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): January 21, 2020
CITRIX SYSTEMS, INC.
(Exact name of Registrant as specified in its Charter)
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Delaware | | 0-27084 | | 75-2275152 |
(State or other Jurisdiction of Incorporation or Organization) | | (Commission File Number) | | (I.R.S. Employer Identification No.) |
851 West Cypress Creek Road
Fort Lauderdale, Florida 33309
(Address of Principal Executive Offices) (Zip Code)
Telephone: (954) 267-3000
(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:
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Title of each class | | Trading symbol(s) | | Name of each exchange on which registered |
Common stock, $.001 par value per share | | CTXS | | The Nasdaq Stock Market LLC |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.
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 January 21, 2020 (the “Closing Date”), Citrix Systems, Inc. (the “Company”) entered into a term loan credit agreement (the “Credit Agreement”) with Bank of America, N.A., as administrative agent, and the other lenders party thereto from time to time (collectively, the “Lenders”). The Credit Agreement provides the Company with facilities to borrow term loans on an unsecured basis in an aggregate principal amount of up to $1 billion, consisting of (i) a $500 million 364-day term loan facility (the “364-day Term Loan”), and (ii) a $500 million 3-year term loan facility (the “3-year Term Loan”). Each of the 364-day Term Loan and the 3-year Term Loan are available to be made by the Lenders from the Closing Date through March 21, 2020, in each case in a single borrowing, subject to satisfaction of certain conditions set forth in the Credit Agreement. The proceeds of borrowings under the Credit Agreement may be used for general corporate purposes, including, but not limited to, share repurchases.
Borrowings under the Credit Agreement will bear interest at a rate equal to (a) either (i) a customary London interbank offered rate formula (“LIBOR”) or, upon a phase-out of LIBOR, an alternative benchmark rate as provided in the Credit Agreement, or (ii) a customary base rate formula, plus (b) the applicable margin with respect thereto, which initially will be determined based on the Company’s consolidated leverage ratio but may, if so elected by the Company, be based on the Company’s non-credit enhanced, senior unsecured long-term debt rating as determined by Moody’s Investors Service, Inc., Standard & Poor’s Financial Services, LLC and Fitch Ratings Inc., in each case as set forth in the Credit Agreement.
The Credit Agreement includes a covenant limiting the Company’s consolidated leverage ratio to not more than 3.5:1.0, subject to, upon the occurrence of a qualified acquisition, if so elected by the Company, a step-up to 4.0:1.0 for the four fiscal quarters following such qualified acquisition, and a covenant limiting the Company’s consolidated interest coverage ratio to not less than 3.0:1.0. The Credit Agreement includes customary events of default, with corresponding grace periods in certain circumstances, including, without limitation, payment defaults, cross-defaults, the occurrence of a change of control of the Company and bankruptcy-related defaults. The Lenders are entitled to accelerate repayment of the loans under the Credit Agreement upon the occurrence of any of the events of default. In addition, the Credit Agreement contains customary affirmative and negative covenants, including covenants that limit or restrict the ability of the Company to grant liens, merge or consolidate, dispose of all or substantially all of its assets, change its business and incur subsidiary indebtedness, in each case subject to customary exceptions. In addition, the Credit Agreement requires the Company to make prepayments of any net cash proceeds received in connection with the Company issuing or incurring debt or issuing equity, subject to certain ordinary course exceptions described in the Credit Agreement. The Credit Agreement also contains representations and warranties customary for an unsecured financing of this type.
Certain Lenders and/or their affiliates have provided and may continue to provide commercial banking, investment management and other services to the Company, its affiliates and employees, for which they receive customary fees and commissions.
The foregoing description of the Credit Agreement does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Credit Agreement, which is attached hereto as Exhibit 10.1 and is incorporated herein by reference.
| Item 2.02 | Results of Operations and Financial Condition. |
The information under this Item 2.02, including the earnings letter attached hereto as Exhibit 99.1, is intended to be furnished and 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 under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such filing.
On January 22, 2020, the Company announced its financial results for the quarter and fiscal year each ended December 31, 2019 by issuing an earnings letter. A copy of the earnings letter is attached hereto as Exhibit 99.1 and is incorporated into this Item 2.02 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 set forth above under Item 1.01 of this current report on Form 8-K is incorporated herein by reference.
On January 22, 2020, the Company announced that its Board of Directors declared a quarterly cash dividend of $0.35 per share. This dividend is payable on March 20, 2020 to all shareholders of record at the close of business on March 6, 2020. Future dividends will be subject to approval by the Company’s Board of Directors.
| Item 9.01 | Financial Statements and Exhibits. |
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Exhibit
No. | | | Description |
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| | 10.1* | | | Term Loan Credit Agreement, dated as of January 21, 2020, by and among Citrix Systems, Inc., the initial lenders named therein, and Bank of America, N.A., as Administrative Agent. |
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| | 99.1+ | | | Fourth Quarter Earnings Letter dated January 22, 2020 of Citrix Systems, Inc. |
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| | 104 | | | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
| * | The schedules to the Term Loan Credit Agreement, identified herein, have not been filed. The registrant agrees to furnish supplementally a copy of any omitted schedule to the Securities and Exchange Commission 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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| | | | CITRIX SYSTEMS, INC. |
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Dated: January 22, 2020 | | | | By: | | /s/ Antonio G. Gomes |
| | | | Name: | | Antonio G. Gomes |
| | | | Title: | | Executive Vice President, Chief Legal Officer and Secretary |
