SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 29, 2014
SANDERSON FARMS, INC.
(Exact name of registrant as specified in its charter)
Mississippi | 1-14977 | 64-0615843 | ||
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(I.R.S. Employer Identification No.) | ||
127 Flynt Road Laurel, Mississippi |
39443 | |||
(Address of principal executive offices) | (Zip Code) |
(601) 649-4030
(Registrants telephone number, including area code)
Not applicable.
(Former name or former address, if changed since last report)
Check the appropriate box if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Section 1 Registrants Business and Operations
Item 1.01 Entry into a Material Definitive Agreement.
On October 29, 2014, the Registrant entered into an amendment to its Credit Agreement dated October 23, 2013 with BMO Harris Bank, N.A., as Agent and letter of credit issuer and BMO Harris Financing, Inc.; Regions Bank; AgFirst Farm Credit Bank; U.S. Bank National Association; Farm Credit Services of America, PCA; Farm Credit Bank of Texas; Trustmark National Bank; Bank of the West; Farm Credit Mid-America, PCA; United FCS, PCA d/b/a FCS Commercial Finance Group; GreenStone Farm Credit Services, ACA/FLCA; Farm Credit West, PCA; AgStar Financial Services, PCA; 1st Farm Credit Services, PCA; Northwest Farm Credit Services, PCA and American AgCredit, PCA.
The amendment increased the Credit Agreements limitation on the Registrants general capital expenditures from $65,000,000 to $75,000,000 per fiscal year. The amendment also increased the amount not actually spent in capital expenditures in the preceding fiscal year that the Registrant may carry over to the next fiscal year from $10,000,000 per fiscal year to $15,000,000 per fiscal year. Finally, the amendment increased the amount that the Registrant may spend in capital expenditures in connection with its new poultry complex in Palestine, Texas from $140,000,000 to $155,000,000.
A copy of the amendment is filed as Exhibit 10 to this report and is incorporated herein by reference. The description above is a summary of the amendment and is qualified in its entirety by the complete text of the amendment.
Some of the lenders under the credit facility or their affiliates have, or may have in the future, various relationships with the Registrant and its affiliates involving the provision of financial services. As of the date of this report, the following such relationships exist, some of which may be material:
| Trustmark National Bank is the trustee of the Employee Stock Ownership Plan and Trust of Sanderson Farms, Inc. and Affiliates. |
| The Registrant maintains regular deposit accounts with Regions Bank, including its payroll accounts and cash management accounts, and the Registrant pays Regions Bank a fee for cash management services provided to the Registrant. Regions Bank also maintains the trust account for the Registrants health benefit plan and trust. In addition, the Registrant has approximately $923,000 in operating leases outstanding to Regions Bank for certain equipment, primarily trucks, trailers and tractors. |
| Northwest Farm Credit Services, PCA purchased $50,000,000 of senior notes due April 28, 2016 of the Registrant in a private placement pursuant to a Note Purchase Agreement dated April 28, 2006 with the Registrant, of which $20,000,000 remains outstanding. |
| Finally, one of the Registrants directors, Toni D. Cooley, is a director of Trustmark National Bank and its parent company, Trustmark Corporation. |
Section 9 Financial Statements and Exhibits
Item 9.01 Financial Statements and Exhibits.
(d) The following exhibits are furnished with this Current Report:
Exhibit |
Description | |
10 | First Amendment to Credit Agreement dated October 29, 2014 among Sanderson Farms, Inc., and the Banks party thereto. |
SIGNATURES
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.
SANDERSON FARMS, INC.
(Registrant)
Date: November 4, 2014 | By: | /s/ D. Michael Cockrell |
||||||
D. Michael Cockrell | ||||||||
Treasurer and Chief Financial Officer |
EXHIBIT INDEX
Exhibit No. |
Description | |
10 | First Amendment to Credit Agreement dated October 29, 2014 among Sanderson Farms, Inc., and the Banks party thereto. |
Exhibit 10
SANDERSON FARMS, INC.
FIRST AMENDMENT TO CREDIT AGREEMENT
This First Amendment to Credit Agreement (herein, the Amendment) is entered into as of October 29, 2014, among Sanderson Farms, Inc., a Mississippi corporation, the Banks party hereto, and BMO Harris Bank N.A., as Agent for the Banks, (Agent).
