Curtiss-Wright Corp. 8-K Summary
Business Context and Reporting Period
This Form 8-K Current Report was filed by Curtiss-Wright Corporation on December 12, 2011, regarding events occurring on December 8 and December 9, 2011. The filing details the completion of a private placement offering of senior notes.
Key Financial Metrics and Capital Structure
The Company issued and sold a total of $300,000,000 in senior notes. The issuance consists of two tranches:
- $100,000,000 of 3.84% senior notes due 2021.
- $200,000,000 of 4.24% senior notes due 2026.
The notes rank pari passu with the Company's other senior unsecured indebtedness. The filing does not provide specific values for revenue, profit, cash flow, or existing debt levels prior to this transaction.
Material Changes and Use of Proceeds
The primary material change is the addition of $300 million in long-term debt. The Company intends to use the net proceeds from the offering for the following purposes:
- Reduction of outstanding indebtedness under revolving credit facilities.
- Funding of ongoing strategic growth plans.
- Other general corporate purposes.
Covenants, Risks, and Management Commentary
The Note Purchase Agreement includes specific financial covenants that restrict the Company's future financial flexibility:
- Limitation on Consolidated Debt: The ratio of Consolidated Debt to Consolidated Total Capitalization must not exceed 0.60 to 1.00 as of the last day of each fiscal quarter.
- Minimum Consolidated Net Worth: Consolidated Net Worth must not be less than $692,084,000 plus 50% of aggregate Consolidated Net Income for completed fiscal quarters ending on or after September 30, 2011 (if positive).
The notes contain customary restrictive covenants regarding subsidiary indebtedness, mergers, asset sales, liens, and change in fiscal year. Events of default include failure to make payments, breach of covenants, cross-defaults on indebtedness exceeding $20,000,000, and bankruptcy.
Investor Verification Checklist
- Verify the exact amount of revolving credit facility debt reduced by the net proceeds.
- Confirm the Company's current Consolidated Debt to Total Capitalization ratio to ensure compliance with the 0.60:1.00 covenant.
- Review the Company's Consolidated Net Worth to ensure it meets the minimum threshold of $692,084,000 plus applicable income adjustments.
- Examine the attached Note Purchase Agreement (Exhibit 10.1) for specific definitions of "Consolidated Debt" and "Consolidated Total Capitalization."