Business Context and Reporting Period
Company: Digi International Inc.
Filing Type: Form 8-K (Current Report)
Date of Report: August 27, 2026
Event: Entry into a Material Definitive Agreement (Amended and Restated Revolving Credit Agreement) and termination of the prior credit agreement dated December 7, 2023.
Key Financial Metrics and Facility Terms
This filing details the terms of a new credit facility rather than reporting operational financial results (revenue, profit, or cash flow) for a specific period.
- Facility Size: $350 million senior secured revolving credit facility.
- Maturity Date: August 27, 2031.
- Accordion Feature: Uncommitted option to increase capacity by the greater of $130 million or 100% of trailing four-quarter consolidated EBITDA, or an unlimited amount subject to a pro forma total net leverage ratio of 2.50 to 1.00.
- Sublimits: $10 million for letters of credit; $10 million for swingline loans; $75 million for foreign currency borrowings.
- Interest Rates: Term SOFR (with 0.00% floor) or Base Rate plus applicable margins. Margins range from 1.25% to 2.625% for Term SOFR loans and 0.25% to 1.625% for Base Rate loans, based on leverage ratios.
- Commitment Fee: 0.15% to 0.275% on unutilized commitments.
- Collateral: Secured by substantially all property of Digi and its domestic subsidiaries.
Material Changes Versus Prior Period
The primary material change is the replacement of the Revolving Credit Agreement dated December 7, 2023 (the "Terminated Agreement").
- Termination: On August 27, 2026, Digi paid off all amounts due and terminated all commitments under the 2023 agreement.
- Continuity: Certain lenders under the terminated agreement are also lenders under the new Credit Agreement.
- Usage of Proceeds: Proceeds from the new facility are designated for future permitted acquisitions, related fees and expenses, and general corporate purposes.
Guidance, Covenants, and Risks
Covenants:
- Financial Covenants: Minimum interest coverage ratio of 3.00 to 1.00; maximum total net leverage ratio of 3.50 to 1.00.
- Covenant Holiday: Leverage ratio may increase to 4.00 to 1.00 following certain material acquisitions.
- Restrictive Covenants: Limitations on incurring additional indebtedness, disposing of significant assets, making restricted payments, and granting additional liens.
Risks and Contingencies:
- Events of Default: Include failure to make payments, covenant breaches, cross-defaults to other material indebtedness, failure to pay material judgments, bankruptcy, or change of control.
- Consequences of Default: Lenders may terminate commitments and accelerate loans.
Management Commentary: The filing does not contain specific management commentary on operational outlook beyond the strategic intent to use the facility for acquisitions and general corporate purposes.
Important Facts for Investor Verification
- Verify the company's current total net leverage ratio and interest coverage ratio to ensure compliance with the new covenants (3.50:1.00 and 3.00:1.00, respectively).
- Review the definition of EBITDA in the attached Credit Agreement (Exhibit 10.1) to understand the calculation basis for the accordion feature and leverage ratios.
- Monitor the unutilized commitment fee impact on future interest expenses, which varies between 0.15% and 0.275%.
- Confirm the status of any material acquisitions that might trigger the covenant holiday allowing a leverage ratio up to 4.00 to 1.00.
- Check for any cross-default provisions that could link this facility to other material indebtedness of the company or its subsidiaries.