Current Report Filing (8-k)
April 20 2020 - 07:00AM
Edgar (US Regulatory)
CONMED CORP false 0000816956 0000816956
2020-04-17 2020-04-17
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): April 17,
2020
CONMED
CORPORATION
(Exact name of registrant as specified in its charter)
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New York
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001-39218
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16-0977505
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(State or other jurisdiction
of incorporation)
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(Commission
File Number)
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(IRS. Employer
Identification No.)
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525 French Road
Utica, New York 13502
(Address of principal executive offices, including zip code)
(315) 797-8375
(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended
to simultaneously satisfy the filing obligations 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) |
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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
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Trading
Symbol
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Name of each exchange
on which registered
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Common Stock, $0.01 par value
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CNMD
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NYSE
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Indicate by check mark whether the registrant is an emerging growth
company 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).
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 April 17, 2020, CONMED Corporation, a New York corporation
(“CONMED”), and its
subsidiary Linvatec Nederland B.V., a Netherlands private limited
company (besloten
vennootschap), entered into the Second Amendment (the
“Second
Amendment”) to the Sixth Amended and Restated Credit
Agreement, dated February 7, 2019 (the “Existing Credit Agreement” and,
as amended by the Second Amendment, the “Credit Agreement”), among
CONMED, the Foreign Subsidiary Borrowers (as defined therein) from
time to time parties thereto, the several banks and other financial
institutions or entities from time to time parties thereto and
JPMorgan Chase Bank, N.A., as administrative agent. The Existing
Credit Agreement was filed as Exhibit 10.1 to CONMED’s Current
Report on Form 8-K on
February 7, 2019.
The Second Amendment amends the Existing Credit Agreement to, among
other things, suspend the application of the financial maintenance
covenants thereunder, modify certain restrictive covenants therein
and modify the applicable interest rates and commitment fees
payable thereunder.
In particular, while the Suspension Period is in effect:
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the required consolidated senior secured leverage ratio will not be
applicable; |
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the required consolidated total leverage ratio will not be
applicable; |
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the consolidated fixed charge coverage ratio for the period of four
consecutive fiscal quarters ending on the applicable fiscal quarter
will be reduced from 2.25 to 1.00 to: (i) 2.00 to 1.00 for the
fiscal quarter ending June 30, 2020; (ii) 1.50 to 1.00 for the
fiscal quarter ending September 30, 2020; (iii) 1.75 to 1.00
for the fiscal quarter ending December 31, 2020 and
(iv) 1.75 to 1.00 for the fiscal quarter ending March 31,
2021; and |
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certain other covenants in the Existing Credit Agreement will be
modified to impose greater restrictions on CONMED’s ability to
incur indebtedness and liens, and to make certain restricted
payments, including, among other things, investments and
acquisition transactions. |
“Suspension Period”
means the period beginning on the effective date of the Second
Amendment and ending on earlier of (i) the first date on which
CONMED delivers a certificate demonstrating compliance with the
financial maintenance covenants set forth in the Credit Agreement
for the fiscal quarter ended June 30, 2021 or (ii) at the
election of CONMED, the first date on which CONMED delivers a
certificate demonstrating compliance certificate with the financial
maintenance covenants that were contained in the Existing Credit
Agreement for any fiscal quarter starting with the fiscal quarter
ending September 30, 2020.
Additionally, from the effective date of the Second Amendment
through March 31, 2021, CONMED may not permit its liquidity,
as defined in the Credit Agreement, to be less than
$135 million.
With respect to any borrowings under the revolving credit facility
during the Suspension Period, if the aggregate amount of available
cash, as defined in the Credit Agreement, would exceed
$75 million after giving effect to the applicable borrowing
and any other transactions occurring prior to or substantially
simultaneous with such borrowing, the borrower must deliver a
certificate certifying the proposed use of
the proceeds of the borrowing and, if such proceeds are not applied
in accordance with such certificate within five business days,
repay the revolving credit facility in an amount equal to the
lesser of (i) the unused proceeds and (ii) the amount
necessary to cause available cash to be equal to or less than
$75 million.
