Summary
This 10-Q filing for Carpenter Technology Corp. (CRS) as of February 14, 2002, primarily details changes in its financial arrangements and ongoing operational matters. A key development is the establishment of significant credit facilities in November 2001, comprising a $125 million five-year unsecured credit facility and a $75 million 364-day unsecured credit facility. These facilities include financial covenants such as a debt-to-capital test and an EBITDA-to-interest coverage test, providing insight into the company's debt management strategy and financial flexibility.
Key Highlights
- 1Carpenter established a $125 million five-year and a $75 million 364-day unsecured credit facility in November 2001.
- 2These credit facilities contain financial covenants, including a debt-to-capital test and an EBITDA-to-interest coverage test.
- 3The company entered into a $75 million three-year accounts receivable purchase facility in December 2001 through its subsidiary CRS Funding Corp.
- 4This receivables facility allows Carpenter to sell accounts receivable, treating the transactions as sales under SFAS No. 140, which removes debt and accounts receivable from the balance sheet.
- 5In December 2001, Carpenter capitalized CRS Funding Corp. with $8.0 million in accounts receivable and sold approximately $77.8 million in receivables, receiving $45.0 million in cash to pay down debt.
- 6The company had $106 million available under its committed facility and $59 million available under its 364-day facility as of December 31, 2001.
- 7The filing indicates no material legal proceedings, including environmental matters, that would significantly impact the company's financial condition.
Frequently Asked Questions
In November 2001, Carpenter entered into a $125 million five-year unsecured credit facility and a $75 million 364-day unsecured credit facility with various financial institutions.
The accounts receivable purchase facility, established in December 2001 with CRS Funding Corp., allows Carpenter to sell its accounts receivable. This is treated as a sale under accounting standards, enabling the company to remove equivalent amounts of accounts receivable and short-term debt from its balance sheet and generate cash for debt reduction.
According to the filing, Carpenter is involved in ordinary routine litigation incidental to its business. There are no material proceedings against any directors, officers, affiliates, or major shareholders, nor are there any significant environmental proceedings that would materially impact the company's business or financial condition.
The credit facilities contain two main financial covenants: a debt-to-capital test and an EBITDA-to-interest coverage test. These covenants are designed to ensure the company maintains a healthy balance sheet and sufficient earnings to cover its interest expenses.