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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): December 8, 2000
DAY RUNNER, INC.
(Exact name of registrant as specified in its charter)
DELAWARE
(State or other jurisdiction of incorporation)
0-19835 95-3624280
(Commission File Number) (I.R.S. Employer Identification No.)
2750 W. Moore Avenue
Fullerton, CA 92833
(Address of principal executive offices)
Registrant's telephone number, including area code: (714) 680-3500
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ITEM 5. Other Events
On September 23, 1998, the Company entered into a $160,000,000
Revolving Loan Agreement (the "Loan Agreement") with Wells Fargo Bank,
National Association ("Wells Fargo") as the sole bank and as agent (in its
agency capacity, the "Agent"). Effective November 24, 1998, the amount was
voluntarily reduced to $145,000,000 and unamortized financing fees of
approximately $84,000 were charged to interest expense. The loan facility was
syndicated with a group of lenders in December 1998. During the year ended
June 30, 1999, under the terms of the Loan Agreement, the Company paid the
Agent a financing fee of $1,200,000, $40,000 of which was charged to interest
expense during the quarter ended September 30, 1999.
On October 12, 1999, the Company, the Agent and the lenders amended
and restated the Loan Agreement (the "First Amended Loan Agreement"). The
First Amended Loan Agreement converted the entire revolving loan availability
into a term loan portion of $90,444,000 and a maximum revolving loan
availability of $29,556,000. The term loan matured on September 30, 2001 and
the revolving credit loan facility matured on October 31, 2000. The maturity
date of the revolving credit loan facility could have been automatically
extended through September 30, 2001, if the Company had achieved as of June
30, 2000, compliance with certain requirements, including a minimum EBITDA, a
minimum fixed charge coverage ratio and a maximum funded senior debt ratio,
as defined in the First Amended Loan Agreement. The Company did not satisfy
these conditions. As a result of entering into the First Amended Loan
Agreement, unamortized deferred financing fees due under the Loan Agreement
of approximately $955,000 were charged to interest expense in October 1999.
At September 30, 2000, the Company had $107,841,000 outstanding under the
First Amended Loan Agreement.
On December 8, 2000, the Company, the Agent and the lenders amended
and restated the First Amended Loan Agreement effective as of November 1,
2000 (the "Second Amended Loan Agreement") and waived any Events of Default
that had previously occurred and not been waived. The Second Amended Loan
Agreement (i) converted the $87,163,875.13 then outstanding aggregate
principal amount of term loans issued under the First Amended Loan Agreement
into three loans: two term loans (in the principal amounts of $20,000,000 and
$40,000,000, denoted as Term Loan A and Term Loan B, respectively) and a
convertible term loan (in the principal amount of $27,163,875.13); and (ii)
provided for a revolving credit facility that was initially $25,000,000 and
adjusts periodically as follows: $25,000,000 to and including December 8,
2000, $19,500,000 from and including December 9, 2000 to and including
December 31, 2000, $15,000,000 from and after January 1, 2001 to and
including March 31, 2002, $0 from and after April 1, 2002. The maximum amount
that can be borrowed under the revolving credit facility is the lowest of (i)
the amount of the revolving facility then in effect, (ii) "Available Amount,"
and (iii) from and after February 1, 2001, the Borrowing Base as set forth in
the most recent Borrowing Base Certificate submitted by the Company, as
adjusted by the Agent. The "Available Amount" is defined in Second Amended
Loan Agreement as: October 1, 2000 through December 8, 2000, $25,000,000;
December 9, 2000 through December 31, 2000, $19,500,000; January 1, 2001
through February 28, 2001, $12,000,000; March 1, 2001 through April 30, 2001,
$8,000,000; May 1, 2001 through June 30, 2001, $10,000,000; July 1, 2001
through December 31, 2001, $15,000,000; January 1, 2002 through March 31,
2002, $10,000,000; April 1, 2002 through July 31, 2002, $0. The maturity date
for the two term loans, the convertible term loan and the revolving loans
issued under the Second Amended Loan Agreement is July 1, 2002.
Term loan B has a $30,000,000 installment due January 31, 2001 (to
which installment any asset sales proceeds are to be applied). The
convertible term loan is convertible by the lenders, in whole or in part,
into common stock of the Company from and after February 1, 2001 at the rate
of $1.15 of the principal amount of the convertible term loan for each share
of the Company's common stock. The maximum number of shares of the Company's
common stock into which the convertible term loan can be converted is
23,200,000 shares.
The rate of interest on the loans under the Second Amended Loan
Agreement is as follows: on revolving credit loans, the Agent's prime rate
plus two percent per annum; on Term Loan A, the Agent's prime rate plus two
percent per annum; on Term Loan B, prior to June 30, 2001, the Agent's prime
rate plus four percent per annum (except for cash interest paid on the
portion of Term Loan B denoted as Foreign Currency Loans), and on and
following June 30, 2001, and for cash interest paid on Foreign Currency
Loans, the Agent's prime rate plus two percent per annum; on the convertible
term loan, the Agent's prime rate plus four percent per annum. Interest is
payable monthly in cash except that, at the option of the Company, through
and including June 30, 2001, interest accrued on Term Loan B may be paid in
the form of new notes having terms identical to Term Loan B (except for
interest on the portion of Term Loan B denoted as Foreign Currency Loans
which must be paid in cash) and interest accrued on the convertible term loan
may at any time be paid in the form of new notes having terms identical to
the
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convertible term loan. Interest on certain loans under the First Amended Loan
Agreement in the amount of $2,257,677 is payable on December 31, 2000. There
is a commitment fee of .675 percent (67.5 basis points) payable quarterly on
the average daily amount by which the Available Amount exceeds the average
daily principal amount of outstanding revolving loans.
The Second Amended Loan Agreement is secured by the Company's assets
and includes, among other things, financial covenants requiring maintenance of
(i) a minimum fixed charge coverage ratio (which becomes operative June 30,
2001), (ii) a minimum EBITDA (which becomes operative December 31, 2000), and a
(iii) maximum funded senior debt coverage ratio (which becomes operative June
30, 2001), all as defined in the Second Amended Loan Agreement. The Second
Amended Loan Agreement also limits, among other things, the incurrence of liens
and other indebtedness, mergers, consolidations, the sales of assets, lease
obligations, annual capital expenditures, advances, investments and loans by the
Company and its subsidiaries, dividends, stock repurchases and certain
transactions with affiliates.
Copies of the Second Amended Loan Agreement and the related press
release are attached as exhibits hereto and are incorporated herein by
reference.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
c) Exhibits
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Item No.
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10.1 Second Amended and Restated Loan Agreement dated as of
November 1, 2000 among the Registrant, Day Runner UK plc,
Filofax Limited, the Lenders named therein and Wells Fargo
Bank, National Association, as Administrative Agent
99.1 Press Release issued December 13, 2000 by the Registrant
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SIGNATURE
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.
DAY RUNNER, INC.
By: /s/ John F. Ausura
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John F. Ausura
Chief Executive Officer
Dated: December 15, 2000
EXHIBIT INDEX
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Exhibit Description Page
No. No
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10.1 Second Amended and Restated Loan Agreement dated as of
November 1, 2000 among the Registrant, Day Runner UK plc,
Filofax Limited, the Lenders named herein and Wells Fargo
Bank, National Association, as Administrative Agent
99.1 Press Release issued December 13, 2000
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