UNITED STATES
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): November 16, 2011
PSS WORLD MEDICAL, INC.
(Exact name of Registrant as specified in its charter)
Florida | 0-23832 | 59-2280364 | ||
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) | ||
4345 Southpoint Blvd., Jacksonville, Florida | 32216 | |||
(Address of principal executive offices) | (Zip Code) |
Registrants telephone number, including area code (904) 332-3000
N/A
(Former name or former address, if changed since last report)
Check the appropriate box below 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)) |
Item 1.01. Entry into a Material Definitive Agreement
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
On November 16, 2011, PSS World Medical, Inc. (the Company), together with certain of its subsidiaries (collectively, the Borrowers), entered into that certain Second Amended and Restated Credit and Security Agreement among Bank of America, N.A., as administrative agent, Merrill Lynch, Pierce, Fenner & Smith Incorporated, as sole arranger and sole book runner, and Wells Fargo Bank, National Association and JPMorgan Chase Bank, N.A., as co-syndication agents (the Credit Agreement), which amended and restated the Companys existing senior secured credit facility.
The Companys new senior secured credit facility (the Credit Facility) under the Credit Agreement consists of a five-year $300.0 million revolving credit facility, including a $20.0 million sublimit for letters of credit and a $30.0 million sublimit for swingline loans. Under certain conditions, the Borrowers may elect to increase the aggregate principal of commitments under the Credit Facility to $400.0 million, although the lenders under the Credit Facility are not obligated to provide such additional commitments. The proceeds of the borrowings under the Credit Facility will be used to finance ongoing working capital needs and for general corporate purposes.
The Credit Facility is fully and unconditionally guaranteed on a joint and several basis by substantially all of the Companys and the other Borrowers existing and future, direct and indirect domestic subsidiaries. The Credit Facility is secured by first priority security interests in, and liens on, substantially all of the Companys and its direct and indirect subsidiaries tangible and intangible assets (other than real property). The Credit Facility is further secured by first priority pledges of all the equity interests owned by the Company and each of the other Borrowers in their existing and future, direct and indirect, wholly-owned domestic subsidiaries and by first priority pledges of 66 2/3% of the equity interests owned by the Company and each of the other Borrowers in their existing and future, first-tier, wholly-owned non-domestic subsidiaries.
Borrowings under the Credit Facility will bear interest, at the Borrowers option, at either (i) LIBOR, plus an applicable margin ranging between 1.25% and 2.00% or (ii) the highest of (a) the Bank of America, N.A. prime rate, (b) the Federal Funds Rate plus 0.5%, or (c) a 30-day LIBOR rate plus 1.0%, plus in each case an applicable margin ranging between 0.25% and 1.00%. The applicable margin will be determined based on the value of the Companys inventory, accounts receivable and reserves in relation to available borrowings under the Credit Facility.
The Company is permitted to voluntarily prepay principal amounts outstanding or reduce commitments under the Credit Facility at any time, in whole or in part, without premium or penalty. In certain circumstances, including an event of default, the Company and the other Borrowers will be required to prepay outstanding amounts under the Credit Facility with the net proceeds of certain asset dispositions, casualty insurance and condemnation recovery events.
The Credit Facility contains certain affirmative and negative covenants that impose restrictions on the Companys financial and business operations, including limitations on liens, indebtedness, investments, mergers, acquisitions, distributions, redemptions and other restricted payments, asset dispositions, capital expenditures, and transactions with affiliates. Upon an event of default or if the available borrowings under the Credit Facility fall below a preset threshold, the Company will also be required to maintain a fixed charge coverage ratio of 1.0 to 1.0.
The Credit Facility contains customary events of default, including, but not limited to, failure to make payments when due under the Credit Facility; defaults under other material agreements or instruments of indebtedness; noncompliance with covenants; breaches of representations and warranties; bankruptcy and insolvency events; judgments in excess of specified amounts; failure of any guaranty, pledge agreement, security agreement supporting the Credit Facility to be in full force and effect; and a change of control.
