Item 1.01 Entry into a Material Definitive Agreement
On December 18, 2012, Kimball International, Inc. (the "Company") entered into
an amended and restated credit agreement (the "Credit Facility") with JPMorgan
Chase Bank, N.A. ("JPMorgan") as Agent and Letter of Credit Issuer; Bank of
America, N.A. as Syndication Agent; PNC Bank, N.A. as Documentation Agent; and
HSBC Bank USA, N.A. The Credit Facility amends, restates, and extends the
Company's existing five-year credit facility, scheduled to mature April 23,
2013.
The Credit Facility has a maturity date of December 18, 2017 and allows for up
to $75 million in borrowings, with an option to increase the amount available
for borrowing to $115 million at the Company's request, subject to participating
banks' consent. The Company elected to decrease the borrowing limit to $75
million from $100 million under the previous agreement. The Company believes its
principal sources of liquidity from available funds on hand, cash generated from
operations, and the availability of borrowing under this Credit Facility will be
sufficient for the foreseeable future. There are currently no borrowings
outstanding under the Credit Facility.
The revolving credit loans under the Credit Facility may consist of, at the
Company's election, advances in U.S. dollars or advances in any other currency
that is agreed to by the lenders. The proceeds of the revolving credit loans are
to be used for general corporate purposes of the Company including acquisitions.
A portion of the Credit Facility, not to exceed $30 million of the principal
amount, will be available for the issuance of letters of credit. A commitment
fee on the unused portion of principal amount of the Credit Facility is payable
at a rate that ranges from 20.0 to 25.0 basis points per annum as determined by
the Company's ratio of consolidated indebtedness to consolidated EBITDA.
The interest rate on borrowings is dependent on the duration and currency of the
advance and will be one of the following two options:
• The London Interbank Offered Rate ("LIBOR") in effect two business days
prior to the advance (adjusted upwards to reflect bank reserve costs) for
such interest period as defined in the agreement, plus the Eurocurrency
Loans margin which can range from 100.0 to 150.0 basis points based on the
Company's ratio of consolidated indebtedness to consolidated EBITDA; or
• The fluctuating rate per annum equal to the higher of
a. JPMorgan's prime rate;
b. 1% per annum above the Adjusted LIBO rate (as defined in the Credit
Facility); or
c. 1/2% per annum above the Federal funds rate;
plus the ABR Loans margin which can range from 0.0 to 50.0 basis points based on
the Company's ratio of consolidated indebtedness to consolidated EBITDA.
The Company's financial covenants under the Credit Facility require:
• a ratio of consolidated indebtedness to consolidated EBITDA, determined as
of the end of each of its fiscal quarters for the then most recently ended
four fiscal quarters, to not be greater than 3.0 to 1.0, and
• a consolidated net worth (excluding accumulated other comprehensive
income) of not less than $362 million.
This summary is not intended to be complete and is qualified in its entirety by
reference to the Credit Agreement in Exhibit 10.1 of this 8-K and is
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 set forth under Item 1.01 above is incorporated into this Item
2.03 by reference.
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