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): March 24, 2009
____________________
ICO,
INC.
(Exact
name of registrant as specified in its charter)
|
Texas
(State
or other jurisdiction
of
incorporation)
|
0-10068
(Commission
File
Number)
|
76-0566682
(I.R.S.
Employer
Identification
No.)
|
1811
Bering Drive, Suite 200
Houston,
Texas 77057
(Address
of principal executive offices and zip code)
(713)
351-4100
(Registrant’s
telephone number, including area code)
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
.
On March 24, 2009, ICO, Inc. (the
“Company”) entered into Amendment No. 5 to Credit Agreement (“Amendment No. 5”)
with KeyBank National Association and Wells Fargo Bank, National Association
(“Lenders”) amending our Credit Agreement with the Lenders dated as of October
27, 2006, as previously amended by Amendment No. 1 and Waiver to Credit
Agreement, dated April 25, 2007; Amendment No. 2 to Credit Agreement, dated June
25, 2007; Amendment No. 3 and Waiver to Credit Agreement, dated October 1, 2007;
and Amendment No. 4, dated May 2, 2008 (the “Credit Agreement”).
Prior to Amendment No. 5, the Credit
Agreement provided a $50,000,000 credit facility (“Credit Facility”), consisting
of a $30,000,000 revolving credit facility (“Revolver A”), a $15,000,000 term
loan (of which approximately $9,167,000 is currently outstanding) and an
additional $5,000,000 term loan (of which approximately $4,167,000 is currently
outstanding). The amount of funds available under Revolver A was
based on an “asset coverage ratio,” which consisted of domestic cash, accounts
receivable and inventory. As a result of Amendment No. 5, the amount
of funds available to draw under Revolver A is now based on a “borrowing base,”
which is equal to the sum of 80% of certain domestic “eligible accounts”
(accounts receivable) and 50% of certain domestic “eligible inventory” minus any
“reserve amount” in effect. In light of Amendment No. 5 and the
computation of the funds available under Revolver A, the Company elected to
reduce Revolver A of the Credit Facility by $10,000,000 to
$20,000,000. The Company does not have any current outstanding
borrowings drawn under Revolver A, but does have approximately $1,759,000 in
letters of credit currently issued thereunder.
Amendment
No. 5 also amends the Credit Agreement by, among other things, (i) modifying the
definition and calculation of “consolidated fixed charges” by replacing
“consolidated income tax expense paid” with a “consolidated income tax expense”
formula and excluding capital distributions made by the Company from the
computation through December 31, 2009; (ii) reducing the “fixed
charge coverage ratio” covenant requirement from a ratio of 1.10 to 1.00 to a
ratio of 1.00 to 1.00 through September 30, 2010, increasing thereafter to a
ratio of 1.10 to 1.00; (iii) requiring that the Company maintain a fixed
coverage ratio of at least 1.10 to 1.00 during the three consecutive fiscal
quarters ending immediately prior to a “restricted payment,” which includes the
payment of dividends by the Company and the repurchase by the Company of its
shares; and (iv) increasing the margin over the applicable base rate on the
Company’s borrowings under the Credit Facility. Based on the
Company’s current leverage ratio, the margin over the applicable base rate
increases from 150 basis points to 375 basis points on the Company’s outstanding
$9,167,000 term loan and from 200 basis points to 425 points on the Company’s
outstanding $4,167,000 term loan. The increased margins over the base
rates are expected to increase the Company’s annual interest expense on its
current level of borrowings under the Credit Agreement in the next twelve month
period by approximately $250,000.
The foregoing description of Amendment
No. 5 is qualified entirely by reference to the full text of Amendment No. 5, a
copy of which is filed as Exhibit 10.1 to this Current Report on Form 8-K and
incorporated by reference herein.
ITEM 2.03 Creation
of a Direct Financial Obligation or an Obligation under an Off-Balance
Sheet
Arrangement
of a Registrant.
Reference
is made to the disclosure set forth under Item 1.01 of this report, which
disclosure is incorporated into this Item 2.03 by reference.
ITEM 9.01
Financial Statements and
Exhibits
.
(d) Exhibits
10.1 Amendment
No. 5 to Credit Agreement, dated March 24, 2009, by and among ICO, Inc.,
Bayshore Industrial L.P. and ICO Polymers North America, Inc. (as
“Borrowers”); KeyBank National Association, Wells Fargo Bank, National
Association and the Other Lending Institutions Named Herein (as “Lenders”); and
KeyBank National Association (as “an LC Issuer, Lead Arranger, Bookrunner and
Administrative Agent”); and Wells Fargo Bank, National Association (as “Swing
Line Lender”).
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.
|
|
ICO,
INC.
|
|
|
|
|
|
Date: March
25, 2009
|
By:
|
/s/
Bradley T. Leuschner
|
|
|
Name:
|
Bradley
T. Leuschner
|
|
|
Title:
|
Chief
Financial Officer and
Treasurer
|
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