Business Context and Reporting Period
Company: Fox Factory Holding Corp.
Filing Type: Form 8-K (Current Report)
Date of Report: June 3, 2019
Event: Entry into a new material definitive credit agreement and termination of a prior financing agreement.
Key Financial Metrics and Debt Structure
This filing details a refinancing transaction rather than operational financial results (revenue, profit, or cash flow are not reported in this document).
- New Credit Facility: $250 million revolving credit facility led by Bank of America, N.A.
- Initial Drawdown: Approximately $89.6 million advanced on the closing date.
- Maturity Date: June 3, 2024.
- Interest Rates:
- Eurodollar loans: LIBOR + 1.00% to 1.50%.
- Base rate loans: Highest of (Federal Funds + 0.50%, Prime, or Eurodollar + 1.00%) + 0% to 0.50%.
- Fees:
- Commitment fee: 0.20% to 0.35% per annum on undrawn amounts.
- Letter of credit fee: 1.00% to 1.50% per annum.
- Collateral: Secured by all assets of the Company and its domestic subsidiaries.
Material Changes Versus Prior Period
The Company terminated its "Prior Financing Agreement" dated May 11, 2016, with SunTrust Bank.
- Prior Facility Size: $175 million (comprised of a $100 million revolving line and a $75 million term loan).
- Outstanding Balance Repaid: Approximately $88.9 million (principal, accrued interest, and fees).
- Net Change: The Company increased its total available credit capacity from $175 million to $250 million while refinancing existing debt.
Outlook, Risks, and Unusual Items
Use of Proceeds: The initial drawdown was used to refinance the prior indebtedness and pay closing costs. Future advances are designated for working capital, capital expenditures, general corporate purposes, acquisitions, permitted distributions, and intercompany loans.
Risks and Contingencies:
- Default Consequences: An event of default could lead to the termination of the loan commitment, immediate acceleration of all outstanding obligations, and a requirement to cash collateralize letters of credit.
- Operational Impact: The filing notes that a default event may materially impair the Company's ability to conduct its business.
Investor Verification Checklist
- Verify the Company's current consolidated net leverage ratio to determine the specific interest rate margin and commitment fee applicable under the new agreement.
- Confirm the exact amount of the $89.6 million drawdown allocated to closing costs versus debt repayment.
- Review the full text of the Credit Agreement (Exhibit 10.1) for specific financial covenants and definitions of "Event of Default."
- Monitor future usage of the remaining $160.4 million of available credit for potential acquisitions or distributions.