Key Tronic Corporation Closes on New Credit Facility to Aid With Expected Growth

SPOKANE VALLEY, Wash., Aug. 17, 2020 (GLOBE NEWSWIRE) -- Key Tronic Corporation (Nasdaq: KTCC), a provider of electronic manufacturing services (EMS), today announced the closing of a new credit facility to aid with expected growth.

On August 14, 2020, Key Tronic Corporation (the “Company”) and certain of its domestic subsidiaries entered into a loan and security agreement (the “Loan Agreement”) among the Company, certain domestic subsidiaries (as co-borrowers or guarantors), and Bank of America, N.A., as agent, sole lead arranger, sole bookrunner, and a lender (the “Bank”).  The Loan Agreement replaces the Company’s prior amended and restated credit agreement, as amended, with Wells Fargo Bank, N.A and certain other parties (with the related credit facility, the “Prior Credit Facility”).  The Loan Agreement provides for a five-year asset-based senior secured revolving credit facility (the “Credit Facility”) of up to $93 million, maturing on August 14, 2025.  In addition, during the term of the Loan Agreement, the Company may increase the aggregate amount of the Credit Facility by up to an additional $25 million, subject to customary conditions, including obtaining a commitment from the Bank (or another lender, if applicable) to such increase.

Loans and letters of credit under the Loan Agreement are not permitted to exceed the lesser of (i) the aggregate commitment under the Credit Facility and (ii) a 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 Loan Agreement.  The Credit Facility has been used to pay-off the Prior Credit Facility and costs related to the Loan Agreement, and may be used to pay-off certain other existing debt, to issue letters of credit, and for other business purposes, including working capital needs.  Based on the Company’s borrowing base and reserve requirements and after paying off the Prior Credit Facility and related fees and expenses relating to the Credit Facility, immediately following the closing of the Loan Agreement, there was approximately $16 million available under the Credit Facility.