UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
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CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 28, 2022
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DUTCH BROS INC.
(Exact name of registrant as specified in its charter)
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| | | | | | | | | | | |
| Delaware | 001-40798 | 87-1041305 |
(State or other jurisdiction of incorporation or organization) | (Commission
File Number) | (I.R.S. Employer Identification Number) |
| 110 SW 4th Street | | 97526 |
| Grants Pass, | Oregon | |
(Address of principal
executive offices) | | (Zip Code) |
(541) 955-4700
(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 |
Class A Common Stock,
par value $0.00001 per share | BROS | The 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.
Dutch Bros Inc. and subsidiaries (the “Company”) entered into an amendment and restatement of the credit agreement with JPMorgan Chase Bank, N.A. as administrative agent and other financial institutions as the lenders party thereto, dated May 12, 2021, on February 28, 2022 (the “Effective Date”) with JPMorgan Chase Bank, N.A., as administrative agent and other financial institutions as the lenders party thereto (the “2022 Credit Facility”). The 2022 Credit Facility provides the Company with up to $500 million in borrowing availability, on terms and conditions as described below.
The 2022 Credit Facility replaces the Company’s previous $350 million senior secured credit facility, which was entered into on May 12, 2021 (the “Senior Secured Credit Facility”). The 2022 Credit Facility expires five years after the Effective Date. The new facility contains a $250 million revolving credit facility, a term loan facility of up to $100 million, and a delayed draw term loan facility of up to $150 million. The revolving credit facility includes sublimits for issuance of letters of credit and swing line loans of up to $50 million and $15 million, respectively. It also contains an option allowing the Company to increase the size of the 2022 Credit Facility by up to an additional $150 million, with the agreement of the committing lenders.
Interest on borrowings under the 2022 Credit Facility is based on (a) the Alternate Base Rate plus an applicable margin, or (b) the Adjusted Term SOFR Rate plus an applicable margin, and is payable in accordance with the selected interest rate period (at least quarterly) and upon maturity. Principal payments for the term loans are required on a quarterly basis in accordance with an amortization schedule and upon certain disposition of assets.
The Company is required to pay a commitment fee on a quarterly basis, at a per annum rate of between 0.20% and 0.45% (depending on the Company’s maximum net lease-adjusted total leverage ratio) based on the (i) average daily unused portion of the revolving credit facility, and (ii) the daily undrawn amount of the delayed draw term loan facility.
The 2022 Credit Facility contains financial covenants that require the Company to not exceed a maximum net lease-adjusted total leverage ratio and maintain a minimum fixed charge coverage ratio. The 2022 Credit Facility also contains certain negative covenants that, among other things, restrict the Company’s ability to incur additional debt, grant liens on assets, merge with or acquire other companies, make other investments, dispose of assets, and enter into sale and leaseback transactions and swap agreements. Obligations under the 2022 Credit Facility are guaranteed by the Company, and secured by a first priority perfected security interest in substantially all of the assets of the guarantors.
On the Effective Date, the Company drew $100 million in term loans and approximately $30 million in revolving loans, and the Senior Secured Credit Facility was repaid and terminated.
The foregoing is a summary only and does not purport to be a complete description of all of the terms, provisions, and agreements contained in the 2022 Credit Facility, and is subject to and qualified in its entirety by reference to the complete text of the 2022 Credit Facility, a copy of which will be filed as an exhibit to the Company’s Annual Report on Form 10-K for the year ended December 31, 2021.
Item 2.02. Results of Operations and Financial Condition.
On March 1, 2022, the Company announced its financial results for the fourth quarter and year ended December 31, 2021. A copy of the press release issued in connection with the announcement is furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.
Item 7.01. Regulation FD Disclosure.
The information included in Item 2.02 of this Current Report on Form 8-K (including Exhibit 99.1) shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that Section, nor shall it be deemed incorporated by reference in any filing by the Company under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such a filing.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits
| | | | | | | | |
| Exhibit No. | | Description |
| | Earnings Release issued by Dutch Bros Inc. on March 1, 2022 |
| 104 | | Cover Page with Interactive Data File (formatted as Inline XBRL with applicable taxonomy extension information contained in Exhibits 101) |
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.
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| | | | DUTCH BROS INC. |
| | | | (Registrant) |
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| Date: | March 1, 2022 | | By: | /s/ Charles L. Jemley |
| | | | Charles L. Jemley |
| | | | Chief Financial Officer |
