Attached files
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EX-99.1 - EX-99.1 - AHERN RENTALS INC | a10-1559_1ex99d1.htm |
EX-4.1 - EX-4.1 - AHERN RENTALS INC | a10-1559_1ex4d1.htm |
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): January 8, 2010
Ahern Rentals, Inc.
(Exact name of registrant as specified in its charter)
Nevada |
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333-128688 |
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88-0381960 |
(State or other
jurisdiction of |
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(Commission File Number) |
|
(I.R.S. Employer Identification No.) |
4241 South Arville Street
Las Vegas, Nevada 89103
(Address of principal executive offices)
(702) 362-0623
(Registrants telephone number, including area code)
(Former name or former address, if changed since last report)
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:
¨ 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 DEFINATIVE AGREEMENT.
Amendment to Amended and Restated Loan and Security Agreement
On January 8, 2010, Ahern Rentals, Inc. (the Company) effected an amendment and restatement of its Amended and Restated Loan and Security Agreement dated as of August 18, 2005, among the Company, the Lenders named therein, Bank of America, N.A., as administrative agent for the Lenders and Wachovia Bank, National Association, as collateral agent for the Lenders, (such agreement, as amended and restated on January 8, 2010, the Credit Facility). The Credit Facility adds a $95 million term loan facility to the existing revolving facility, among other things.
The revolving line of credit under the Credit Facility matures on August 21, 2011 and provides for up to $350 million in revolving loans. Taking into account a $40 million availability block, the Company can borrow up to an aggregate of $310 million. Advances under the revolver are limited based on reserves required by the revolving lenders and a percentage of qualified collateral. As of January 8, 2010, the Companys borrowing base under the Credit Facility was $310 million; under the Indenture, dated as of August 18, 2005, between the Company, as Issuer, and Wells Fargo, N.A., as Trustee, as amended (the Indenture), the Company was limited to borrowings under the Credit Facility of no more than $396 million.
Borrowings under the amended revolving line of credit bear interest at variable rates based on LIBOR or a base rate, selected by the Company, plus margin. The margin varies from 350 to 400 basis points for LIBOR-based loans and from 250 to 300 basis points for base rate loans, depending upon the Companys fixed charge coverage ratio for the most recently ended four fiscal quarters.
The Credit Facility, including amounts outstanding under the revolver and the Term Loan Notes (defined below), represents senior secured obligations of the Company and is secured by first priority liens upon substantially all of the Companys existing and future acquired assets. The Credit Facility contains covenants that limit the Companys ability to, among other things, incur additional indebtedness; pay dividends or make other specified payments, investments, loans and guarantees; incur liens; prepay debt; enter into transactions with affiliates; sell all or substantially all of its assets or merge with or into other companies; and enter into sale and leaseback transactions. The Credit Facility also imposes financial tests relating to the Companys capital expenditures and equipment utilization.
This description of the Credit Facility is not complete and is qualified by reference to the Second Amended and Restated Loan and Security Agreement, filed as Exhibit 4.1 hereto and incorporated into this report by reference.
New Term Loan Notes
New term loan notes in the aggregate principal amount of $95 million (the Term Loan Notes) have been issued to Liberty Harbor Master Fund I, L.P. and certain of its affiliates under the Credit Facility (the Liberty Harbor Transaction). Of the $95 million aggregate principal amount of Term Loan Notes, $55 million was issued for $55 million of cash and $40 million was issued in exchange for $53.3 million aggregate principal amount of the Companys 9 1/4% Second Priority Senior Secured Notes due 2013.
The Term Loan Notes bear interest at a rate of 16% per annum, payable in cash on the 15th of each month, and have a final maturity of December 15, 2012.
The net proceeds of approximately $47 million of the Term Loan Notes were used to repay outstanding loans under the revolving line of credit under the Credit Facility. After giving effect to the Liberty Harbor Transaction and taking into account the amendments to the revolving credit facility, the Company had approximately $41 million in borrowing availability, and an additional $27 million in suppressed availability.
ITEM 2.03 CREATION OF A DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION UNDER AN OFF-BALANCE SHEET ARRANGEMENT OF A REGISTRANT.
