8-K/AMaterial AgreementsFinancial EventsOther Events+1

ENTEGRIS INC 8-K/A Report, Material Agreement (Aug 12, 2009)

Filed August 12, 2009For Securities:ENTG

Summary

This Form 8-K/A filing by Entegris, Inc. (ENTG) serves as an amendment to a prior filing and primarily discloses the execution of an Amended and Restated Credit Agreement with Wells Fargo Bank, National Association, as agent, on March 2, 2009. The new agreement establishes a $150 million revolving credit facility maturing on November 1, 2011. This represents a reduction from the prior $230 million facility which had a later maturity date. Key changes include a reduced credit limit, an earlier maturity, and a restructured borrowing base tied to accounts receivable, inventory, and fixed assets, which could lead to downward adjustments. The agreement also introduces specific minimum year-to-date EBITDA covenants that the company must meet throughout 2009 and early 2010, with potential interest rate increases if these targets are missed. This amendment provides crucial details on the company's financing arrangements and financial covenants, which are critical for investors to assess liquidity and financial flexibility.

Key Highlights

  • 1Entegris, Inc. entered into an Amended and Restated Credit Agreement on March 2, 2009.
  • 2The new credit facility is for $150 million, maturing on November 1, 2011, a decrease from the previous $230 million facility.
  • 3Borrowing capacity is subject to a 'borrowing base' comprising eligible accounts receivable, inventory, and fixed assets.
  • 4Interest rates can increase by 2.25% if year-to-date EBITDA falls below specified negative thresholds.
  • 5The agreement includes significant minimum year-to-date EBITDA covenants for the period from January 2009 through March 2010.
  • 6The company's borrowings are guaranteed by domestic subsidiaries and secured by a first-priority security interest in most assets.
  • 7Negative covenants restrict various corporate actions, including asset sales, capital expenditures, dividends, and incurring additional debt.

Frequently Asked Questions

The primary purpose of this filing is to amend and restate a previous 8-K filing to include the exhibits and schedules of the Amended and Restated Credit Agreement entered into by Entegris, Inc. on March 2, 2009. It provides detailed information about the company's new credit facility.

The new revolving credit facility is for $150 million and matures on November 1, 2011, which is a reduction in size and an earlier maturity compared to the prior $230 million credit facility that matured on February 15, 2013.

The agreement imposes minimum year-to-date EBITDA targets that Entegris must achieve throughout 2009 and early 2010. Failure to meet these targets can lead to increased interest rates. Additionally, there are covenants requiring minimum cash and cash equivalents and restrictions on cash held by foreign subsidiaries.

The borrowing base tied to specific assets means that Entegris's ability to borrow can decrease if the value of its accounts receivable, inventory, or fixed assets declines. The potential for a 2.25% interest rate increase if EBITDA targets are missed introduces significant financial risk and impacts the cost of borrowing.