Titan Machinery Announces Entry into New Amended and Restated Credit Agreement
April 06 2020 - 8:00AM
Titan Machinery Inc. (Nasdaq: TITN), a leading network of
full-service agricultural and construction equipment stores,
announced today that it has entered into a new five-year Amended
and Restated Credit Agreement, maturing April 2025, arranged by
Bank of America, with a syndicate of lenders consisting of Bank of
America, Wells Fargo Bank, Regions Bank, BBVA USA, AgCountry Farm
Credit Services, and Sterling National Bank.
The new Amended and Restated Credit Agreement
provides for an aggregate $250 million financing commitment by the
lenders, consisting of an aggregate floorplan financing commitment
of $185 million and an aggregate working capital commitment of $65
million. The floorplan facility may be used to advance up to 85% of
the value of eligible new inventory and up to 75% of the value of
eligible used inventory, which compares to the previous floorplan
facility that allowed for an advance up to 70% of the value of both
new and used eligible inventory. The working capital facility may
be used to advance up to 85% of eligible accounts, 75% of the value
of eligible rental equipment, 75% of the Company’s eligible parts
inventory, and a percentage of other unencumbered assets such as
vehicles and real estate. The working capital advance rates
are up to 5% higher than the previous facility and can include
assets in the borrowing base that were not allowed under the old
facility.
The Amended and Restated Credit Agreement does
not obligate the Company to maintain financial covenants, except in
the event that excess availability is less than 15% of the lower of
the borrowing base or the size of the full credit line. If
excess availability levels are not met, then the Company is
required to maintain a fixed charge coverage ratio of at least
1.10:1.00. These terms are similar to those in the previous
credit facility but favorably impacted by the increased advanced
rates, which adds to the Company’s excess availability amount.
The interest rate for loans under the credit
facility will be equal to LIBOR (subject to a floor of 0.5%) plus
an applicable margin based on the Company’s excess availability.
The initial applicable margin is 1.5%, resulting in an
effective initial interest rate of 2.49%.
Mark Kalvoda, Chief Financial Officer stated,
"We believe this Amended and Restated Credit Agreement validates
the strength of our overall financial position and provides ample
financial flexibility to support our continued long-term profitable
growth. The improved terms and rates of the credit facility
lowers our borrowing costs by approximately 50 basis points, while
simultaneously increasing our liquidity position through enhanced
flexibility, allowing us to meet the needs of our business.
We are fortunate to have partnered with such a supportive bank
group."
About Titan Machinery Inc.
Titan Machinery Inc., founded in 1980 and
headquartered in West Fargo, North Dakota, owns and operates a
network of full service agricultural and construction equipment
dealer locations in North America and Europe. The network consists
of US locations in Arizona, Colorado, Iowa, Minnesota, Montana,
Nebraska, North Dakota, South Dakota, Wisconsin and Wyoming and its
European stores are located in Bulgaria, Germany, Romania, Serbia
and Ukraine. The Titan Machinery locations represent one or more of
the CNH Industrial Brands, including Case IH, New Holland
Agriculture, Case Construction, New Holland Construction, and CNH
Industrial Capital. Additional information about Titan
Machinery Inc. can be found at www.titanmachinery.com.
Forward Looking Statements
Except for historical information contained
herein, the statements in this release are forward-looking and made
pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. The words “potential,” “believe,”
“estimate,” “expect,” “intend,” “may,” “could,” “will,” “plan,”
“anticipate,” and similar words and expressions are intended to
identify forward-looking statements. Such statements are based upon
the current beliefs and expectations of our management.
Forward-looking statements made herein, which include statements
regarding growth and profitability expectations financial liquidity
expectations, and future borrowing costs, involve known and unknown
risks and uncertainties that may cause Titan Machinery’s actual
results in current or future periods to differ materially from the
forecasted assumptions and expected results. The Company’s risks
and uncertainties include, among other things, a substantial
dependence on a single equipment supplier, the continued
availability of organic growth and acquisition opportunities,
potential difficulties integrating acquired stores, industry supply
levels, fluctuating agriculture and construction industry economic
conditions, the success of recently implemented initiatives within
the Company’s operating segments, the uncertainty and fluctuating
conditions in the capital and credit markets, difficulties in
conducting international operations, foreign currency risks,
governmental agriculture policies, seasonal fluctuations, the
ability of the Company to reduce inventory levels, climate
conditions, disruption in receiving ample inventory financing, and
increased competition in the geographic areas served. These and
other risks are more fully described in Titan Machinery’s filings
with the Securities and Exchange Commission, including the
Company’s most recently filed Annual Report on Form 10-K, as
updated in subsequently filed Quarterly Reports on Form 10-Q, as
applicable. Titan Machinery conducts its business in a highly
competitive and rapidly changing environment. Accordingly, new risk
factors may arise. It is not possible for management to predict all
such risk factors, nor to assess the impact of all such risk
factors on Titan Machinery’s business or the extent to which any
individual risk factor, or combination of factors, may cause
results to differ materially from those contained in any
forward-looking statement. Other than required by law, Titan
Machinery disclaims any obligation to update such factors or to
publicly announce results of revisions to any of the
forward-looking statements contained herein to reflect future
events or developments.
Investor Relations Contact:
ICR, Inc.
John Mills, jmills@icrinc.com
Managing Partner
646-277-1254
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