Sturm, Ruger & Company, Inc. Enters into a Loan Agreement with Regions Bank
January 11, 2022 at 11:23 am
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Sturm, Ruger & Company, Inc. announced on January 7, 2022, the Company entered into a Loan Agreement (Loan Agreement") with Regions Bank (Bank"). The Loan Agreement provides for a revolving line of credit of up to $40 million, with a $10 million sublimit for letters of credit. Advances made under the line of credit can be used for working capital and other general corporate purposes.
Outstanding amounts under the line of credit will bear interest at either 1) the Bloomberg Short-Term Bank Yield Index 1 Month plus 150 basis points, or 2) a fluctuating rate per annum equal to the greater of (i) the Bank's prime rate, or (ii) the Federal funds rate plus 50 basis points. All amounts outstanding under the Loan Agreement are due on January 7, 2024. Pursuant to the Loan Agreement, the credit facility is available to the Company provided that no event of default under the Loan Agreement shall have occurred and be continuing.
Upon the occurrence of an event of default under the Loan Agreement, including payment defaults, covenant defaults, and other customary defaults, the Company's obligations under the Loan Agreement may be accelerated. The Company may repay loans in whole or in part at any time. The Company's obligations under the Loan Agreement are unsecured and have not been guaranteed by any other person or entity.
Sturm, Ruger & Company, Inc. is principally engaged in the design, manufacture, and sale of firearms to domestic customers. The Company operates through two segments: firearms and castings. The firearms segment manufactures and sells rifles, pistols, and revolvers principally to a number of federally-licensed, independent wholesale distributors primarily located in the United States. The castings segment manufactures and sells steel investment castings and metal injection molding parts. The Company primarily manufactures firearm products, under the Ruger name and trademark. It also manufactures and sells accessories and replacement parts for its firearms. In addition, the Company manufactures lever-action rifles under the Marlin name and trademark. Its firearms products are sold through a select number of independent wholesale distributors, principally to the commercial sporting market. Its design and manufacturing operations are located in the United States.