UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
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ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
On July 31, 2024, Carriage Services, Inc. (the “Company”) entered into a fourth amendment (the “Credit Agreement Amendment”) to its first amended and restated credit agreement dated May 13, 2021 (as amended, the “Amended Credit Agreement”), with the financial institutions party thereto, as lenders, and Bank of America, N.A., as administrative agent. The Credit Agreement Amendment provides, among other things, for (i) the extension of the maturity date of the Amended Credit Agreement to July 31, 2029, provided that, if the Senior Notes (as defined in the Amended Credit Agreement) have a stated maturity date that is prior to July 31, 2029, then the maturity date shall instead be the date that is 91 days prior to the stated maturity date of the Senior Notes; (ii) the establishment of Term SOFR as a benchmark rate and the removal of BSBY from the Amended Credit Agreement, including conforming revisions to certain defined terms under the Amended Credit Agreement; (iii) the conversion of each existing BSBY Rate Loan (as defined in the Amended Credit Agreement prior to giving effect to the Credit Agreement Amendment) to a Term SOFR Loan (as defined in the Credit Agreement Amendment); (iv) modifications to the definitions of “Applicable Rate” and “Applicable Fee Rate” to change the applicable rates and pricing levels set forth in each pricing grid; (v) the removal of certain mandatory prepayments arising from the issuance of either Equity Interests or Debt (as both are defined by the Amended Credit Agreement); and (vi) modifications to the permitted investments covenant, relating to the Company’s ability to make certain acquisitions, subject to the satisfaction of certain conditions therein.
As of the effective date of the Credit Agreement Amendment and through and including the date the Company’s compliance certificate is delivered for the fiscal quarter ending June 30, 2024, interest accrues on amounts outstanding under the Amended Credit Agreement based on Pricing Level 4 set forth below, and thereafter based on the Company’s Total Leverage Ratio (as defined in the Amended Credit Agreement), in accordance with the following pricing grid:
| Applicable Rate | ||||||
| Pricing Level |
Total Leverage Ratio |
Term SOFR / Letter of Credit Fees |
Base Rate | |||
| 1 | < 3.00:1.00 | 1.625% | 0.625% | |||
| 2 | < 3.50:1.00 but ≥ 3.00:1.00 | 1.875% | 0.875% | |||
| 3 | < 4.25:1.00 but ≥ 3.50:1.00 | 2.125% | 1.125% | |||
| 4 | ≥ 4.25:1.00 | 2.500% | 1.500% | |||
Immediately after giving effect to the Credit Agreement Amendment, the Company had borrowings of approximately $151.0 million in principal amount outstanding and had approximately $96.4 million available for additional borrowing under the Amended Credit Agreement after giving effect to approximately $2.6 million of outstanding letters of credit.
The foregoing description of the Credit Agreement Amendment is qualified in its entirety by reference to the Credit Agreement Amendment, a copy of which is attached hereto as Exhibit 10.1, and incorporated by reference herein.
ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION.
In the press release dated July 31, 2024, the Company announced and commented on its financial results for its fiscal quarter ended June 30, 2024. A copy of the press release issued by the Company is attached hereto as Exhibit 99.1 and incorporated by this reference.
The Company’s press release dated July 31, 2024, contains non-GAAP financial measures. Generally, a non-GAAP financial measure is a numerical measure of a company’s performance, financial position, or cash flows that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with United States generally accepted accounting principles, or GAAP. Pursuant to the requirements of Regulation G, the Company has provided quantitative reconciliations within the press release of the non-GAAP financial measures to the most directly comparable GAAP financial measures.
In accordance with General Instruction B.2 of Form 8-K, the foregoing information, including Exhibit 99.1, shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall such information and Exhibit 99.1 be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
ITEM 2.03 CREATION OF A DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION UNDER AN OFF-BALANCE SHEET ARRANGEMENT OF A REGISTRANT
The disclosures above under Item 1.01 of this Current Report on Form 8-K are also responsive to Item 2.03 of this Current Report on Form 8-K and are hereby incorporated by reference into this Item 2.03.
| ITEM 9.01 | FINANCIAL STATEMENTS AND EXHIBITS. |
| Exhibit |
Description | |
| 10.1 | Fourth Amendment to First Amended and Restated Credit Agreement dated as of July 31, 2024, among Carriage Services, Inc., the guarantors party thereto, the financial institutions party thereto, as lenders, and Bank of America, N.A., as administrative agent, swing line lender and L/C issuer. | |
| 99.1 | Press Release dated July 31, 2024. | |
| 101 | Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document | |
| 104 | The cover page from this Current Report on Form 8-K, formatted as Inline XBRL | |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, Carriage Services, Inc. has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| CARRIAGE SERVICES, INC. | ||||
| Dated: July 31, 2024 | By: | /s/ Steven D. Metzger | ||
| Steven D. Metzger | ||||
| President and Secretary | ||||