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
Date of Report (Date of earliest event reported) April 14, 2020 (April 14, 2020)
CALERES, INC.
(Exact name of registrant as specified in its charter)
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New York | | 1-2191 | | 43-0197190 |
(State or other jurisdiction of incorporation or organization) | | (Commission File Number) | | (IRS Employer Identification Number) |
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8300 Maryland Avenue St. Louis, Missouri | | 63105 |
(Address of principal executive offices) | | (Zip Code) |
(314) 854-4000
(Registrant's telephone number, including area code)
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(s) | Name of each exchange on which registered |
Common Stock - par value of $0.01 per share | CAL | New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company 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.
On April 14, 2020, Caleres, Inc. (the “Company”) and certain of its subsidiaries (Sidney Rich Associates, Inc., BG Retail, LLC, Allen Edmonds LLC, Vionic International LLC and Vionic Group LLC (collectively with the Company, the “Borrowers”)) entered into a Fourth Amendment to Fourth Amended and Restated Credit Agreement dated as of April 14, 2020 (the “Amendment”) with a group of lenders named in the Credit Agreement (as hereinafter defined) (collectively, the “Lenders”) and Bank of America, N.A., as administrative agent and collateral agent. The Amendment amended the Fourth Amended and Restated Credit Agreement, dated as of December 18, 2014 (as amended, the “Credit Agreement”). The Credit Agreement matures on January 18, 2024.
The Amendment, among other modifications to the Credit Agreement, increases the amount of the senior secured revolving credit facilities available to the Borrowers by $100.0 million to an aggregate amount of up to $600.0 million, subject to the calculated borrowing base restrictions, which may be further increased by up to $150.0 million (which may be further increased to account for excess borrowing base), from time to time during the term of the Credit Agreement, subject to the approval of the lenders assuming a portion thereof. As of April 14, 2020, the Company had approximately $440.0 million of credit extensions outstanding (including outstanding letters of credit), and approximately $160.0 million available for borrowing, under the Credit Agreement.
Interest on borrowings is at variable rates based on the LIBOR rate (with a floor of 1.00% imposed by the Amendment) or the prime rate, as defined in the Credit Agreement, plus a spread based upon the level of “excess availability” under the Credit Agreement (i.e., the excess, if any, of (a) the lesser of the then Loan Cap, over (b) the outstanding credit extensions). There is an unused line fee payable on the excess availability under the facility and a letter of credit fee payable on the outstanding exposure under letters of credit. The Amendment increased the spread applied to the LIBOR rate or the prime rate by a total of 75 basis points and increases the unused line fee by 5 basis points. The Amendment also restricts the ability of the Borrowers to draw upon amounts available under the Credit Agreement in excess of $450.0 million if the draw would cause the Borrowers to have greater than $60.0 million in the aggregate in its deposit accounts.
In addition, certain additional covenants would be triggered if excess availability were to fall below specified levels, including fixed charge coverage ratio requirements. Furthermore, if excess availability falls below the greater of 10.0% of the Loan Cap and $48.0 million (increased from $40.0 million by the Amendment) for three consecutive business days or an event of default occurs, the collateral agent may assume dominion and control over the Company’s cash (a “cash dominion event”) until such event of default is cured or waived or the excess availability exceeds such amount for 30 consecutive days, provided that a cash dominion event shall be deemed continuing (even if an event of default is no longer continuing and/or excess availability exceeds the required amount for thirty (30) consecutive business days) after a cash dominion event has occurred and been discontinued on two (2) occasions in any twelve (12) month period.
The foregoing description is only a summary and is qualified in its entirety by reference to the full text of the Credit Agreement, a copy of which is attached hereto as Exhibit 10.1 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 above in response to Item 1.01 is hereby incorporated by reference into this Item 2.03.
Item 9.01 Financial Statements and Exhibits
SIGNATURE
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.
| | CALERES, INC. |
| | | (Registrant) |
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Date: April 14, 2020 | /s/ Thomas C. Burke |
| | | Thomas C. Burke |
| | | Vice President, General Counsel and Secretary |
