UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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| Date of report (Date of earliest event reported): | December 13, 2019 |
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| KAMAN CORPORATION |
| (Exact name of registrant as specified in its charter) |
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| Connecticut | | 001-35419 | | 06-0613548 |
| (State or Other Jurisdiction of Incorporation) | | (Commission File Number) | | (IRS Employer Identification No.) |
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| 1332 Blue Hills Avenue, | Bloomfield, | Connecticut | | 06002 |
| (Address of principal executive offices) | | (Zip Code) |
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| (860) | 743-7100 |
(Registrant’s telephone number, including area code)
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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):
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| ☐ | 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:
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| Title of each class | | Trading Symbol | | Name of each exchange on which registered |
| Common Stock ($1 par value) | | KAMN | | New York Stock Exchange 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).
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| 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. |
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Item 1.01 Entry into a Material Definitive Agreement.
Credit Agreement
On December 13, 2019, Kaman Corporation (the “Company”) entered into the Second Amended and Restated Credit and Guaranty Agreement (“Second Amended and Restated Credit Agreement”), dated as of December 13, 2019, by and among the Company, RWG Germany GmbH (“RWG Germany”), Kaman Lux Holding, S.à r.l (“Kaman Lux”) and the other subsidiary borrowers from time to time party thereto (the “Subsidiary Borrowers” and, together with the Company, RWG Germany and Kaman Lux, the “Borrowers”), the Lenders from time to time party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent and as Collateral Agent. The Second Amended and Restated Credit Agreement amended and restated in its entirety that certain Credit Agreement, originally dated as of November 20, 2012 (as amended and restated, the “Existing Credit Agreement”), by and among the Company, RWG Germany, certain other subsidiary borrowers and lenders from time to time party thereto and JPMorgan Chase Bank, N.A., as administrative agent (in such capacity, the “Existing Agent”). Pursuant to the Second Amended and Restated Credit Agreement, the Existing Credit Agreement was amended and restated in its entirety to, among other things, (i) extend the maturity date to December 13, 2024; (ii) increase the aggregate amount of revolving commitments from $600 million to $800 million; (iii) remove the existing term loan credit facility; (iv) remove the ability to incur additional term loan commitments; (v) modify the affirmative and negative covenants set forth in Articles 5 and 6 of the Existing Credit Agreement; and (vi) effectuate certain additional modifications to the terms and provisions of the Existing Credit Agreement, including its pricing, as further described in the Second Amended and Restated Credit Agreement.
The terms of the Second Amended and Restated Credit Agreement include the following:
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| • | Revolving Credit Facility: An aggregate $800 million revolving credit facility which expires on December 13, 2024 and includes sublimits for the issuance of standby letters of credit, swingline loans and multicurrency borrowings in certain specified foreign currencies. |
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| • | Interest Rates and Fees: Revolving Loans incurred under the Second Amended and Restated Credit Agreement Facility will bear interest at the applicable Borrower’s option at either the Eurocurrency Rate plus a margin ranging from 1.125% to 1.625% per year or the Base Rate plus a margin ranging from 0.125% to 0.625% per year (such margins being referred to as the “Applicable Margin”). The Applicable Margin varies depending on the Company’s Senior Secured Net Leverage Ratio (as defined in the Second Amended and Restated Credit Agreement). The Eurocurrency Rate and the Base Rate are each subject to a zero percent floor. The Company will be charged a commitment fee ranging from 0.150% to 0.250% per year on the daily amount of unused portions of the Revolving Credit Commitments under the Second Amended and Restated Credit Agreement. Additionally, with respect to all letters of credit outstanding under the Second Amended and Restated Credit Agreement, the Company will be charged a fronting fee of 0.125% per year and a participation fee equal to the Applicable Margin for Eurocurrency Rate Loans multiplied by the amount available to be drawn under each letter of credit. |
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| • | Expansion Option: Provisions permitting the Company from time to time to increase the aggregate amount of the revolving credit facility by up to $200 million with additional commitments from the Lenders, as they may agree, or new commitments from financial institutions acceptable to the Administrative Agent and the Company in their reasonable discretion. |
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| • | Prepayment: Provisions permitting the Borrowers to prepay borrowings in whole or in part at any time without premium or penalty, subject to reimbursement of certain costs of the Lenders, and permitting the Company to cancel, in whole or in part, the unutilized portion of the commitments under the revolving credit facility in excess of the outstanding loans, the stated amount of all outstanding letters of credit and all unreimbursed amounts drawn under any letters of credit. |
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| • | Financial Covenants: The Second Amended and Restated Credit Agreement requires compliance with certain financial covenants, including a maximum total net leverage ratio and a minimum interest coverage ratio, both of which are further described in the Second Amended and Restated Credit Agreement and will be tested on a quarterly basis. The Second Amended and Restated Credit Agreement also includes a minimum liquidity requirement, as further described in the Second |
Amended and Restated Credit Agreement, which will be tested on the last day of the fiscal quarter ending on or about September 30, 2023, on the last day of the fiscal quarter ending December 31, 2023 and on the last day of the fiscal quarter ending on or about March 29, 2024.
