0000915358-18-000012.txt : 20180717 0000915358-18-000012.hdr.sgml : 20180717 20180717143750 ACCESSION NUMBER: 0000915358-18-000012 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20180716 ITEM INFORMATION: Entry into a Material Definitive Agreement ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20180717 DATE AS OF CHANGE: 20180717 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SIGMATRON INTERNATIONAL INC CENTRAL INDEX KEY: 0000915358 STANDARD INDUSTRIAL CLASSIFICATION: PRINTED CIRCUIT BOARDS [3672] IRS NUMBER: 363918470 STATE OF INCORPORATION: DE FISCAL YEAR END: 0430 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-23248 FILM NUMBER: 18956285 BUSINESS ADDRESS: STREET 1: 2201 LANDMEIER RD CITY: ELK GROVE VILLAGE STATE: IL ZIP: 60007 BUSINESS PHONE: 847-956-8000 MAIL ADDRESS: STREET 1: 2201 LANDMEIER ROAD CITY: ELK GROVE VILLAGE STATE: IL ZIP: 60007 8-K 1 sgma-20180716x8k.htm 8-K 8-K (US Bank 071618)





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



July 16, 2018

Date of Report (Date of earliest event reported)

___________________________________

SIGMATRON INTERNATIONAL, INC.

(Exact name of registrant as specified in its charter)





 

 

Delaware

0-23248

36-3918470

(State or other jurisdiction of

(Commission

(I.R.S. Employer

incorporation)

File Number)

Identification No.)



2201 Landmeier Road, Elk Grove Village, Illinois 60007

(Address of principal executive offices)                                           (Zip Code)



(847) 956-8000

(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:



 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))



Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2). 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.



On July 16, 2018, the Company and U.S. Bank entered into an amendment of the revolving credit facility.  The amended revolving credit facility allows the Company to borrow up to the lesser of (i) $45,000,000 less reserves or (ii) 90% of the Company’s Borrowing Base, except that the 90% limitation will expire if the Company’s actual revolving loans for the first 90 days after the amendment’s effective date are less than 80% of the Company’s Borrowing Base and the Company maintains a Fixed Charge Coverage Ratio of 1.2 to 1.0 for four consecutive quarters.  The amendment also imposes sublimits on categories or inventory equal to $17.5 Million on raw materials, $25 Million on finished goods identified but not yet delivered to customers.



ITEM 9.01.Financial Statements and Exhibits.



(d)Exhibits.



Exhibit No.

 

Description

 

 

 

Exhibit 10.1

 

Amendment No. 1 to Amended and Restated Loan and Security Agreement entered into as of July 16, 2018, by and between SigmaTron International, Inc., and U.S. Bank National Association.




 

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.





SIGMATRON INTERNATIONAL, INC.

 

July 17, 2018

By:

/s/ Gary R. Fairhead



 

Name:  Gary R. Fairhead



 

Title:  President and Chief Executive Officer




EX-10.1 2 sgma-20180716xex10_1.htm EX-10.1 Exhibit 101 (US Bank 071618)

Exhibit 10.1

AMENDMENT NO. 1 TO
AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT

This AMENDMENT NO. 1 TO AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT (this "Amendment") is entered into as of July 16, 2018, by and among U.S. Bank National Association, as Bank ("Bank"), and SigmaTron International, Inc., a Delaware corporation ("Borrower").

W I T N E S S E T H:

WHEREAS, Borrower and Bank are parties to that certain Amended and Restated Loan and Security Agreement dated as of December 21, 2017 (as amended, restated, supplemented or otherwise modified from time to time, the "Credit Agreement"; capitalized terms used herein and not otherwise defined herein shall have the respective meanings given to them in the Credit Agreement);

WHEREAS, Borrower has requested that Bank amend the Credit Agreement to, among others, increase the aggregate Revolving Commitment from $35,000,000 to $45,000,000, and Bank is willing to do so on the terms and subject to the conditions set forth herein;

NOW, THEREFORE, in consideration of the mutual agreements, provisions and covenants contained herein, the parties hereto agree as follows:

1.    Amendments to Credit Agreement. In reliance upon the representations and warranties of Borrower set forth in Section 2 below and subject to the conditions to effectiveness set forth in Section 3 below, the Credit Agreement is hereby amended as follows:

(a)    Section 1.1 of the Credit Agreement is hereby amended by inserting the following new defined terms in their appropriate alphabetical order as follows:

"Availability Covenant Testing Period" means the period commencing on the First Amendment Effective Date and ending on the first date following the First Amendment Effective Date that each of the following conditions have been satisfied: (i) Bank has received the financial statements required under Section 6.1(c) hereof, together with a Compliance Certificate, evidencing that the Fixed Charge Coverage Ratio for the period of four consecutive fiscal quarters most recently ended is greater than or equal to 1.20 to 1.00, and (ii) average daily Availability is at least an amount equal to 20% of the Revolving Line Cap for ninety (90) consecutive days.

"First Amendment" means that certain Amendment No. 1 to Amended and Restated Loan and Security Agreement, dated as of the First Amendment Effective Date, by and among Borrower, Bank and the other Credit Parties party thereto.

"First Amendment Effective Date" means July 16, 2018.


 

"Revolving Line Cap" means, as of any date of determination, the lesser of (i) the Revolving Commitment and (ii) the Borrowing Base.

