Quarterly report pursuant to Section 13 or 15(d)

Subsequent Event

v3.19.3
Subsequent Event
9 Months Ended
Sep. 30, 2019
Subsequent Events [Abstract]  
Subsequent Events SUBSEQUENT EVENTS

In November 2019 we announced the planned shutdown of our commercial production line in our South Gate, California plant. Products currently produced on this line will be transitioned to our other U.S. plants, with an expected shutdown of this line on January 3, 2020. As a result of this shutdown, we expect to record accelerated depreciation on the production line assets of between $5 million and $10 million during the next quarter.

On November 1, 2019, we entered into a First Amendment to our Credit Agreement (the "Amendment"). The Amendment amends the Credit Agreement to, among other things, decrease the size of the Credit Facility to $100 million, consisting of a $75 million revolving facility and a $25 million term loan facility (the "Amended Credit Facility"), and converts term loans outstanding in excess of $25 million to revolver borrowings.

The Amendment also modified certain of the Credit Agreement financial covenants. Specifically, the Amended Credit Facility requires that we and our subsidiaries not:

Permit the Consolidated Net Leverage Ratio (as defined in the Amendment) to be greater than: (i) 3.00 to 1.00 from the effective date of the Amendment to December 31, 2019, (ii) 3.75 to 1.00 from January 1, 2020 through March 31, 2020, (iii) 2.50 to 1.00 from April 1, 2020 through June 30, 2020, and (iv) 2.00 to 1.00 from July 1, 2020 and thereafter;
Permit the Consolidated Fixed Charge Coverage Ratio (as defined in the Amendment at any time to be less than 1.25 to 1.00, provided that (i) the aggregate amount of all Capital Expenditures for the period ending September 30, 2019 will be deemed to be $16.5 million for purposes of calculating the Consolidated Fixed Charge Coverage Ratio and (ii) the Consolidated Fixed Charge Coverage Ratio will not be tested for the periods ending December 31, 2019 and March 31, 2020; and
Permit Consolidated EBITDA (as defined in the Amendment) to be less than (i) $20 million for the period ending December 31, 2019 and (ii) $15 million for the period ending March 31, 2020.