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| • | Other Covenants: The Second Amended and Restated Credit Agreement includes various other covenants that, among other restrictions, limit the Company’s and its subsidiaries’ ability to incur or assume indebtedness; grant or assume liens; make acquisitions or engage in mergers; sell, transfer, assign or convey assets; repurchase equity and make dividend and certain other restricted payments; make investments; engage in transactions with affiliates; enter into sale and leaseback transactions; enter into burdensome agreements; change the nature of its business; modify their organizational documents; and amend or make prepayments on certain junior debt. |
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| • | Events of Default: Provisions providing that upon the occurrence of an event of default under the Second Amended and Restated Credit Agreement, the lenders may, among other remedies, terminate the revolving commitments and accelerate the maturity of the Borrowers’ outstanding obligations thereunder. |
The Second Amended and Restated Credit Agreement is secured by the tangible and intangible personal property and other assets (excluding real estate) of the Company and its material domestic subsidiaries that are guarantors thereunder, including the capital stock of such material domestic subsidiaries and 66% of the capital stock of certain foreign subsidiaries owned by the Company and its material domestic subsidiaries.
Certain of the Lenders, or their affiliates, have provided, and may in the future from time to time provide, certain commercial and investment banking, financial advisory and other services in the ordinary course of business for the Company and its subsidiaries, for which they have in the past and may in the future receive customary fees and commissions.
The foregoing description of the Second Amended and Restated Credit Agreement is a summary and is qualified in its entirety by reference to the full text of the Second Amended and Restated Credit Agreement, a copy of which is attached hereto as Exhibit 10.1, which is incorporated herein by reference.
The representations, warranties and covenants made by the parties in the Second Amended and Restated Credit Agreement: (a) were made solely for the benefit of the parties to the Second Amended and Restated Credit Agreement; (b) are subject to limitations agreed upon by the contracting parties, including being qualified by a confidential disclosure schedule; (c) may have been made for the purposes of allocating contractual risk between the parties to the Second Amended and Restated Credit Agreement instead of establishing matters as facts; and (d) are subject to the standards of materiality applicable to the contracting parties that may differ from those applicable to investors. Investors should not rely on any representations, warranties or covenants contained in the Second Amended and Restated Credit Agreement, or any descriptions thereof, as characterizations of the actual state of facts or conditions of the Company or any of its subsidiaries. Information concerning the subject matter of any of such representations, warranties and covenants may change after the date of the Second Amended and Restated Credit Agreement, which subsequent information may or may not be fully reflected in the Company’s public disclosures.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The description of the Second Amended and Restated Credit Agreement set forth under Item 1.01 above is hereby incorporated by reference in its entirety in response to this Item 2.03.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits
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| Exhibit | Description | |
| 10.1 | | Attached |
| 101.INS | XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document | |
| 101.SCH | XBRL Taxonomy Extension Schema Document | |
| 101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | |
| 101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | |
| 101.LAB | XBRL Taxonomy Extension Label Linkbase Document | |
| 101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document | |
*Schedules and exhibits omitted pursuant to Item 601(a)(5) of Regulation S-K. Copies of any omitted schedule or exhibit will be furnished to the SEC upon request.
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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| | KAMAN CORPORATION |
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| | By: | /s/ Robert D. Starr |
| | | Robert D. Starr |
| | | Executive Vice President and |
| | | Chief Financial Officer |
Date: December 18, 2019
