GRAND RAPIDS, Minn.--(BUSINESS WIRE)--ASV Holdings, Inc. (NASDAQ: ASV), a leading provider of rubber-tracked compact track loaders and wheeled skid steer loaders in the compact construction equipment market, today announced that on December 27, 2017, it replaced its former credit agreement with a new $50 million, five-year credit facility with PNC Bank as the lead lender. The new agreement consists of a $35 million revolving credit facility and a $15 million term loan, and provides for a significant reduction in annual interest costs and generally more favorable credit terms for ASV. The full details of this agreement can be found in the Current Report on Form 8-K filed by ASV on December 28 with the SEC, accessible both at www.sec.gov and at www.asvi.com in the investor relations section.
Missi How, CFO of ASV commented, “Reducing our interest expense through the negotiation of lower rates with our banks marks another key milestone for our team here at ASV. Our financial performance and execution of our plan throughout 2017 enabled us to reduce our cost of capital and has put us in position to continue to prudently grow the enterprise. This new agreement lowers the weighted effective interest rate on our debt by approximately 3 percentage points to approximately 5.1%. We expect that the new lower rate will result in an annual savings of nearly $800,000 in interest, with a corresponding amount reflected in our net income, on an annual basis, for 2018.”
The company expects to incur a charge in the fourth quarter of about $900,000 which reflects the remaining unamortized balance of costs associated with the previous credit facility, and a prepayment penalty at closing against the old credit facility. Principal payments of $500,000 against the Term Loan portion of the facility will be due each quarter.
This press release contains forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” “intends” or “continue,” and other similar expressions that are predictions of or indicate future events and future trends. Any forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially, including the risks detailed under “Risk Factors” in the Registration Statement on Form S-1 (SEC File No. 333-222142) and in other filings we make from time to time with the Securities and Exchange Commission, and represent our views only as of the date they are made and should not be relied upon as representing our views as of any subsequent date. We do not assume any obligation to update any forward-looking statements.
About ASV Holdings, Inc.
ASV Holdings, Inc. is a designer and manufacturer of compact construction equipment. Its patented Posi-Track rubber tracked, multi-level suspension undercarriage system provides a competitive market differentiator for its Compact Track Loader (CTL) product line with brand attributes of power, performance and serviceability. It’s wheeled Skid Steer Loaders (SSLs) also share the common brand attributes. Equipment is sold through an independent dealer network throughout North America, Australia, and New Zealand. The company also sells OEM equipment and aftermarket parts. ASV owns and operates a 238,000 square-foot production facility in Grand Rapids, MN.