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): FEBRUARY 6, 2006
TECUMSEH PRODUCTS COMPANY
(Exact name of registrant as specified in its charter)
MICHIGAN 0-452 38-1093240
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
100 EAST PATTERSON STREET
TECUMSEH, MICHIGAN 49286
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (517) 423-8411
(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))
ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
On February 6, 2006, we entered into a $275 million First Lien Credit
Agreement and a $100 million Second Lien Credit Agreement with two groups of
lenders and Citicorp USA, Inc,. as administrative agent and collateral agent for
both groups. The lenders' names are shown in the copies of the agreements filed
as exhibits to this report and are incorporated by reference into this item.
The First Lien Credit Agreement provides us with a $275 million revolving
credit facility expiring on February 6, 2011, with availability calculated under
a formula based on our receivables, inventory, equipment, and real property.
Borrowings under this agreement bear interest at LIBOR plus a margin based on
borrowing availability.
Under the Second Lien Credit Agreement, we obtained $100 million in term
loans repayable in principal installments of $1 million per year until February
6, 2013, when the remaining balance will be payable. The term loans bear
interest at LIBOR plus 7.5%.
The loans under both agreements are secured by liens on substantially all
of our assets. Both agreements contain financial covenants, including covenants
on minimum EBITDA, minimum fixed charge coverage ratio, and maximum capital
expenditures, and both limit our ability to pay dividends as described in Item
3.03 of this report.
The agreements also contain other covenants, warranties, mandatory and
optional prepayment provisions, and other related provisions. For more detailed
information about the agreements' terms, please see the copies filed as exhibits
to this report.
ITEM 1.02 TERMINATION OF A MATERIAL DEFINITIVE AGREEMENT.
On February 6, 2006, we used proceeds from the term loans and our initial
borrowing under the credit facility described above to repay in full the notes
issued under the Note Purchase Agreement dated March 5, 2003 among the
purchasers named in that agreement and Tecumseh Products Company, and the note
purchase agreement and the related Guaranty Agreement dated as of March 5, 2003
given by some of our subsidiaries in favor of the note purchasers were
terminated.
At the same time, we terminated the Credit Agreement dated as of December
21, 2004 among Tecumseh Products Company, the lenders named in that agreement,
and JPMorgan Chase Bank, N.A., as agent. There was no indebtedness outstanding
under the credit agreement.
ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION
Our press release dated February 9, 2006 regarding our 2006 consolidated
results is attached as Exhibit 99.1.
We hosted our fourth quarter and full year 2005 earnings conference call
and webcast on Thursday, February 9, 2006 at 11:00 a.m. Eastern Time. Via the
webcast, we presented our Fourth Quarter and Full Year 2005 Investor
Presentation, which contains a summary of our financial results for the quarter
and year ended. We are furnishing a copy of the Fourth Quarter and Full Year
2005 Investor Presentation as Exhibit 99.2 to this report. The Investor
Presentation will be posted on our website, www.tecumseh.com, through at least
February 23, 2006. Exhibit 99.2 is incorporated by reference under this Item
2.02.
The information in this Item 2.02 and in Exhibits 99.1 and 99.2 shall not
be deemed to be "filed" for purposes of Section 18 of the Securities Exchange
Act of 1934, or otherwise subject to the liability of that section, and shall
not be incorporated by reference into any registration statement or other
document filed under the Securities Act of 1933, as amended, or the Securities
Exchange Act of 1934, except as shall be expressly set forth by specific
reference in the filing. The inclusion of any information in this Item 2.02 is
not an admission as to the materiality of the information.
ITEM 3.03 MATERIAL MODIFICATIONS TO RIGHTS OF SECURITY HOLDERS.
Both of the new credit agreements we entered into on February 6, 2006
prohibit us from paying dividends on our common stock before December 31, 2006
and only permit us to pay dividends after that date if we have at least $100
million of availability under the revolving credit facility, we are in
compliance with the fixed charge coverage and EBITDA covenants on a pro forma
basis, and there is no default under either agreement. For more detailed
information about these restrictions, please see the copies of the agreements
filed as exhibits to this report.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.
The following exhibits are filed or furnished with this report:
Exhibit No. Description
- ----------- -----------
4.1 First Lien Credit Agreement dated as of February 6, 2006 among the
registrant, the lenders named therein, and Citicorp USA, Inc., as
administrative agent and collateral agent
4.2 Second Lien Credit Agreement dated as of February 6, 2006 among
the registrant, the lenders named therein, and Citicorp USA, Inc.,
as administrative agent and collateral agent
99.1 Press Release dated February 9, 2006
99.2 Fourth Quarter and Full Year 2005 Investor Presentation
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.
TECUMSEH PRODUCTS COMPANY
Date: February 9, 2006 By /s/ James S. Nicholson
-------------------------------------
James S. Nicholson
Vice President, Treasurer and Chief
Financial Officer
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EXHIBIT INDEX
Exhibit No. Description
- ----------- -----------
4.1 First Lien Credit Agreement dated as of February 6, 2006 among the
registrant, the lenders named therein, and Citicorp USA, Inc., as
administrative agent and collateral agent
4.2 Second Lien Credit Agreement dated as of February 6, 2006 among
the registrant, the lenders named therein, and Citicorp USA, Inc.,
as administrative agent and collateral agent
99.1 Press Release dated February 9, 2006
99.2 Fourth Quarter and Full Year 2005 Investor Presentation
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