Business Context and Reporting Period
This Form 6-K filing by Stratasys Ltd. (the "Company") is dated November 7, 2013. The report discloses the execution of a new credit agreement on November 7, 2013, between the Company, its wholly-owned subsidiary Stratasys International Ltd. (the "Borrower"), and a syndicate of lenders led by Bank of America, N.A.
Key Financial Metrics and Debt Structure
- Facility Size: A five-year revolving credit facility with an aggregate principal amount of up to $250 million.
- Swing Line Loans: Up to $25 million available under the facility.
- Expansion Option: The Borrower may request up to three increases in aggregate commitments totaling up to $75 million, subject to lender approval.
- Interest Rates: Loans accrue interest based on either the Eurodollar Rate (LIBOR) plus a margin or a Base Rate (Federal Funds Rate, Prime Rate, or Eurodollar Rate plus margin), with margins determined by the Company's Consolidated Leverage Ratio.
- Guarantees: Obligations are unconditionally guaranteed by the Company and its active U.S. and Israeli subsidiaries. Notably, Baccio Corporation (formerly MakerBot) and its subsidiaries are excluded from guarantees through the end of 2014.
- Financial Covenants: The agreement requires maintenance of a maximum Leverage Ratio, a minimum consolidated fixed charge coverage ratio, and minimum consolidated EBITDA.
Material Changes
The primary material change disclosed is the establishment of the new $250 million credit facility. This replaces or supplements previous financing arrangements to provide liquidity for general corporate purposes, including permitted acquisitions and investments. The filing does not provide comparative financial performance data (revenue, profit, or cash flow) for the period.
Outlook, Risks, and Contingencies
- Usage of Funds: Borrowings are designated for general corporate purposes, specifically highlighting permitted acquisitions and investments.
- Covenants and Restrictions: The agreement includes negative covenants restricting additional indebtedness, liens, investments, and dispositions, though exceptions exist for acquisitions and convertible unsecured bonds if leverage conditions are met.
- Events of Default: Standard events of default include failure to pay principal or interest, covenant breaches, change of control, cross-defaults, material monetary judgments, and insolvency.
- Prepayment: The Borrower may prepay or terminate commitments without premium or penalty, subject to customary breakage costs for Eurodollar Rate borrowings.
Investor Verification Checklist
- Verify the specific Consolidated Leverage Ratio thresholds and interest rate margins in the full Credit Agreement (Exhibit 10.1).
- Confirm the current status of the MakerBot acquisition integration and the rationale for the temporary exclusion of its guarantees.
- Review the Company's most recent Form 20-F to assess current leverage and EBITDA against the new covenant requirements.
- Monitor future filings for any utilization of the $75 million expansion option or drawdowns on the $250 million facility.