Key Tronic Corp. Terminates Agreement, Incurs New Obligation

TL;DR

Key Tronic terminated a deal and took on new debt. Big changes ahead.

AI Summary

Key Tronic Corp. announced on December 3, 2024, the termination of a material definitive agreement and the creation of a direct financial obligation. The company also filed financial statements and exhibits related to these events.

Why It Matters

This filing indicates a significant change in Key Tronic's contractual and financial standing, potentially impacting its future operations and financial obligations.

Risk Assessment

Risk Level: medium — The termination of a material definitive agreement and the creation of a new financial obligation suggest potential financial distress or strategic shifts that could pose risks.

Key Players & Entities

• KEY TRONIC CORP (company) — Registrant
• December 3, 2024 (date) — Date of earliest event reported
• Washington (state) — State of incorporation
• 4424 North Sullivan Road (address) — Principal executive offices
• Spokane Valley, Washington 99216 (address) — Principal executive offices
• 509-928-8000 (phone) — Registrant's telephone number

FAQ

Key Financial Figures

• $115 m — cility (the "Credit Facility") of up to $115 million, maturing on December 3, 2029. As
• $75 million — . As of December 4, 2024, approximately $75 million was outstanding under the Credit Facili
• $28 million — , 2024, the Company also entered into a $28 million term loan (the "Term Loan") credit agre
• $0.75 million — epayments of principal in the amount of $0.75 million. The remainder will be payable at matur
• $14.3 million — ses over the term of the Term Loan from $14.3 million to $25.8 million. The Company may als
• $25.8 million — of the Term Loan from $14.3 million to $25.8 million. The Company may also elect to reques
• $2 m — itments under the Term Loan of at least $2 million, provided no default or event of
• $5 million — gregate incremental commitment of up to $5 million. 2 Proceeds from the Credit Facilit
• $0.9 million — pany expects to write off approximately $0.9 million in unamortized financing fees associate

Filing Documents

• ktcc-20241203.htm (8-K) — 43KB
• a-keytronicxcreditagreemen.htm (EX-10.1) — 1707KB
• callodine_xkeytronicxxterm.htm (EX-10.2) — 1438KB
• 0000719733-24-000146.txt ( ) — 3802KB
• ktcc-20241203.xsd (EX-101.SCH) — 2KB
• ktcc-20241203_lab.xml (EX-101.LAB) — 21KB
• ktcc-20241203_pre.xml (EX-101.PRE) — 12KB
• ktcc-20241203_htm.xml (XML) — 3KB

01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT

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 Senior Secured Revolving Credit Facility On December 3, 2024, Key Tronic Corporation (the "Company") entered into an asset-based credit agreement (the "Credit Agreement") among the Company, certain domestic subsidiaries (as co-borrowers or guarantors), BMO Bank, N.A (the "Bank"), as administrative agent and swing line lender, BMO Capital Markets as arranger and book runner, and certain financial institutions, as lenders. The Credit Agreement provides for an asset-based senior secured revolving credit facility (the "Credit Facility") of up to $115 million, maturing on December 3, 2029. As of December 4, 2024, approximately $75 million was outstanding under the Credit Facility. Loans and letters of credit under the Credit Agreement are not permitted to exceed the lesser of (A) the Aggregate Commitments minus the Line Reserves (each as defined in the Credit Agreement), if any and (B) the Borrowing Base, which is determined by, among other things, specified levels of certain eligible accounts receivable and eligible inventory of the Company and certain of its subsidiaries, subject to certain reserve requirements, as further described in the Credit Agreement. The payment and performance of the Company's and co-borrowers' obligations under the Credit Facility (as well as certain cash management and bank product obligations that may be owing to the Bank or its affiliates) are guaranteed by certain of the Company's domestic subsidiaries and are secured by first-priority security interests in a substantial portion of the Company's and co-borrowers' and guarantors' existing and future assets, including accounts receivable and inventory. Generally, under the Credit Agreement and at the Company's option: (i) each SOFR Loan shall bear interest at a rate per annum equal to Adjusted Term SOFR (T

02 TERMINATION OF A MATERIAL DEFINITIVE AGREEMENT

ITEM 1.02 TERMINATION OF A MATERIAL DEFINITIVE AGREEMENT Concurrently with the entry into the Credit Agreement and the Term Loan, the Prior Credit Agreement was terminated and the Company paid all outstanding principal, interest, fees and expenses and terminated all credit commitments outstanding thereunder (such payment and termination, the " Payoff "). In connection with the Payoff, all obligations of the Company and the guarantors under the Prior Credit Agreement and the other agreements related thereto were satisfied (other than applicable obligations that expressly survive the Payoff) and all security interests and guarantees executed in connection therewith were released.

01 FINANCIAL STATEMENTS AND EXHIBITS

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS (d) Exhibits Exhibit Number Description 10.1 Credit Agreement, dated December 3, 2024 among the Company, BMO Bank, N. A. and certain other parties 10.2 Term Loan Credit Agreement, dated December 3, 2 024 among the Company, Callodine Commercial Finance, LLC and certain other parties. 104 Cover Page Interactive Data File – the cover page XBRL tags are embedded within the Inline XBRL document 3

SIGNATURES

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. KEY TRONIC CORPORATION (Registrant) Date: December 5, 2024 By: /s/ Anthony G. Voorhees Anthony G. Voorhees, Executive Vice President of Administration, CFO and Treasurer 4

View Full Filing

View this 8-K filing on SEC EDGAR