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 27, 2005
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CSS Industries, Inc.
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(Exact name of registrant as specified in its charter)
Delaware 1-2661 13-920657
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(State or other jurisdiction (Commission (IRS Employee
of incorporation) File Number) Identification No.)
1845 Walnut Street, Philadelphia, PA 19103
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (215) 569-9900
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Not Applicable
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(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 January 27, 2005, the Amended and Restated Loan Agreement dated as of April
23, 2004 pertaining to the Company's $50,000,000 revolving credit facility
("Loan Agreement") was amended. The parties to the amendment are the Company and
certain of its affiliates, on the one hand, and PNC Bank, National Association,
Wachovia Bank, National Association, Fleet National Bank, Citizens Bank of
Pennsylvania and Union Planters Bank, on the other hand.
Prior to the amendment, any reduction in the Company's consolidated net worth
resulting from the purchase by the Company of shares of the Company's common
stock pursuant to any stock repurchase program of the Company was disregarded,
subject to a maximum disregarded amount of $25,000,000, in the calculation of
the Company's consolidated net worth for purposes of the financial covenant
pertaining to the minimum consolidated net worth required to be maintained by
the Company. The amendment made the minimum consolidated net worth covenant less
restrictive in that the maximum amount that may be so disregarded was increased
to $68,500,000 for all stock repurchases during the period commencing April 23,
2004 and ending January 26, 2006 (the "Initial Period"). If the actual amount of
stock repurchases during the Initial Period is equal to or less than
$25,000,000, then the maximum amount that may be disregarded in the calculation
of consolidated net worth reverts back to $25,000,000 for all stock repurchases
during the term of the Loan Agreement. If the actual amount of stock repurchases
during the Initial Period is greater than $25,000,000, then the maximum amount
that may be disregarded in the calculation of consolidated net worth is the
lesser of $68,500,000 or the actual amount of stock repurchases during the
Initial Period.
In addition, the amendment added a new financial covenant, the effect of which
is to require the Company to maintain a minimum consolidated net worth of not
less than $179,046,000 as of September 30, 2004. For each fiscal quarter
thereafter, this minimum consolidated net worth requirement increases by an
amount equal to fifty percent (50%) of the Company's aggregate positive
consolidated net income (on a year-to-date basis for each uncompleted fiscal
year and on a fiscal year basis for each completed fiscal year) for the period
beginning on October 1, 2004 and ending on the last day of the applicable
subsequent fiscal quarter. For purposes of this new consolidated net worth
covenant, there is no adjustment for purchases by the Company of shares of the
Company's common stock. The requirements of this new financial covenant are
identical to the requirements of the consolidated net worth covenant in the Note
Purchase Agreement pertaining to the Company's $50,000,000 of 4.48% Senior Notes
due December 13, 2009.
Finally, the amendment to the Loan Agreement makes the financial covenant
pertaining to the ratio of consolidated funded debt to consolidated
capitalization more restrictive. Prior to the amendment, any reduction in
consolidated net worth resulting from the purchase by the Company of shares of
the Company's common stock was disregarded for purposes of this covenant,
subject to a maximum disregarded amount of $25,000,000. As a result of the
amendment, reductions in consolidated net worth resulting from the Company's
repurchase of shares of the Company's common stock are no longer disregarded for
purposes of this financial covenant.
The Company paid an amendment fee of $25,000.00 in connection with the January
27, 2005 amendment to the Loan Agreement.
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SIGNATURES
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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.
CSS Industries, Inc.
(Registrant)
By:
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Clifford E. Pietrafitta
Vice President-Finance and
Chief Financial Officer
Date: February 2, 2005
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