UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2). Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
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Item 1.01. |
Entry into a Material Definitive Agreement. |
On July 26, 2022, Hooker Furnishings Corporation (the “Company”) and its wholly owned subsidiaries, Bradington-Young, LLC, Sam Moore Furniture LLC and Home Meridian Group, LLC (together with the Company, the “Borrowers”), entered into a Fourth Amendment to the Second Amended and Restated Loan Agreement (the “Amendment”) with Bank of America, N.A. (“BofA”). The Second Amended and Restated Loan Agreement dated as of September 29, 2017, had previously been amended by a First Amendment to Second Amended and Restated Loan Agreement dated as of January 31, 2019, a Second Amendment to Second Amended and Restated Loan Agreement dated as of November 4, 2020, and a Third Amendment to Second Amended and Restated Loan Agreement dated as of January 27, 2021 (as so amended, the “Existing Loan Agreement”).
Facility No. 1: Line of Credit
Under this Amendment, the expiration date of the existing $35 million Unsecured Revolving Credit Facility (“Facility No. 1”) was extended to July 26, 2027. Any amounts outstanding under Facility No. 1 will bear interest at a rate per annum, equal to the then current BSBY (adjusted periodically) plus 1.00%. The interest rate will be adjusted on a monthly basis. The use of proceeds of Facility No. 1 are to issue standby or commercial letters of credit, and for general purposes not in contravention of the Existing Loan Agreement.
Facility No. 5: 2022 Term Loan (Secured)
Under this Amendment, a new term loan was provided to the Borrowers in the principal amount of $18,000,000 (“Facility No. 5”), which was disbursed to the Company on July 26, 2022. The Borrowers are required to pay monthly interest only payments at a rate per annum equal to the then current BSBY rate (adjusted periodically) plus 0.90% on the outstanding balance until the principal is paid in full. The interest rate will be adjusted on a monthly basis. On July 26, 2027, the entire outstanding indebtedness is due in full, including all principal and interest. The Borrowers may prepay the outstanding principal at any time, without penalty provided that any payment is accompanied by all accrued interest owed. The use of proceeds of Facility No. 5 are to reimburse the Borrowers for all or a portion of the purchase price and other costs associated with the acquisition of substantially all of the assets of Sunset HWM, LLC, a Texas limited liability company (“Sunset West”). Facility No. 5 is secured by life insurance policies under a Security Agreement (Assignment of Life Insurance Policy as Collateral) dated July 26, 2022, by and between the Company and BofA. (the “Security Agreement”).
Facility No. 6: 2022 Term Loan (Unsecured)
Under this Amendment, a new term loan was provided to the Borrowers in the principal amount of $7,000,000 (“Facility No. 6”), which was disbursed to the Company on July 26, 2022. The Borrowers are required to pay monthly principal payments of $116,666.67 and monthly interest payments at a rate per annum equal to the then current BSBY (adjusted periodically) plus 1.40% on the outstanding balance until paid in full. The interest rate will be adjusted on a monthly basis. On July 26, 2027, the entire outstanding indebtedness is due in full, including all principal and interest. The Borrowers may prepay the outstanding principal at any time, without penalty provided that any payment is accompanied by all accrued interest owed. The use of proceeds of Facility No. 6 are to reimburse the Borrowers for all or a portion of the purchase price and other costs associated with the acquisition of substantially all of the assets of Sunset West.
The foregoing description of the Amendment and Security Agreement are qualified in their entirety by the full text of the same, which are attached hereto as Exhibits 10.1 and 10.2, respectively, and are incorporated herein by reference.
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Item 2.03. |
Creation of a Direct Financial Obligation or an Obligation Under an Off-Balance Sheet Arrangement of a Registrant. |
The information disclosed in Item 1.01 above is incorporated herein by reference.
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Item 9.01. |
Financial Statements and Exhibits. |
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10.1 |
* |
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10.2 |
* † |
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104 |
Cover Page Interactive Data File (embedded within the Inline XBRL document). |
* Filed herewith.
† Certain portions of this Exhibit have been redacted pursuant to Item 601(b)(10)(iv) of Regulation S-K. The Company agrees to supplementally furnish an unredacted copy of this Exhibit to the SEC upon request.
Signature
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
HOOKER FURNISHINGS CORPORATION
By: /s/ Paul A. Huckfeldt
Paul A. Huckfeldt
Chief Financial Officer and
Senior Vice-President – Finance and Accounting
Date: July 28, 2022