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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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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 31, 2008
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CIRCUIT CITY STORES, INC.
(Exact name of registrant as specified in its charter)
Virginia 1-5767 54-0493875
(State or other jurisdiction (Commission File Number) (I.R.S. Employer
of incorporation) Identification No.)
9950 Mayland Drive
Richmond, Virginia 23233
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (804) 486-4000
Not Applicable
(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 Entry into a Material Definitive Agreement.
On January 31, 2008, Circuit City Stores, Inc. (the "Company") and certain
of its subsidiaries (the "Subsidiaries") entered into a Second Amended and
Restated Credit Agreement (the "Credit Agreement") with the banks named in the
Credit Agreement as Lenders, Bank of America, N.A., as administrative agent and
collateral agent, Banc of America Securities, LLC, as lead arranger and joint
bookrunner, Bank of America, N.A., as Canadian administrative agent and Canadian
collateral agent, Wells Fargo Retail Finance, LLC, as syndication agent and
joint bookrunner, General Electric Capital Corporation and JPMorgan Chase Bank,
N.A., as co-documentation agents, and Wachovia Capital Finance Corporation
(Central), as senior managing agent. The Subsidiaries that are co-borrowers
under the Credit Agreement are Circuit City Stores West Coast, Inc., Circuit
City Stores PR, LLC and InterTAN Canada Ltd.
The Credit Agreement amends and replaces the Amended and Restated Credit
Agreement dated as of July 8, 2004, as amended, which permitted aggregate
borrowings of up to $500 million. The Credit Agreement specifically increases
the available borrowings from the Lenders, appoints a new administrative agent
and collateral agent and extends the expiration date from June 27, 2009, to
January 31, 2013.
The Credit Agreement provides for aggregate borrowings of up to $1.3
billion. Of this amount, up to $50 million is available for borrowing by
InterTAN Canada Ltd. The aggregate $1.3 billion borrowings limit also includes a
$60 million limitation on swingline loans and a $350 million limitation on
standby and documentary letters of credit and banker's acceptances. The Credit
Agreement provides the Company with an option to request an increase in the
aggregate borrowings limit in an amount not to exceed $300 million.
The borrowings under the Credit Agreement will continue to be secured
primarily by the Company's inventory and credit card receivables. The maximum
credit extensions, including loans and outstanding letters of credit, permitted
under the Credit Agreement on any date will be determined from a borrowing base
calculated as a percentage of the Company's eligible inventory and accounts
receivable as of that date. The Company is required to maintain a minimum level
of available borrowings under the Credit Agreement. Borrowings under the Credit
Agreement are available for working capital, letters of credit, capital
expenditures, permitted acquisitions, permitted share repurchases, permitted
dividends, repayment of permitted indebtedness and other general corporate
purposes.
Borrowings under the Credit Agreement bear interest at variable rates based
on the prime rate, LIBOR or the banker's acceptance rate, depending on the type
of borrowing, plus an additional margin based on the type of borrowing and the
amount of available borrowings under the Credit Agreement. Interest and fees are
payable monthly. Any outstanding amounts under the Credit Agreement will be due
and payable on January 31, 2013. As of February 4, 2008, the amounts outstanding
under the Credit Agreement were approximately $49.7 million, which represented
outstanding letters of credit.
The Credit Agreement contains customary representations and warranties,
conditions, covenants and events of default. There are no financial covenants.
The Credit Agreement also places limitations on specific uses of borrowings for
dividends, stock repurchases and acquisitions. Management does not believe that
the limitations contained in the Credit Agreement will, in the foreseeable
future, adversely affect the Company's ability to use the Credit Agreement and
execute its business plan. However, there can be no assurance in this regard.
In addition to participation in the Credit Agreement, certain of the
Lenders or their affiliates provide other services to the Company and the
Subsidiaries, including cash management services, leasing arrangements,
private-label credit services, credit card processing services and other
corporate financial services.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
On January 31, 2008, the Company and the Subsidiaries entered into the
Credit Agreement. The information provided in Item 1.01 above is incorporated by
reference into this Item 2.03.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
CIRCUIT CITY STORES, INC.
(Registrant)
Date: February 6, 2008 By: /s/Reginald D. Hedgebeth
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Reginald D. Hedgebeth
Senior Vice President,
General Counsel and Secretary