Business
Daktronics, Inc. Strengthens Financial Position by Securing $100 Million In Capital Commitments
Closes $75 Million Senior Secured Credit Facility with JPMorgan Chase and $25 Million Convertible Note Investment with Major Shareholder Alta Fox Capital
About this update from Daktronics, Inc.
[{"type":"text","content":"Closes $75 Million Senior Secured Credit Facility with JPMorgan Chase and $25 Million Convertible Note Investment with Major Shareholder Alta Fox Capital\nBROOKINGS, S.D., May 11, 2023 (GLOBE NEWSWIRE) -- Daktronics, Inc. (NASDAQ-DAKT) (the “Company” or “Daktronics”) today announced it has enhanced its financial position by closing on a new 3-year $75 million senior secured credit facility (the “New Senior Debt Facility”) with JPMorgan Chase (“JPMorgan Chase”) maturing on May 11, 2026. In addition, Daktronics announced it has closed a $25 million convertible debt financing agreement (the “Junior Capital Financing”) with major shareholder Alta Fox Capital Management, LLC (together with its affiliates, “Alta Fox”). Daktronics’ Board of Directors (the “Board”) believes the completion of these transactions provides the Company with the working capital and liquidity needed to continue executing its business plan and growth strategy. JPMorgan Chase’s $75 million New Senior Debt Facility has replaced the Company’s $35 million credit facility with U. S. Bank National Association (“U.S. Bank”). As a result, JPMorgan Chase is now the Company’s primary commercial bank. At close, all obligations to U.S. Bank under the previous credit arrangement were repaid; the Company did not need to borrow under the New Senior Debt Facility to fund the repayment. Howard I. Atkins, Chair of the Daktronics Board’s Strategy and Financing Review Committee (the “Committee”) said: “We are pleased to have delivered on our commitment to identify attractive financing for the Company, which was the result of a comprehensive process. The Committee is confident we and our advisors thoroughly explored all alternatives and obtained the best possible outcome in terms of flexibility and overall cost of capital. The New Senior Debt Facility and the Junior Capital Financing provide the Company the financial resources to serve our customers and build long-term value for our shareholders.” Reece Kurtenbach, Daktronics’ Chairman and CEO, added: “Daktronics continues to make positive progress on several fronts. In addition to the financial flexibility these new sources of capital provide, the management team continues to implement operational and productivity improvement initiatives intended to increase the Company’s profit margins and generate additional cash from operations...