The information set forth in Item 1.01 of this Current Report on Form 8-K is incorporated into this Item 2.03 by reference.
ITEM 3.03 MATERIAL MODIFICATION TO RIGHTS OF SECURITY HOLDERS.
The information set forth in Item 1.01 of this Current Report on Form 8-K is incorporated into this Item 3.03 by reference.
ITEM 8.01 OTHER EVENTS.
Press Release
On January 11, 2010 the Company issued a press release to announce the amendment and restatement of the Credit Facility and the issuance of the Term Loan Notes. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated by reference herein.
Information Disclosed to Liberty Harbor
In connection with the Liberty Harbor Transaction, the Company disclosed to Liberty Harbor a summary of the Companys full year 2008, projected fourth quarter 2009, and projected full year 2009 and 2010 revenue, EBITDA, capital expenditures, time utilization and branch openings, each as prepared by the Company in the second quarter of 2009 (collectively, as provided to Liberty Harbor on August 7, 2009, the Projections). Additionally, in December 2009, the Company provided Liberty Harbor with its pro forma balance sheet and sources and uses, both showing the effect of the Liberty Harbor Transaction as of November 30, 2009 (collectively, the November Financial Information). The Company also disclosed to Liberty Harbor that it had approximately $50 million in accounts receivable as of December 30, 2009. At Liberty Harbors request, the Company is disclosing the foregoing information.
Information below. The Companys actual results for the third quarter of 2009 are set forth in its Quarterly Report on Form 10-Q for the three months ended September 30, 2009 filed with the Securities and Exchange Commission.
Summary Projections
($ in thousands) |
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2008 |
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Q4 2009 |
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2009 |
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2010 |
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Rental and Related Revenue |
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$ |
329,460.9 |
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$ |
65,065.9 |
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$ |
254,085.8 |
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$ |
295,149.2 |
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Sales of Used Equipment |
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19,663.9 |
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2,182.6 |
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9,637.2 |
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8,830.8 |
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Other |
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32,462.4 |
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5,090.6 |
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20,590.9 |
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23,827.5 |
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Total Revenue |
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$ |
381,587.2 |
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$ |
72,339.1 |
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$ |
284,313.9 |
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$ |
327,807.5 |
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EBITDA |
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$ |
150,095.1 |
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$ |
17,043.0 |
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$ |
71,955.2 |
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$ |
96,055.5 |
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% of Revenue |
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39.3 |
% |
23.6 |
% |
25.3 |
% |
29.3 |
% |
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Capital Expenditure |
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$ |
150,921.0 |
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$ |
7,881.0 |
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$ |
38.332.6 |
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$ |
45,000.0 |
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% of Revenue |
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39.6 |
% |
10.9 |
% |
13.5 |
% |
13.7 |
% |
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High Reach Time Utilization |
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67.0 |
% |
57.7 |
% |
56.9 |
% |
63.2 |
% |
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Number of Branches |
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53 |
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62 |
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62 |
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71 |
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Pro Forma Balance Sheet as of November 30, 2009
AHERN RENTALS, INC.
