ScanSource, Inc. Form 8-K Summary
Business Context and Reporting Period
ScanSource, Inc. (SCSC) filed this Current Report on Form 8-K on December 18, 2025. The filing details a significant refinancing of the Company's debt structure, replacing its prior credit agreement with a new facility to support ongoing operations and liquidity needs.
Key Financial Metrics and Debt Structure
The Company entered into a new credit agreement with PNC Bank, National Association, as administrative agent. The key terms include:
- New Credit Facilities: A $400 million multicurrency senior secured revolving credit facility and a $100 million senior secured term loan facility, both with five-year terms.
- Initial Borrowing: The Company borrowed $100 million under the term loan facility on December 18, 2025.
- Accordion Feature: The Company may increase borrowings by up to the greater of $250 million or 150% of Pro Forma EBITDA, subject to lender commitments.
- Interest Rates: U.S. dollar loans bear interest at Term SOFR or daily simple SOFR plus a margin of 1.00% to 1.75%, or Base Rate plus 0% to 0.75%, based on the leverage ratio.
- Commitment Fee: Ranges from 0.15% to 0.30% on unused revolving commitments.
- Collateral: Secured by substantially all assets of the Company and its domestic subsidiaries.
Material Changes Versus Prior Period
The Company terminated and repaid all indebtedness under its Third Amended and Restated Credit Agreement with JPMorgan Chase Bank, N.A. The prior agreement provided for a $350 million revolving facility and a $150 million term loan facility, which were scheduled to mature on September 28, 2027. The new agreement increases the total available revolving capacity by $50 million but reduces the term loan capacity by $50 million compared to the prior facility.
Covenants, Risks, and Management Commentary
The New Credit Agreement includes standard affirmative and negative covenants with specific financial maintenance requirements:
- Leverage Ratio: Must be less than or equal to 3.50 to 1.00 (Total consolidated debt less unrestricted domestic cash to trailing four-quarter consolidated EBITDA).
- Interest Coverage Ratio: Must be at least 3.00 to 1.00 as of the end of each fiscal quarter.
- Default Remedies: In the event of a default, lenders may accelerate debt and increase interest rates.
The filing does not provide specific revenue, profit, or cash flow figures for the current period, nor does it include forward-looking guidance or management commentary beyond the terms of the credit agreement.
Key Facts for Investor Verification
- Verify the Company's current leverage ratio and interest coverage ratio to ensure compliance with the new 3.50x and 3.00x covenants.
- Confirm the total amount of debt outstanding immediately following the $100 million term loan draw and the repayment of the prior JPMorgan facility.
- Review the specific definition of "unrestricted domestic cash" in the new agreement to understand its impact on the leverage ratio calculation.
- Monitor the Company's ability to utilize the accordion feature if additional liquidity is required.