The foregoing summary of the Credit Facility does not purport to be complete and is qualified in its entirety by reference to the Credit Agreement, which will be filed as an exhibit to the Companys next quarterly report on Form 10-Q.
Item 8.01. Other Events.
On November 18, 2011, the Company issued a press release announcing the amendment and restatement of its credit facility. This press release is attached as Exhibit 99.1 to this report and is incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
Exhibit Number |
Description | |
99.1 | Press release dated November 18, 2011. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
PSS World Medical, Inc. (Registrant) | ||
November 18, 2011 | /s/ David M. Bronson | |
By: David M. Bronson | ||
Its: Executive Vice President and Chief Financial Officer |
EXHIBIT INDEX
Exhibit |
Description | |
99.1 | Press release dated November 18, 2011. |
Exhibit 99.1
PSS World Medical Announces Amended and Restated Agreement of Its Bank Facility
Company Expands Facility Size to $300 Million
JACKSONVILLE, Fla., Nov. 18, 2011 (GLOBE NEWSWIRE) PSS World Medical, Inc. (Nasdaq:PSSI) today announced that it has amended and restated its revolving line of credit bank facility. At closing, the facility bears interest at a spread over LIBOR of 125 basis points and a 25 basis points unused facility fee, as determined by an availability-based pricing grid.
Features and key terms of the new credit facility include:
| Facility size of $300 million; |
| Accordion feature with the ability to increase facility size by up to an additional $100 million; |
| Five-year term, maturing in November 2016; and |
| Asset based structure with a borrowing base supported by accounts receivable and inventory. |
David M. Bronson, Executive Vice President and Chief Financial Officer, commented, We are very pleased by the positive response we received from the banking community. This new, expanded facility reflects the growth of the Company and will support the continued development of our core business strategies, including augmenting organic growth with a disciplined, but aggressive, acquisition pipeline.
PSS World Medical, Inc. is a specialty marketer and distributor of medical products to physicians, elder care providers and other alternate-site healthcare providers through its two business units. Since its inception in 1983, PSS has become a leader in the market segments that it serves with a focused market approach to customer services, a consultative sales force, strategic acquisitions, strong arrangements with product manufacturers and a unique culture of performance.
Certain statements in this release are forward-looking statements made pursuant to the Private Securities Litigation Reform Act of 1995 and other federal securities laws. These forward-looking statements are identified by the use of words such as expect, may, will, should, believe, plan, anticipate, and estimate among others. These statements involve a number of risks and uncertainties, many of which are outside the control of the Company. Actual results may differ materially from those identified in the forward-looking statements. Among the factors that could cause results to differ materially are the following: fluctuating demand for our products and services; national and global economic and political conditions; our and our customers ability to obtain financing; the introduction of new products and services offered by us and our competitors; uncertainty of the impact of recently enacted healthcare laws; consolidation of healthcare providers; proper functioning of our data processing and information technology systems; our ability to successfully execute our global sourcing strategy; pricing pressures on large national and regional accounts and GPOs; customer credit quality and our ability to collect our accounts receivable, particularly in states with significant budget deficits; our ability to successfully execute our mergers and acquisitions strategy; our ability to compete with other medical supply companies and direct manufacturers; multi-tiered cost structures where certain institutions can obtain more favorable prices for medical products than us; our ability to maintain relationships with our suppliers and customers; our ability to retain sales reps and key management; our ability to execute our growth strategy; increased operating costs, including fuel and other commodity prices; risks involved in maintaining a large amount of inventory; our indebtedness may limit our ability to obtain additional financing or react to market conditions; we face litigation and product liability exposure; weather-related events such as hurricanes may disrupt our and our customers business; we may be deemed to infringe other persons intellectual property; our and our customers businesses are subject to numerous federal, state and foreign laws and regulations that could impact our and their financial condition and results of operations; general business, competitive and economic factors and conditions; and other factors described from time to time in the Companys reports filed with the Securities and Exchange Commission. PSS World Medical, Inc. assumes no obligation to update the information in this release except as otherwise required by law. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date hereof.
CONTACT: | PSS World Medical |
Investor Relations |
904-332-3287 |
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