Business Context and Reporting Period
Company: MillerKnoll, Inc.
Filing Type: Form 8-K (Current Report)
Date of Report: April 17, 2025
Event: Entry into a Material Definitive Agreement (Amendment No. 3 to Credit Agreement).
Key Financial Metrics and Debt Structure
The filing details a refinancing and extension of the Company's senior secured financing facilities. As of the Closing Date (April 17, 2025):
- Total Senior Facilities: $1,750.0 million aggregate principal amount.
- Refinanced Term Loan A Facility: $400.0 million.
- Existing Term Loan B Facility: $625.0 million (unchanged).
- Refinanced Revolving Credit Facility: Up to $725.0 million (including a $50.0 million letter of credit sub-facility).
- Outstanding Revolver Borrowings: $385.0 million immediately following the closing.
- Interest Rates (Initial Margins):
- Term Loan A: 1.75% (RFR Loans) or 0.75% (ABR Loans) plus applicable benchmark.
- Revolving Credit: 1.75% (RFR/Eurocurrency Loans) or 0.75% (ABR Loans) plus applicable benchmark.
- Commitment Fee: Initially 0.25% per annum on unutilized revolver commitments.
Material Changes Versus Prior Period
The Amendment No. 3 replaced the Existing Term Loan A Facility and Existing Revolving Credit Facility with new "Pro Rata Facilities" while maintaining the aggregate principal amounts of $400.0 million and $725.0 million, respectively. Key changes include:
- Extension: Both the Refinanced Term Loan A and Refinanced Revolving Credit Facilities now mature on the five-year anniversary of the Closing Date (April 2030).
- Amortization: The Refinanced Term Loan A Facility requires quarterly amortization starting the first full fiscal quarter after closing, ranging from 0.625% to 2.50% of the initial principal amount depending on the quarter.
- Covenant Adjustment: The maximum permitted first lien secured net leverage ratio was amended to 4.00 to 1.00.
Outlook, Risks, and Management Commentary
Use of Proceeds: Proceeds from the Pro Rata Facilities were used to repay the existing Term Loan A and Revolving Credit Facilities and to pay related fees and expenses. Future borrowings under the revolver will be used for general corporate purposes.
Covenants and Risks:
- The Company must maintain a maximum first lien secured net leverage ratio of 4.00 to 1.00.
- The ratio may be temporarily increased by up to 0.50 to 1.00 following certain permitted acquisitions (no more than twice).
- Prepayment is allowed without premium or penalty, subject to customary "breakage" costs for RFR and Eurocurrency loans.
Financial Performance: The filing text does not provide revenue, profit, cash flow, or margin data for the reporting period.
Investor Verification Checklist
- Verify the current First Lien Secured Net Leverage Ratio to ensure compliance with the new 4.00 to 1.00 covenant.
- Review the amortization schedule for the Refinanced Term Loan A Facility to assess near-term cash flow requirements.
- Confirm the utilization rate of the $725.0 million Revolving Credit Facility ($385.0 million outstanding at closing).
- Monitor interest rate benchmarks (SOFR, SONIA, EURIBOR, CIBOR) to estimate future interest expense given the variable rate structure.
- Check for any subsequent permitted acquisitions that might trigger the temporary leverage ratio increase.