Douglas Dynamics Completes New A Term Loan and Revolving Credit Facilities
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MILWAUKEE, June 14, 2021 (GLOBE NEWSWIRE) – Douglas Dynamics, Inc. (NYSE: PLOW), the leading manufacturer and installer of work truck accessories and equipment in North America, today announced it has refinanced its $ 375 million senior secured credit facility with a new $ 225 million A term loan facility and a $ 100 million senior secured revolving credit facility maturing in June 2026.
“We believe this refinancing transaction provides us with the right capital structure to successfully execute our future growth strategies for the foreseeable future. The new facilities reduce our overall debt profile, strengthen our solid financial position and guarantee us the flexibility to invest in the business, while continuing to seek external growth opportunities in the years to come ”, explained Sarah Lauber. , CFO.
Proceeds from borrowings under the New Term Loan Facility A and the Senior Secured Revolving Credit Facility will be used for general corporate purposes, including the repayment of all borrowings under the Senior Secured Credit Facility. The Company’s previous $ 275 million B term loan facility maturing in 2026 and its previous $ 100 million senior secured revolving credit facility.
The new credit agreement provides for a term loan facility A in the amount of $ 225 million and a senior secured revolving credit facility in the amount of $ 100 million. The Company may also request increases in revolving commitments and / or additional term loans for an aggregate amount not to exceed $ 175 million. The A Term Loan Facility will bear interest at LIBOR plus a margin ranging from 1.375% to 2.00%, depending on the Company’s leverage ratio as defined in the Credit Agreement.
The new credit agreement includes the usual representations, guarantees and negative and affirmative covenants, as well as the usual events of default and certain cross-default provisions that could result in acceleration of the credit agreement which are similar to the related provisions of the company’s former B-term loan. and revolving credit facilities. In addition, the credit agreement requires that the company have a leverage ratio not exceeding 3.50 to 1.00 on the last day of any fiscal quarter beginning with the fiscal quarter ending June 30, 2021 and that it have a Consolidated interest coverage ratio, as defined in the credit agreement, of at least 3.00 to 1.00 on the last day of any fiscal quarter beginning with the fiscal quarter ending June 30, 2021. The agreement also includes a clause allowing the Company to increase its financial leverage ratio from 3.50 to 1.00 to 4.00 to 1.00 for four quarters in the event that the Company makes an acquisition of a value equal to or greater than $ 75 million.
JPMorgan Chase Bank, NA acted as administrative agent, JP Morgan Chase Bank, NA and CIBC Bank USA, acted as principal arranger and associate bookkeepers, CIBC Bank USA acted as agent of syndication, and Bank of America, NA and Citizens Bank, NA acted as co-documentation agents. Foley & Lardner LLP acted as legal counsel to the company.
About Douglas Dynamics
Home to the most trusted brands in the industry, Douglas Dynamics is the leading manufacturer and installer of commercial work truck accessories and equipment in North America. For more than 70 years, the company has been innovating products that not only enable people to do their jobs more effectively and efficiently, but also enable businesses to increase their profitability. Through its proprietary Douglas Dynamics Management System (DDMS), the company is committed to continuous improvement aimed at consistently producing the highest quality products, at industry-leading service and delivery levels which ultimately , generate value for shareholders. Douglas Dynamics’ product and service portfolio is divided into two segments: First, the work truck accessories segment, which includes commercial snow and ice control equipment sold under the brands FISHER®, SNOWEX® and WESTERN®. Second, the Work Truck Solutions segment, which includes the upgrade of market leading accessories and storage solutions under the HENDERSON® brand, and the DEJANA® brand and its associated sub-brands.
This press release contains certain forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. These statements include information relating to future events, future financial performance, strategies, expectations, the competitive environment, regulations, demand for products, payment of dividends and the availability of financial resources. These statements are often identified by the use of words such as “anticipate”, “believe”, “intend”, “estimate”, “expect”, “continue”, “should”, “could”. “,” Could “,” “project”, “predict”, “will” and similar expressions and include references to assumptions and relate to our future prospects, developments and business strategies. These statements involve known and unknown risks, uncertainties and other factors that could cause our actual results, performance or achievements to differ materially from future results, performance or achievements expressed or implied by these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to weather conditions, in particular the lack or reduction of snowfall and the timing of such snowfall, our ability to manage economic conditions , commercial and general geopolitics, including the impacts of natural disasters, pandemics and epidemics of contagious diseases and other developments unfavorable to public health, such as the COVID-19 pandemic, our inability to maintain good relations with our distributors, our inability to maintain good relationships with the original equipment manufacturers with whom we do significant business, lack of available or favorable financing options for our end users, distributors or customers, price increases of steel or other materials, including by reason of tariffs, necessary for the production of our products which do not which cannot be passed on to our distributors, increases in the price of fuel or freight, a significant decrease in economic conditions, the inability of our suppliers and original equipment manufacturer partners to meet our volume or production requirements. quality, inaccuracies in our estimates of future demand for our products, our inability to protect or continue to develop our intellectual property portfolio, the effects of laws and regulations and their interpretations on our business and financial condition, our inability to develop new products or to improve existing products in response to the needs of end users, losses due to legal action resulting from personal injury associated with our products, factors that could impact the future declaration and payment of dividends, our inability to compete effectively, our inability cited to achieve the expected financial performance with the assets of Dejana Truck & Utility Equipment Company, Inc., which we acquired in 2016, and unforeseen costs or liabilities related to these acquisitions or any future acquisitions, as well as those discussed in the section titled “R isk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2020 and any subsequent filings on Form 10-Q. You should not place undue reliance on these forward-looking statements. In addition, the forward-looking statements in this press release speak only as of the date hereof and we do not undertake, except as required by law, to update or issue revisions to any forward-looking statements, even if new information becomes available in the future.
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Douglas Dynamics, Inc.