PRELIMINARY STATEMENTS
A. The Company, the several financial institutions from time to time party thereto, and the Agent are parties to a Credit Agreement dated as of October 24, 2013 (the Credit Agreement). All capitalized terms used herein without definition shall have the same meanings herein as such terms have in the Credit Agreement.
B. The Company has requested that the Required Banks amend the Credit Agreement, and the Required Banks are willing to do so on the terms and conditions set forth in this Amendment.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:
1. AMENDMENTS.
Upon satisfaction of all of the conditions precedent set forth in Section 2 hereof, the Credit Agreement shall be amended to read as follows:
1.1. Section 7.11 of the Credit Agreement shall be amended to read as follows:
Section 7.11. Capital Expenditures. (a) The Company will not, and will not permit any Subsidiary to, spend or be obligated to spend during any fiscal year for capital expenditures (as defined and classified in accordance with generally accepted accounting principles as, with respect to the definition and classifications of operating leases, existing on the date of this Credit Agreement, consistently applied, including without limitation any such capital expenditures in respect of Capitalized Leases but excluding any acquisition permitted by Section 7.14(d) which might constitute such a capital expenditure and the capital expenditures permitted by clause (b) below) in an aggregate amount for the Company and its Subsidiaries in excess of $65,000,000 for the Companys fiscal year ending October 31, 2013 and $75,000,000 for each fiscal year of the Company thereafter, plus in each case up to $15,000,000 (the Carryover Amount) permitted to be spent in the preceding fiscal year but not actually spent therein. For purposes of this Section, any capital expenditures made in any fiscal year shall be applied first to the Carryover Amount, if any, available during such fiscal year.
(b) The Company will not, and will not permit any Subsidiary to, spend or be obligated to spend capital expenditures (as defined and classified in accordance with generally accepted accounting principles consistently applied) in connection with the construction of (i) the New Processing Complex located in Palestine, Texas in excess of $155,000,000 during the term of this Agreement, and (ii) any other New Processing Complex, in excess of $140,000,000 with respect to each such New Processing Complex during the term of this Agreement.
2. CONDITIONS PRECEDENT.
The effectiveness of this Amendment is subject to the satisfaction of all of the following conditions precedent:
2.1. The Company and the Required Banks shall have executed this Amendment.
2.2. Each Guarantor Subsidiary shall have executed the Guarantors Acknowledgment attached hereto.
3. REPRESENTATIONS AND WARRANTIES.
3.1. Each of the representations and warranties set forth in Section 5 of the Credit Agreement is true and correct.
3.2. The Company is in full compliance with all of the terms and conditions of the Credit Agreement and no Event of Default or Potential Default has occurred and is continuing thereunder or shall result after giving effect to this Amendment.
4. MISCELLANEOUS.
4.1. Reference to this specific Amendment need not be made in any note, document, letter, certificate, the Credit Agreement itself, the Revolving Notes, or any communication issued or made pursuant to or with respect to the Credit Agreement or the Revolving Notes, any reference to the Credit Agreement being sufficient to refer to the Credit Agreement as amended hereby.
4.2. This Amendment may be executed in any number of counterparts, and by the different parties on different counterparts, all of which taken together shall constitute one and the same agreement. Any of the parties hereto may execute this Amendment by signing any such counterpart and each of such counterparts shall for all purposes be deemed to be an original. This Amendment shall be governed by the internal laws of the State of Illinois.
[SIGNATURE PAGES TO FOLLOW]
-2-
This Amendment is entered into as of the date and year first above written.
SANDERSON FARMS, INC. | ||||
By |
/s/ D. Michael Cockrell | |||
Its | Treasurer and Chief Financial Officer |
Accepted and agreed to as of the date and year first above written.
BMO HARRIS BANK N.A., as Agent and an L/C Issuer | ||||
By |
/s/ Andre Bonakdar | |||
Its | Director |
Signature Page
Sanderson Farms, Inc.
First Amendment to Credit Agreement
LENDERS | ||||
BMO HARRIS FINANCING, INC. | ||||
By |
/s/ Andre Bonakdar | |||
Its | Director |
Signature Page
Sanderson Farms, Inc.
First Amendment to Credit Agreement
AGFIRST FARM CREDIT BANK | ||||
By | /s/ Matthew H. Jeffords | |||
Its | Vice President |
Signature Page
Sanderson Farms, Inc.