PRO FORMA BALANCE SHEET
NOVEMBER 30, 2009
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Pro |
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Pro |
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ACTUAL |
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Forma |
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Forma |
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11/30/2009 |
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Adjustments |
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11/30/2009 |
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ASSETS |
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Cash |
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$ |
1,551,269 |
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$ |
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$ |
1,551,269 |
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Accounts receivable, net |
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50,449,518 |
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50,449,518 |
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Inventories |
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30,159,086 |
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30,159,086 |
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Rental equipment, net |
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480,837,020 |
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480,837,020 |
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Property and other equipment, net |
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63,159,837 |
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63,159,837 |
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Debt issuance costs |
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5,973,546 |
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7,112,113 |
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13,085,659 |
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Other |
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6,641,451 |
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6,641,451 |
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TOTAL ASSETS |
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$ |
638,771,727 |
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$ |
7,112,113 |
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$ |
645,883,840 |
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LIABILITIES AND STOCKHOLDERS EQUITY |
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Line of credit payable |
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$ |
315,648,665 |
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$ |
(47,887,887 |
) |
$ |
267,760,778 |
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Accounts payable, other |
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17,143,606 |
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17,143,606 |
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Accrued expenses |
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20,649,731 |
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20,649,731 |
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Notes payable and capital lease obligations |
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1,700,210 |
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1,700,210 |
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Term loan payable |
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95,000,000 |
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95,000,000 |
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Bonds payable |
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290,000,000 |
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(53,333,333 |
) |
236,666,667 |
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Premium on bonds payable |
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1,901,091 |
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1,901,091 |
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TOTAL LIABILITIES |
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647,043,303 |
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(6,221,220 |
) |
640,822,083 |
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Common stock |
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5,915,214 |
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5,915,214 |
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Retained earnings (Accumulated deficit) |
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(14,186,790 |
) |
13,333,333 |
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(853,457 |
) |
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TOTAL STOCKHOLDERS EQUITY |
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(8,271,576 |
) |
13,333,333 |
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5,061,757 |
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TOTAL LIABILITIES AND STOCKHOLDERS EQUITY |
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$ |
638,771,727 |
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$ |
7,112,113 |
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$ |
645,883,840 |
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Sources and Uses as of November 30, 2009
Ahern Rentals, Inc.
Sources of Funds |
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New FLLO Term Loan New $ |
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$ |
55,000,000.0 |
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New FLLO Term Loan Bond Exchange |
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40,000,000.0 |
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2nd Lien Principal Reduction |
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13,333,333.3 |
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Total Sources of Funds |
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$ |
108,333,333.3 |
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Uses of Funds |
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Repay Existing Bank Debt |
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$ |
47,887,886.7 |
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Exchange of 2nd Lien Notes (1) |
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53,333,333.3 |
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Estimated Fees & Expenses |
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7,112,113.3 |
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Total Uses of Funds |
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$ |
108,333,333.3 |
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(1) Assumes an exchange at 75.0%.
Pro Forma Capitalization
As of November 30, 2009 |
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Actual |
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Pro Forma |
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Cash |
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$ |
1,551,269.0 |
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$ |
1,551,269.0 |
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Revolving Credit Facility |
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$ |
315,648,665.0 |
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$ |
267,760,778.3 |
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New FLLO Term Loan (1) |
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0.0 |
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95,000,000.0 |
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Notes payable and capital lease obligations |
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1,700,210.0 |
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1,700,210.0 |
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9.25% 2nd Lien Notes |
|
290,000,000.0 |
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236,666,666.7 |
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Total Debt |
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$ |
607,348,875.0 |
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$ |
601,127,655.0 |
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(1) For $55.0 million of New Money and $40.0 million Term Loan issued in exchange of the notes.
The Projections and certain other statements in this report constitute forward-looking statements which involve risks and uncertainties that could cause actual results to differ materially. You should carefully review the risks described in the documents the Company files from time to time with the Securities and Exchange Commission. When used in this report, the words expects, could, would, may, anticipates, intends, plans, believes, seeks, targets, estimates, looks for, looks to, and similar expressions are generally intended to identify forward-looking statements. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this report and, with respect to the Projections, speak only as of the date on which they were provided to Liberty Harbor. The Company has not updated the Projections and you should not rely on them in deciding whether or not to invest in any securities of the Company. The Company undertakes no obligation to publicly release any revisions to the forward-looking statements or reflect events or circumstances after the date of this report.
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.
(d) Exhibits.
Exhibit No. |
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Description |
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4.1 |
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The Second Amended and Restated Loan and Security Agreement dated January 8, 2010 among the Ahern Rentals, Inc. and its future subsidiaries, the financial institutions named therein, Bank of America, N.A., as administrative agent, Wachovia Bank, National Association, as collateral agent and syndication agent and Banc of America Securities LLC and Wachovia Capital Markets, LLC, as co-lead arrangers. |
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99.1 |
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Press Release dated January 11, 2010 of Ahern Rentals, Inc. |
SIGNATURE
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.
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AHERN RENTALS, INC. |
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Date: January 11, 2010 |
By: |
/s/ Howard L. Brown |
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Name: |
Howard L. Brown |
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Title: |
Chief Financial Officer |