Kirkland's Inc. Enters Material Agreement, New Financial Obligation

TL;DR

**Kirkland's just took on a new financial obligation, watch for details on its impact.**

AI Summary

Kirkland's, Inc. filed an 8-K on January 26, 2024, reporting an event that occurred on January 25, 2024, concerning the entry into a material definitive agreement and the creation of a direct financial obligation. This filing indicates a significant change in the company's financial structure or commitments, which could impact its liquidity, future earnings, or operational flexibility. Investors should pay close attention to the details of this agreement as it could affect the company's valuation and risk profile.

Why It Matters

This filing signals a new financial commitment for Kirkland's, Inc., which could affect its balance sheet and future profitability. Investors need to understand the nature and terms of this obligation to assess its potential impact on the stock.

Risk Assessment

Risk Level: medium — The filing indicates a new financial obligation without providing specific details, creating uncertainty about its potential positive or negative impact on the company.

Analyst Insight

A smart investor would await further details on the 'Material Definitive Agreement' and 'Direct Financial Obligation' to understand their terms, size, and potential impact on Kirkland's, Inc.'s financial health before making any investment decisions.

Key Players & Entities

• KIRKLAND'S, INC (company) — the registrant filing the 8-K
• January 26, 2024 (date) — the filing date of the 8-K
• January 25, 2024 (date) — the date of the earliest event reported
• 000-49885 (string) — Commission File Number
• 62-1287151 (string) — I.R.S. Employer Identification No.
• 5310 Maryland Way, Brentwood, Tennessee 37027 (string) — principal executive offices address
• 615-872-4800 (string) — registrant's telephone number
• KIRK (string) — trading symbol for Common Stock
• NASDAQ Global Select Market (string) — exchange where Common Stock is registered

FAQ

Key Financial Figures

• $12 million — he FILO Credit Agreement provides for a $12 million “first-in, last-out” dela
• $90 million — spects to the Company’s existing $90 million revolving credit facility (the “
• $5 million — he Company is required to draw at least $5 million (“Tranche A Loan”) on or
• $7 m — itional draws of the FILO Loan of up to $7 million, in increments of $1 million (the
• $1 million — n of up to $7 million, in increments of $1 million (the “Tranche B Loan”). T
• $32.0 million — ngs under the FILO Credit Agreement and $32.0 million in borrowings under the Existing Credit
• $21.5 million — ing Credit Agreement with approximately $21.5 million available for borrowing under the combi

Filing Documents

• kirk-20240125.htm (8-K) — 57KB
• kirk-ex10_1.htm (EX-10.1) — 1254KB
• kirk-ex10_2.htm (EX-10.2) — 1469KB
• kirk-ex99_1.htm (EX-99.1) — 11KB
• img181585134_0.jpg (GRAPHIC) — 28KB
• 0000950170-24-007706.txt ( ) — 3375KB
• kirk-20240125.xsd (EX-101.SCH) — 29KB
• kirk-20240125_htm.xml (XML) — 4KB

01 Entry into a Material Definitive Agreement

Item 1.01 Entry into a Material Definitive Agreement. On January 25, 2024, Kirkland’s, Inc. (the “Company”), entered into a Term Loan Credit Agreement (the “FILO Credit Agreement”), by and among the Company, which together with one of its subsidiaries, serves as a guarantor thereunder, the remaining of the Company’s subsidiaries as borrowers (the “Borrowers”), and Gordon Brothers Group (the “FILO Lender”), via an affiliate entity, 1903P Loan Agent, LLC, as administrative agent and lender. The FILO Credit Agreement provides for a $12 million “first-in, last-out” delayed-draw asset-based term loan (the “FILO Loan”). The indebtedness under the FILO Loan is subordinated in most respects to the Company’s existing $90 million revolving credit facility (the “Existing Credit Facility”) with Bank of America, N. A. Also on January 25, 2024, the Company entered into an amendment with Bank of America to its Existing Credit Facility to permit the FILO Loan. The Company did not draw on the FILO Loan at closing. However, the Company is required to draw at least $5 million (“Tranche A Loan”) on or before April 1, 2024 (the “Delayed-Draw Deadline”). If the Company does not make an initial draw of the Tranche A Loan prior to the Delayed-Draw Deadline, the FILO Loan will terminate, and the Company will no longer be permitted to make draws of the FILO Loan in any amount. However, if the Company makes the initial draw of the Tranche A Loan on or before the Delayed-Draw Deadline, thereafter and through January 31, 2028 (the “FILO Draw Period Termination Date”), the Company will be permitted to make additional draws of the FILO Loan of up to $7 million, in increments of $1 million (the “Tranche B Loan”). The FILO Loan will mature on March 31, 2028, coterminous with the Company’s Existing Credit Facility. A

01 Financial Statements and Exhibits

Item 9.01 Financial Statements and Exhibits. (d) Exhibits Exhibit Number Description 10.1 Term Loan Credit Agreement dated as of January 25, 2024, by and among Kirkland’s, Inc., the borrowers and guarantors named therein, 1903P Loan Agent, LLC, as administrative agent, and the lenders named therein. 10.2 First Amendment to Third Amended and Restated Credit Agreement dated as of January 25, 2024, by and among Kirkland’s, Inc., the borrowers and guarantors named therein, Bank of America, N.A., as administrative agent, and the lenders named therein. 99.1 Press Release dated January 26, 2024 announcing the Company's FILO Credit Agreement. 104 Cover Page Interactive Data File (embedded within the Inline XBRL document) Top of Form

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. Kirkland's, Inc. January 26, 2024 By: /s/ Carter R. Todd Name: Carter R. Todd Title: Vice President and General Counsel

View Full Filing

View this 8-K filing on SEC EDGAR