8-K: Current report filing
Published on October 6, 2020
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
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Item 8.01. Other Events.
Barrett Business Services, Inc. (the "Company"), reported on October 6, 2020, that it had given notice to its principal bank, Wells Fargo Bank, National Association (the "Bank"), requesting that the maximum principal amount of the revolving line of credit provided by the Second Amended and Restated Credit Agreement dated August 6, 2019 (the “Credit Agreement”), between the Company and the Bank, be reduced from $50,000,000 to $33,000,000. The notice was given in accordance with Section 1.1(a) of the Credit Agreement as amended by the First Amendment to the Credit Agreement dated May 15, 2020 (the “First Amendment”).
On September 30, 2020, the Company and the Bank executed a Second Amendment to the Credit Agreement (the "Second Amendment") to clarify that specified provisions set forth in the First Amendment would revert to those in effect immediately prior to May 15, 2020. As a result, the rate of fee payable on the daily unused amount of the revolving line of credit has reverted automatically to 0.375% per year from 0.50% per year. Also, the financial covenant relating to total funded debt provided in the First Amendment has reverted to a requirement regarding minimum EBITDA and the coverage ratio relating to workers’ compensation liabilities is as follows, effective September 25, 2020:
| · | EBITDA [net income before taxes plus interest expense (net of capitalized interest expense), depreciation expense, and amortization expense] must be at least $30 million at the end of each fiscal quarter as determined on a rolling four-quarter basis; and |
| · | the ratio of restricted and unrestricted cash and investments to workers’ compensation and safety incentive liabilities must be at least 1.0:1.0, measured quarterly. |
Also under the Second Amendment, the covenant relating to payment
of dividends and limitations on repurchases of the Company’s stock provided in the First Amendment no longer applies. Rather,
if an event of default would occur under the Credit Agreement, including on a pro forma basis, no dividends or distributions would
be permitted to be paid and redemptions or repurchases of the Company’s stock would be permitted only up to a total of $15
million in any rolling 12-month period in the absence of the Bank’s prior written consent.
All other material terms and conditions of the Credit Agreement are unchanged from those described in Note 4 to the Company's unaudited interim condensed consolidated financial statements included in its Quarterly Report on Form 10-Q for the quarter ended June 30, 2020, filed by the Company with the Securities and Exchange Commission (the "SEC") on August 5, 2020.
A copy of the Second Amendment is filed as Exhibit 4.1 to this report and is incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
| (d) | Exhibits. |
| 4.1 | Second Amendment, dated as of September 25, 2020, to Second Amended and Restated Credit Agreement between the Registrant and Wells Fargo Bank, National Association. |
| 104.1 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
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 thereunto duly authorized.
| BARRETT BUSINESS SERVICES, INC. | |||
Dated: October 6, 2020 |
By: | /s/ Anthony J. Harris | |
| Anthony J. Harris Executive Vice President and Chief Financial Officer |
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