc) Except as expressly waived in this First Amendment, there does not exist any Default or Event of Default; and

(dd) After giving effect to this First Amendment and any transactions contemplated hereby, no Default or Event of Default is or will be occasioned hereby or thereby.

Part III. Independent Credit Decision

Each Lender acknowledges that it has, independently and without reliance upon the Administrative Agent or any other Lender, based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this First Amendment.

First Amendment to Amended and Restated Credit Agreement

Page 2

Part IV. Commitment Schedule

Subject to Part V hereof, the Agreement is hereby amended by substituting the Commitment Schedule attached hereto in lieu of the Commitment Schedule attached to the Agreement.

Part V. Conditions Precedent

Notwithstanding anything contained in this First Amendment to the contrary, this First Amendment shall not become effective until each of the following conditions precedent have been fulfilled to the satisfaction of the Administrative Agent:

(a) The Administrative Agent shall have received counterparts of this First Amendment, duly executed by the Administrative Agent, Borrowers, the Loan Guarantors and the Lenders;

(b) The Administrative Agent shall have received a Replacement Revolving Note, duly executed by Borrowers;

(d) The Administrative Agent shall have received a duly executed certificate of the Secretary of each Borrower and Guarantor (A) certifying as to the authorizing resolutions of such Borrower and Guarantor, and (B) certifying as complete and correct as to attached copies of its Articles of Incorporation and By‑Laws or Articles of Organization and Operating Agreement, as applicable, or certifying that such Articles of Incorporation or By‑Laws or Articles of Organization or Operating Agreement, as applicable, have not been amended (except as shown) since the previous delivery thereof to the Administrative Agent;

(e) The Administrative Agent shall have received such documentation and other information requested in connection with applicable “know your customer” and anti-money laundering rules and regulations, including the USA Patriot Act; and

(f) All legal matters incident to this First Amendment shall be reasonably satisfactory to the Administrative Agent and its counsel.

Part V. Expenses

The Borrowers agree to pay or reimburse the Administrative Agent for all reasonable expenses of the Administrative Agent (including, without limitation, reasonable attorneys’ fees) incurred in connection with this First Amendment. The Borrowers shall also pay all fees as set forth in that certain Fee Letter dated as of the First Amendment Effective Date.

First Amendment to Amended and Restated Credit Agreement

Page 3

Part VI. Counterparts

This First Amendment may be executed in any number of counterparts, each of which shall be an original, but all of which taken together shall constitute one and the same agreement. Delivery of an executed counterpart of this First Amendment by telefacsimile or other electronic method of transmission shall have the same force and delivery of an original executed counterpart of this First Amendment. Any party delivering an executed counterpart of this First Amendment by telefacsimile or other electronic method of transmission shall also deliver an original executed counterpart of this First Amendment, but the failure to do so shall not affect the validity, enforceability, and binding effect of this First Amendment.

In Witness Whereof, the parties hereto have caused this First Amendment to be executed by their respective officers duly authorized as of the date first above written.

[This Space Intentionally Left Blank]

First Amendment to Amended and Restated Credit Agreement

Page 4

Signature Page Of

Escalade, Incorporated

To First Amendment to Amended and Restated Credit Agreement

	Escalade, Incorporated


	By:	/s/ STEPHEN WAWRIN
		Stephen Wawrin, Chief Financial Officer

Signature Page Of

Indian Industries, Inc.

To First Amendment to Amended and Restated Credit Agreement

	Indian Industries, Inc.


	By:	/s/ STEPHEN WAWRIN
		Stephen Wawrin, Chief Financial Officer

CONSENT AND REAFFIRMATION

Each of the undersigned Loan Guarantors hereby consents to the foregoing First Amendment, and further agrees that the execution and delivery of such First Amendment shall in no way affect, impair, discharge, relieve or release the obligations of the undersigned under its Loan Guaranty, which obligations are hereby ratified, confirmed and reaffirmed in all respects and shall continue in full force and effect, until all obligations of the Borrowers to the Lenders, the Issuing Bank and the Administrative Agent are fully, finally and irrevocably paid and performed. Each Loan Guarantor further acknowledges that the failure to consent to any subsequent amendment shall not affect the liability of such Loan Guarantor under its Loan Guaranty. Capitalized terms used herein and not defined have the meanings ascribed thereto in the Agreement.

BEAR ARCHERY, INC.