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): June 3, 2005
APPLIED INDUSTRIAL TECHNOLOGIES, INC.
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(Exact name of registrant as specified in its charter)
OHIO 1-2299 34-0117420
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(State or Other Jurisdiction of (Commission File (I.R.S. Employer
Incorporation or Organization) Number) Identification No.)
One Applied Plaza, Cleveland, Ohio 44115
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(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code: (216) 426-4000.
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 (see General Instruction A.2. below):
[ ] 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 June 3, 2005, Applied Industrial Technologies, Inc. (the
registrant) entered into a Credit Agreement (the "Credit Agreement") with
certain financial institutions party thereto and KeyBank National Association,
as Lead Arranger, Book Runner and Administrative Agent for itself and such other
financial institutions, providing for a five-year $100,000,000 unsecured
revolving credit facility. The Credit Agreement, which is scheduled to mature on
June 2, 2010, replaces the registrant's prior $100,000,000 credit facility with
KeyBank National Association and various financial institutions. The aggregate
maximum principal amount of commitments under the Credit Agreement may be
expanded upon the registrant's request, subject to certain conditions, to
$125,000,000. Currently, $25,000,000 of the commitments under the Credit
Agreement are reserved for direct borrowings by certain of the registrant's
Canadian subsidiaries that have been designated as borrowers under the Credit
Agreement. The Credit Agreement also contains sublimits for swingline loans and
letters of credit. All of the obligations under the Credit Agreement, including
the obligations of the Canadian borrowers, are guaranteed by certain of the
registrant's U.S. subsidiaries. Additionally, the registrant has agreed to
guarantee the obligations of the Canadian borrowers under the Credit Agreement.
The Canadian borrowers are not guarantors of the registrant's obligations under
the Credit Agreement. As of June 3, 2005, there were no outstanding borrowings
under the Credit Agreement or the previous credit facility.
The Credit Facility is available for working capital needs and
general corporate purposes of the registrant including acquisitions.
The Credit Agreement contains customary covenants, including but not
limited to, limitations on the registrant's ability, and in certain instances,
the registrant's subsidiaries' ability to incur liens, make acquisitions and
investments, or sell or transfer assets and stock. Additionally, the registrant
may not permit its leverage ratio to exceed 3.0 to 1.0 or its interest coverage
ratio to exceed 3.0 to 1.0.
Loans under the Credit Agreement will bear interest as follows: (a)
loans to the registrant will bear interest, at the registrant's election, at one
of the following rates: (1) the base rate, which is the greater of (a) the
effective prime rate announced by KeyBank National Association from time to
time, or (b) a rate per annum that is 0.5% in excess of the effective federal
funds rate; (2) the Eurodollar rate plus a margin of 0.30% to 0.55% per annum
(based on the registrant's leverage ratio); or (3) with respect to swingline
loans, the Administrative Agent's cost of funds plus a margin of 0.30% to 0.55%
per annum (based on the registrant's leverage ratio); and (B) loans to the
Canadian borrowers will bear interest, at the registrant's election, at either
(1) the effective prime rate announced by the Toronto branch of JPMorgan Chase
Bank, N.A. from time to time, or (2) the average of certain quoted Canadian
interbank bid rates for Canadian dollar bankers' acceptances plus a margin of
0.30% to 0.55% per annum (based on the registrant's leverage ratio). The Credit
Agreement also provides for facility fees of 0.10% to 0.20% per annum (based on
the registrant's leverage ratio).
Upon the occurrence of certain events of default, the registrant's
obligations under the Credit Agreement may be accelerated. Such events of
default include payment defaults to lenders under the Credit Agreement, covenant
defaults, certain ERISA defaults, change of control and other customary
defaults.
The lenders under the Credit Agreement and their affiliates have
engaged and may engage in commercial and investment banking transactions with
the registrant in the ordinary course of business, and also provide or have
provided advisory and financial services to the registrant. The Credit Agreement
is attached as Exhibit 4 to this Form.
ITEM 1.02 TERMINATION OF A MATERIAL DEFINITIVE AGREEMENT
The new credit facility replaces a $100,000,000 Credit Agreement
dated as of October 31, 2003, among the registrant, KeyBank National Association
as Agent, and various financial institutions, which agreement was filed as
Exhibit 4(e) to the registrant's Form 10-Q for the quarter ended December 31,
2003, SEC File No. 1-2299.
ITEM 2.03 CREATION OF A DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION UNDER AN
OFF-BALANCE SHEET ARRANGEMENT
On June 3, 2005, the registrant entered into a $100,000,000 Credit
Agreement with KeyBank National Association as Agent, and various financial
institutions. The new agreement is attached as Exhibit 4 to this Form.
The new credit facility replaces a $100,000,000 Credit Agreement
dated as of October 31, 2003, among the registrant, KeyBank National Association
as Agent, and various financial institutions, which agreement was filed as
Exhibit 4(e) to the registrant's Form 10-Q for the quarter ended December 31,
2003, SEC File No. 1-2299.
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibit 4. $100,000,000 Credit Agreement dated as of June 3, 2005,
among Applied Industrial Technologies, Inc., KeyBank
National Association as Agent, and various financial
institutions.
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, thereunto duly authorized.
APPLIED INDUSTRIAL TECHNOLOGIES, INC.
(Registrant)
By: /s/ Fred D. Bauer
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Fred D. Bauer
Vice President-General Counsel
& Secretary
Date: June 9, 2005
EXHIBIT INDEX
Exhibit No. Description
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4 $100,000,000 Credit Agreement dated as of June 3, 2005, among
Applied Industrial Technologies, Inc., KeyBank National
Association as Agent, and various financial institutions.