TWIN DISC INC : Entry into a Material Definitive Agreement, Other Events, Financial Statements and Exhibits (form 8-K)

Published: 2021-10-05 16:08:12 ET TWIN

Item 1.01 Entry into a Material Definitive Agreement.

On September 30, 2021, Twin Disc, Incorporated (the "Company") entered into a First Amended and Restated Forbearance Agreement and Amendment No. 7 to Credit Agreement (the "Amended and Restated Forbearance Agreement") that amends the Credit Agreement dated as of June 29, 2018, as amended (the "Credit Agreement") between the Company and BMO Harris Bank, N.A. (the "Bank"). Capitalized terms in this Current Report that are not otherwise defined herein are defined in the Credit Agreement, as amended.

The Credit Agreement requires the Company to comply with certain minimum EBITDA covenants, including maintaining a minimum EBITDA of $2,500,000 for the three fiscal quarters ended as of December 25, 2020, $6,000,000 for the four fiscal quarters ended as of March 26, 2021, and $10,000,000 for the four fiscal quarters ended as of June 30, 2021. On January 27, 2021, the Company and the Bank had entered into a Forbearance Agreement and Amendment No. 6 to the Credit Agreement (the "Forbearance Agreement"), because the Company was not in compliance with its financial covenant to maintain a minimum EBITDA of $2,500,000 for the three fiscal quarters ended as of December 25, 2020. In the Forbearance Agreement, the Bank agreed to forbear from exercising its rights and remedies against the Company under the Credit Agreement with respect to the Company's noncompliance with its minimum EBITDA covenants during the period (the "Forbearance Period") commencing January 27, 2021 and ending on the earlier of (i) September 30, 2021, and (ii) the date on which a default under the Forbearance Agreement or Credit Agreement occurs.

The Amended and Restated Forbearance Agreement extends the Forbearance Period through February 28, 2022, or if earlier, through the date on which a default under the Amended and Restated Forbearance Agreement or Credit Agreement occurs. During the extended Forbearance Period, the Bank will continue to forbear from exercising its rights and remedies against the Company under the Credit Agreement with respect to the Company's noncompliance with its minimum EBITDA covenants. The Amended and Restated Forbearance Agreement also makes certain adjustments to the Credit Agreement, including:

The above description of the Amended and Restated Forbearance Agreement is qualified in its entirety by reference to the Amended and Restated Forbearance Agreement, a copy of which is filed as Exhibit 1.1 to this Current Report on Form 8-K and incorporated herein by reference.

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Item 8.01 Other Events

As permitted by the Amended and Restated Forbearance Agreement, the Company sold its manufacturing facility in Novazzano, Switzerland on September 1, 2021, to Impregil SA, a Swiss entity, for a purchase price CHF 9,000,000, which translated to approximately $9,800,000. The Company entered into a two-year lease agreement, with a two-year option to extend, for a portion of the manufacturing facility previously owned by the Company. Through the end of 2021, the lease will be for the entirety of the manufacturing facility, covering 3,075 square meters. Beginning in 2022, the area leased by the Company will be reduced to 1,756 square meters.

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Pursuant to the requirements of section 13 or 15(d) 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.

Date: October 5, 2021 Twin Disc, Incorporated