(b)    The defined term "Borrowing Base" set forth in Section 1.1 of the Credit Agreement is hereby amended to amend and restate clause (b) thereof in its entirety as follows:

    (b)    the lesser of (1) sixty-five percent (65%) of the book value of Eligible Inventory valued at the lower of cost or market on a first-in, first-out basis, or (2) eighty-five percent (85%) of the book value of Eligible Inventory valued at the lower of cost or market multiplied by the then current NOLV Factor; provided, that in no event shall the Availability created under this clause (b) exceed (i) $10,500,000 with respect to Eligible Inventory consisting of raw materials, (ii) $10,000,000 with respect to Eligible Inventory consisting of finished goods, or (iii) $28,000,000 with respect to all Eligible Inventory;

(c)    The defined term "Eligible Inventory" set forth in Section 1.1 of the Credit Agreement is hereby amended to replace the reference to the amount "$7,000,000" set forth in the proviso to clause (d) of the definition thereof with a reference to the amount "$4,500,000".

(d)    The defined term "Eligible Inventory" set forth in Section 1.1 of the Credit Agreement is hereby further amended to replace the reference to the amount "$3,000,000" set forth in subclause (ii) of clause (f) of the definition thereof with a reference to the amount "$1,500,000".

(e)    The defined term "Revolving Commitment" set forth in Section 1.1 of the Credit Agreement is hereby amended to amend and restate the second sentence thereof in its entirety as follows:

The amount of the Revolving Commitment as of the First Amendment Effective Date (after giving effect to the First Amendment) is $45,000,000.

(f)    Section 8 of the Credit Agreement is hereby amended to insert a new Section 8.2 at the end thereof as follows:

8.2    Minimum Availability.  At all times during the Availability Covenant Testing Period, Borrower will not permit Availability to be less than an amount equal to 10% of the Revolving Line Cap for five (5) consecutive Business Days.

2.    Representations and Warranties.  Borrower hereby represents and warrants to Bank that as of the date hereof:

(a)    The execution, delivery and performance of this Amendment has been duly authorized by all requisite corporate action on the part of Borrower;

(b)    No Default or Event of Default has occurred and is continuing or shall be caused by the transactions contemplated by this Amendment; and

-2-


 

(c)    The representations and warranties set forth in the Credit Agreement, as amended hereby, and in the other Loan Documents, as amended to date, are true and correct in all material respects as of the date hereof, with the same effect as though made on the date hereof (except to the extent such representations and warranties expressly refer to an earlier date, in which case they are true and correct in all material respects as of such earlier date).

3.    Conditions Precedent to Effectiveness. The effectiveness of this Amendment is subject to the prior or concurrent consummation of each of the following conditions:

(a)    Bank shall have received a copy of this Amendment executed by Borrower, together with each other agreement, certificate and other deliverable set forth on the Closing Checklist (other than those items designated as "Post-Closing Matters") attached hereto as Exhibit A; and

(b)    No Default or Event of Default shall have occurred or be continuing after giving effect to this Amendment.

4.    Post-closing Obligations.  Within thirty (30) days following the date hereof (or such later date agreed to by Bank), Borrower shall deliver to Bank an amendment, in form and substance reasonably satisfactory to Bank and reflecting the increase to the Revolving Commitment contemplated by this Amendment, to the Mortgages in respect of the Real Estate located at 2201 Landmeier Road, Elk Grove Village, IL 60007 and 1901 South St., Elgin, IL 60123, respectively, together with a date-down endorsement to each existing mortgagee title policies for such Real Estate in form and substance reasonably satisfactory to Agent.

5.    Miscellaneous.

(a)    Governing Law.  THIS AMENDMENT SHALL BE SHALL BE CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (WITHOUT REGARD TO THE CONFLICT OF LAWS PROVISIONS) OF THE STATE OF ILLINOIS, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.

(b)    Counterparts.  This Amendment may be executed in any number of counterparts, and by the parties hereto on the same or separate counterparts, and each such counterpart, when executed and delivered, shall be deemed to be an original, but all such counterparts shall together constitute but one and the same Amendment.  Delivery of an executed counterpart of this Amendment by facsimile, .pdf or other similar method of electronic transmission shall be equally effective as delivery of a manually executed counterpart.

(c)    Reference to Credit Agreement.  Each reference in the Credit Agreement to "this Agreement," "hereunder," "hereof," "herein" or words of like import, and each reference in the Credit Agreement or in any other Loan Documents, or other agreements, documents or other instruments executed and delivered pursuant to the Credit Agreement, shall mean and be a reference to the Credit Agreement as amended by this Amendment.

-3-


 

(d)    Costs and Expenses.  Borrower acknowledges that Section 10.3 of the Credit Agreement applies to this Amendment and the transactions, agreements and documents contemplated hereunder.

[Signature Page Follows]



 

-4-


 

 

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered by their duly authorized officers as of the date first above written.



 

 

 

BORROWER:

 



SIGMATRON INTERNATIONAL, INC.



 

 



 

 



By:

/s/ Linda K. Frauendorfer



 

Name:  Linda K. Frauendorfer



 

Title:  Chief Financial Officer



 

 



 

 



U.S. BANK NATIONAL ASSOCIATION,



as Bank



 

 



 

 



By:

/s/ Steven Gonzalez



 

Name:  Steven Gonzalez



 

Title:  Authorized Officer



Signature Page to Amendment No. 1 to Amended and Restated Loan and Security Agreement