UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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) OCTOBER 5, 2005
CRAWFORD & COMPANY
(Exact Name of Registrant as Specified in Its Charter)
GEORGIA
(State or Other Jurisdiction of Incorporation)
1-10356 58-0506554
(Commission File Number) (IRS Employer Identification No.)
5620 GLENRIDGE DRIVE, N.E., ATLANTA, GEORGIA 30342
(Address of Principal Executive Offices) (Zip Code)
(404) 256-0830
(Registrant's Telephone Number, Including Area Code)
N/A
(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 Definitive Agreement
On September 30, 2005 the Company executed a First Amended and Restated Credit
Agreement ("Amended Revolving Credit Agreement") to its existing $70.0 million
Revolving Credit Agreement ("Revolving Credit Agreement") dated October, 2003.
The Company executed the Amended Revolving Credit Agreement with the same
lenders as the original Revolving Credit Agreement. The Amended Revolving Credit
Agreement does not change the dollar amount of the credit line or interest rate
terms. The expiration date is extended to September 29, 2010. This Amended
Revolving Credit Agreement is included herein as an Exhibit to this Form 8-K.
On September 30, 2005, the Company executed a Waiver and Amendment (the "Amended
Note Purchase Agreement") to its original Note Purchase Agreement of October,
2003 ("Note Purchase Agreement') involving its $50.0 million 6.08% senior notes
payable. The Company executed the Amended Note Purchase Agreement with the same
lenders as the original Note Purchase Agreement. The Amended Note Purchase
Agreement does not change the interest rate, payment schedule, or maturity date
of the 6.08% senior notes. This amended Note Purchase Agreement is included
herein as an Exhibit to this Form 8-K.
The stock of Crawford & Company International, Inc., a wholly-owned subsidiary
of the Company, continues to be pledged as security under these agreements and
the Company's U.S. subsidiaries remain guarantors for the Company's obligations
under these agreements.
Both the original Revolving Credit Agreement and the original Note Purchase
Agreement contained various provisions which required the Company to maintain
defined leverage ratios, fixed charge coverage ratios, and minimum net worth
thresholds. These original provisions were disclosed in the Company's Annual
Report on Form 10-K for the year ended December 31, 2004, and the original
agreement documents for both were incorporated by reference in the
aforementioned Form 10-K.
As a result of the amended agreements, the original provisions of these
agreements have been modified at September 30, 2005 as follows:
1. The Company must maintain, on a rolling four quarter basis, a leverage
ratio of consolidated debt to earnings before interest expense, income
taxes, depreciation, amortization, certain non-recurring charges, and
capitalization of internally developed software costs ("EBITDA") of no
more than 2.75 times EBITDA. This ratio is reduced to 2.50 times
EBITDA effective for the quarter ended September 30, 2006, and to 2.25
times EDITDA effective for the quarter ended September 30, 2007.
2. The Company must also maintain, on a rolling four quarter basis, a
fixed charge coverage ratio of EBITDA plus lease expenses ("EBITDAR")
to total fixed charges, consisting of interest expense and lease
expense, of no less than 1.5 times fixed charges through the quarter
ended September 30, 2007. Effective the quarter ended December 31,
2007, this ratio changes to no less than 1.75 times fixed charges.
3. The Company is also required to maintain a minimum net worth equal to
$167,200,000 plus 50% of its cumulative positive consolidated net
income earned after June 30, 2005, plus 100% of the net proceeds from
any equity offering, subject to terms and conditions. For purposes of
determining minimum net worth, any non-cash adjustments after June 30,
2005 related to the Company's pension liabilities, goodwill, or
foreign currency translation are excluded.
4. The Company may sell its home office facilities in Atlanta, Georgia,
subject to certain conditions, and consolidate its Atlanta operations
in a single leased facility.
5. During 2006, the Company may pay dividends to holders of its common
stock up to an amount not to exceed the sum of 2005 consolidated net
income plus $4,000,000. All other original provisions regarding the
payments of dividends during the terms of these original and amended
agreements remain unchanged.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
The following exhibit is filed herewith:
Exhibit Number Descriptions
-------------- ------------
10.1 First Amended and Restated Credit Agreement
10.2 Waiver and Amendment to Note Purchase Agreement dated as of
September 30, 2003
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.
CRAWFORD & COMPANY
By: /s/ John F. Giblin
------------------------------------
John F. Giblin
Executive Vice President-Finance
Dated: October 5, 2005