First Amendment to Credit Agreement
FARM CREDIT BANK OF TEXAS | ||||
By | /s/ Alan Robinson | |||
Its | Vice President |
Signature Page
Sanderson Farms, Inc.
First Amendment to Credit Agreement
FARM CREDIT SERVICES OF AMERICA, PCA | ||||
By | /s/ Bruce Dean | |||
Its | Vice President |
Signature Page
Sanderson Farms, Inc.
First Amendment to Credit Agreement
REGIONS BANK | ||||
By | /s/ Stanley A. Herren | |||
Its | Senior Vice President |
Signature Page
Sanderson Farms, Inc.
First Amendment to Credit Agreement
BANK OF THE WEST | ||||
By | /s/ Trevor Svoboda | |||
Its | Vice President |
Signature Page
Sanderson Farms, Inc.
First Amendment to Credit Agreement
1ST FARM CREDIT SERVICES, PCA | ||||
By |
/s/ Lee Fuchs | |||
Its | Vice President, Capital Markets Group |
Signature Page
Sanderson Farms, Inc.
First Amendment to Credit Agreement
AGSTAR FINANCIAL SERVICES, PCA | ||||
By |
/s/ Graham Dee | |||
Its | AVP Capital Markets |
Signature Page
Sanderson Farms, Inc.
First Amendment to Credit Agreement
FARM CREDIT MID-AMERICA, PCA | ||||
By |
/s/ Matthew Dixon | |||
Its | Credit Officer-Capital Markets |
Signature Page
Sanderson Farms, Inc.
First Amendment to Credit Agreement
UNITED FCS, PCA d/b/a FCS COMMERCIAL FINANCE GROUP | ||||
By |
/s/ Lisa Caswell | |||
Its | Vice President |
Signature Page
Sanderson Farms, Inc.
First Amendment to Credit Agreement
NORTHWEST FARM CREDIT SERVICES, PCA | ||||
By |
/s/ Candy Boswell | |||
Its | Vice President |
Signature Page
Sanderson Farms, Inc.
First Amendment to Credit Agreement
TRUSTMARK NATIONAL BANK | ||||
By |
/s/ William H. Edwards | |||
Its | Senior Vice President |
Signature Page
Sanderson Farms, Inc.
First Amendment to Credit Agreement
GREENSTONE FARM CREDIT SERVICES, ACA/FLCA | ||||
By |
/s/ Curtis Flammini | |||
Its | Vice President |
Signature Page
Sanderson Farms, Inc.
First Amendment to Credit Agreement
U.S. BANK NATIONAL ASSOCIATION | ||||
By | /s/ Michael N. Ryno | |||
Its | Vice President |
Signature Page
Sanderson Farms, Inc.
First Amendment to Credit Agreement
AMERICAN AGCREDIT, PCA | ||||
By | /s/ Bradley K. Leafgren | |||
Its | Vice President |
Signature Page
Sanderson Farms, Inc.
First Amendment to Credit Agreement
FARM CREDIT WEST, PCA | ||||
By | /s/ Robert Stornetta | |||
Its | Vice President |
Signature Page
Sanderson Farms, Inc.
First Amendment to Credit Agreement
GUARANTORS ACKNOWLEDGMENT
The undersigned, each of which has executed and delivered to the Banks a Guaranty Agreement dated as of October 24, 2013 (the Guaranty Agreement), hereby acknowledges the amendment of the Credit Agreement as set forth above and agrees that all of the Companys indebtedness, obligations and liabilities to the Banks and the Agent under the Credit Agreement, as amended by the foregoing Amendment, and the Notes is and shall continue to be entitled to the benefits of said Guaranty Agreement. The undersigned further agree that the Acknowledgment or consent of the undersigned to any further amendments of the Credit Agreement shall not be required as a result of this Acknowledgment having been obtained, except to the extent, if any, required by the Guaranty Agreement.
Dated as of October 29, 2014.
SANDERSON FARMS, INC. (FOODS DIVISION) | ||||
By | /s/ D. Michael Cockrell | |||
Its | Treasurer and Chief Financial Officer | |||
SANDERSON FARMS, INC. (PRODUCTION DIVISION) | ||||
By | /s/ D. Michael Cockrell | |||
Its | Treasurer and Chief Financial Officer | |||
SANDERSON FARMS, INC. (PROCESSING DIVISION) | ||||
By | /s/ D. Michael Cockrell | |||
Its | Treasurer and Chief Financial Officer |