Unassociated Document
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): March 23,
2010
TECHTEAM
GLOBAL, INC.
(Exact
name of registrant as specified in its charter)
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Delaware
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0-16284
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38-2774613
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(State
or other jurisdiction of
incorporation)
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(Commission
File
No.)
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(IRS
Employer Identification
No.)
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27335
West 11 Mile Road
Southfield,
Michigan
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48033
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(Address
of principal executive offices)
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Registrant's
telephone number including area code: (248) 357-2866
(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))
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Item
1.01
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Entry into a Material
Definitive Agreement
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On March
26, 2010, the Third Amendment (“Amendment”) to the Credit Agreement, dated June
1, 2007 (“Credit Agreement”), between the TechTeam Global, Inc. (“TechTeam” or
the “Company”) and the lenders thereunder, JPMorgan Chase Bank, N.A. and Bank of
America, N.A. (the “Lenders”), became effective. A copy of the
Amendment is attached as Exhibit 10.1 to this Current Report on Form 8-K and is
incorporated herein by reference.
The
Amendment decreased the Lenders’ commitment under the Credit Agreement by
$27,000,000 to total available credit of $28,000,000. Bank of
America, N.A. has been paid in full and is no longer a facility
lender.
The
Amendment also increased the interest rate applicable to borrowings under the
Credit Agreement (“Applicable Rate”) by modifying an element in the formula used
to determine the Applicable Rate. The Applicable Rate is equal to the
Eurocurrency rate for U.S. dollars plus a factor determined with reference to
the Company’s Leverage Ratio. The Amendment increased the range for
this factor from 0.95% - 1.45% to 1.50% - 2.00%. The unused
commitment fee was also increased from a range of 0.15% - 0.25% to a range of
0.25% - 0.35%. This fee is also determined with reference to the
Company’s Leverage Ratio.
The
Amendment permits the Company to maintain (a) a rolling four-quarter Leverage
Ratio as of the fiscal quarters ending of March 31, 2010 and June 30, 2010 of
3.25 to 1 (up from 3.0 to 1), and 3.0 to 1 for any fiscal quarter thereafter;
and (b) a rolling four-quarter Fixed Charge Coverage Ratio as of fiscal quarters
ending of March 31, 2010 and June 30, 2010 of 1.0 to 1.0 (down from 1.25 to 1.0)
and 1.25 to 1.0 for any fiscal quarter thereafter.
The
Company’s Leverage Ratio is equal to the ratio of (a) the Company’s consolidated
indebtedness less cash and cash equivalents held by the Company’s U.S.-based
entities in excess of $5 million to (b) the Company’s consolidated trailing
12-month EBITDA (earnings before interest, taxes, depreciation and
amortization).
Finally,
the Amendment also modified the definition of “Consolidated Adjusted EBITDA” to
allow the Company to add to Consolidated Adjusted EBITDA as previously defined
(a) the amount of the non-cash goodwill and intangible asset impairment charges
taken by the Company in the fiscal quarters ending December 31, 2009, March 31,
2010 and/or June 30, 2010, and (b) an amount related to cash restructuring
charges taken by the Company for fiscal quarters ending March 31, 2010 and/or
June 30, 2010.
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Item
2.02
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Results of Operations
and Financial Condition
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On March
29, 2010, TechTeam Global, Inc. issued a press release announcing its earnings
for the Fourth Quarter and Year End of 2009.
A copy of
this press release is attached as Exhibit 99.1 to this Current Report on Form
8-K and is incorporated herein by reference.
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Item
2.05
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Cost Associated with
Exit or Disposal Activities
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On March
23, 2010, the Board of Directors of TechTeam Global, Inc. (“TechTeam” or the
“Company”) approved a restructuring plan required to reduce costs, to eliminate
excess capacity and streamline the Company’s management. The restructuring is
necessitated largely by the previously announced wind-down of certain customer
contracts and the reduction in revenue as a result of the recent global economic
downturn. The Company anticipates that the restructuring plan will be
substantially complete by the end of the First Quarter 2010. The restructuring
charge includes the vacating of the Company’s leased facilities in Dresden,
Germany and Gothenburg, Sweden. As a result of these actions, the Company
expects to incur a $2.7 million to $3.4 million restructuring charge in the
First Quarter of 2010 primarily covering the cost of separating employees
and vacating these facilities.
The
statements contained in this Current Report on Form 8-K that are not purely
historical, including statements regarding the company’s expectations, hopes,
beliefs, intentions, or strategies regarding the future, are forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as amended.
Forward-looking statements include statements regarding, among other things, the
potential impact of this contract on the Company’s revenue and earnings
performance going forward. Forward-looking statements may be identified by words
including, but not limited to, “anticipates,” “believes,” “intends,”
“estimates,” “promises,” “expects,” “should,” “conditioned upon,” and similar
expressions. Prospective investors are cautioned that any such forward-looking
statements are not guarantees of future performance and involve risks and
uncertainties, and that actual results may differ materially from those
projected in the forward-looking statements as a result of various factors. Such
factors include, but are not limited to delays in the implementation of the
service model developed for the renewal contract business, the inability of
TechTeam to staff the project with sufficient qualified resources, changes in
the customer’s business or the requirements thereof, unanticipated problems that
arise from the transition from the customer’s former service model, difficulties
in providing the service solutions for the customer which includes products or
services delivered by the customer, the Company or the customer ’s
subcontractors or technology vendors. The forward-looking statements
included in this press release are based on information available to the company
on the date hereof, and the company assumes no obligation to update any such
forward-looking statement. Prospective investors should also consult the risks
described from time to time in the company’s Reports on Forms 8-K, 10-Q, and
10-K filed with the United States Securities and Exchange
Commission.
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Item
9.01
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Financial Statements
and Exhibits
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(D) The
following exhibits are included with this report:
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Exhibit
10.1
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Third Amendment (“Amendment”) to
the Credit Agreement, dated June 1, 2007.
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Exhibit
99.1
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March 29, 2010 Press Release - TechTeam Global Reports
Fourth Quarter and Year End 2009 Financial
Results. |
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.
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TECHTEAM
GLOBAL, INC. |
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By:
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/s/ Michael
A. Sosin |
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Michael
A. Sosin |
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Vice
President, General Counsel and Secretary |
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Date: March
29, 2010
EXHIBIT
INDEX
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Description |
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10.1
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Third
Amendment (“Amendment”) to the Credit Agreement, dated June 1,
2007.
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99.1
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March
29, 2010 Press Release - TechTeam Global Reports Fourth Quarter and Year
End 2009 Financial Results.
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