The Second Amendment modifies the interest rates and commitment
fees that CONMED is required to pay during and after the Suspension
Period. The credit facilities under the Credit Agreement bear
interest at variable rates calculated according to a base rate or a
Eurocurrency rate plus an applicable margin. CONMED must also pay
commitment fees quarterly on the revolving credit facility. Prior
to the Suspension Period, both the applicable margin and the
commitment fee rate varied depending on CONMED’s consolidated
senior secured leverage ratio. During the Suspension Period, the
applicable margin for base rate loans is 2.50% per annum and for
Eurocurrency rate loans is 3.50% per annum, and the commitment fee
rate for the revolving credit facility is 0.50%. Following the
Suspension Period, the applicable margin and the commitment fee
rate will depend upon CONMED’s consolidated senior secured leverage
ratio, as set forth in the following pricing grid:
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Consolidated Senior
Secured Leverage Ratio
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Applicable Margin
for Eurocurrency
Loans
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Applicable
Margin for Base
Rate Loans
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Commitment Fee
Rate
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Greater than or equal to 4.00
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3.00
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% |
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2.00
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% |
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0.50
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% |
Less than 4.00 but greater than or equal to 3.50
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2.75
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% |
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1.75
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% |
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0.45
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% |
Less than 3.50 but greater than or equal to 3.00
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2.625
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% |
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1.625
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% |
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0.40
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% |
Less than 3.00 but greater than or equal to 2.50
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2.50
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% |
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1.50
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% |
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0.375
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% |
Less than 2.50 but greater than or equal to 2.00
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2.25
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% |
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1.25
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% |
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0.35
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% |
Less than 2.00 but greater than or equal to 1.50
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2.00
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% |
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1.00
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% |
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0.30
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% |
Less than 1.50
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1.875
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% |
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0.875
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% |
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0.25
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% |
The Second Amendment also modifies the interest rate floor
applicable to the Eurocurrency rate from zero to 1.00%.
The Second Amendment was entered into by CONMED, as parent
borrower, Linvatec Nederland, B.V., as a foreign subsidiary
borrower, JPMorgan Chase Bank, N.A., as administrative agent and
lender, and each of the other lenders party to the Credit
Agreement.
The foregoing description of the Second Amendment does not purport
to be complete and is subject to and qualified in its entirety by,
the full text of the Second Amendment, a copy of which is attached
hereto as Exhibit 10.1 and 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 by
reference.
Item 7.01 |
Regulation FD Disclosure |
A copy of the press release issued by CONMED on April 20, 2020
announcing the Second Amendment to the Credit Agreement referenced
in Items 1.01 and 2.03 is furnished with this Current Report on
Form 8-K as Exhibit
99.1.
The information furnished herewith pursuant to Item 7.01 of this
Current Report on Form 8-K
shall not be deemed to be “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, and shall not
be incorporated by reference into any registration statement or
other document under the Securities Act of 1933, as amended, or the
Exchange Act, except as shall be expressly set forth by specific
reference in such filing.
Item 9.01 |
Financial Statements and Exhibits. |
(d) Exhibits
The following exhibit is included herewith:
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Exhibit
No.
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Description
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10.1
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Second Amendment, dated April 17,
2020, to the Sixth Amendment and Restated Credit Agreement, dated
February 7, 2019, among CONMED Corporation, the foreign
subsidiary borrowers from time to time party thereto, the several
lenders from time to time party thereto and JPMorgan Chase Bank,
N.A., as administrative agent.
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99.1
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Press Release dated April 20,
2020, issued by CONMED Corporation
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104
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Cover Page Interactive Data File (embedded within the Inline XBRL
document).
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Signature
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 thereunto duly authorized.
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CONMED CORPORATION
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(Registrant)
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By:
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/s/ Daniel S. Jonas
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Name:
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Daniel S. Jonas
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Title:
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Executive Vice President, General Counsel & Secretary
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Date: April 20, 2020