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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): October 8, 2004
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ADVANCED MARKETING SERVICES, INC.
(Exact Name of Registrant as Specified in Charter)
Delaware 0-16002 95-3768341
(State or Other Jurisdiction (Commission File Number) (I.R.S. Employer
of Incorporation) Identification No.)
5880 Oberlin Drive
San Diego, California 92121
(Address of Principal Executive Offices) (Zip Code)
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Registrant's telephone number, including area code: (858) 457-2500
N/A
(Former name or former address, if changed since last report)
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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 March 4, 2005, Advanced Marketing Services, Inc., a Delaware
corporation, Publishers Group West Incorporated, a California corporation, and
Publishers Group Incorporated, a California corporation (collectively, the
"Company Borrowers"), entered into Amendment No. 2 to that certain Loan and
Security Agreement dated October 8, 2004 (the "Loan Agreement") by and among the
Company Borrowers, certain lenders, and Wells Fargo Foothill, Inc. ("Wells Fargo
Foothill"). The terms of Amendment No. 2, which is effective as of February 28,
2005, include (a) rescinding of an existing Financial Covenant Triggering Event
following the receipt by the Agent of a Compliance Certificate for the period
ending September 30, 2005, provided such certificate evidences the Company
Borrowers' compliance with all requirements set forth therein and no Default or
Event of Default under the Loan Agreement shall have occurred (all capitalized
terms as defined in the Loan Agreement); (b) waiver of a violation of the
Company Borrowers' minimum EBITDA requirement; (c) extension of the period to
deliver certain financial statements and compliance certificates to June 30,
2005; (d) extension of the period to deliver certain projections of the Company
Borrowers to April 30, 2005; and (e) reduction of the Company Borrowers' minimum
EBITDA requirement to ($12.839 million) for the 3-month period ending March 31,
2005, with future periods and minimum amounts to be determined by the Agent in
its sole discretion.
Previously, on October 8, 2004, the Company Borrowers and Wells Fargo
Foothill had entered into Amendment No. 1 to the Loan Agreement, which amended
the Loan Agreement to (a) require the delivery of a cash flow statement on a
quarterly rather than monthly basis; and (b) reduce the Company Borrowers'
minimum EBITDA requirement pursuant to Section 7.18(a) to ($3.7 million), ($13.8
million), $4.172 million, and $3.967 million for the 3-, 6-, 9- and 12-month
periods ending June 30, 2004, September 30, 2004, December 31, 2004 and March
31, 2005, respectively, with minimum amounts for each trailing 12-month period
ending on the last day of each fiscal quarter thereafter to be determined by the
Agent in its sole discretion.
Copies of Amendment No. 2 and Amendment No. 1 are filed as Exhibits 10.1
and 10.2, respectively, to this report and are incorporated herein by reference.
A copy of the Loan Agreement was filed as an exhibit to the Company's Current
Report on Form 8-K filed with the Commission on April 30, 2004, and is
incorporated herein by reference. The descriptions of the transactions contained
in this report are qualified in their entirety by reference to such exhibits.
Item 9.01. FINANCIAL STATEMENTS AND EXHIBITS.
Exhibit 10.1 Amendment No. 2 to Loan Agreement.
Exhibit 10.2 Amendment No. 1 to Loan Agreement.
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SIGNATURES
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 hereunto duly authorized.
ADVANCED MARKETING SERVICES, INC.
Date: March 8, 2005 By: /s/ Bruce C. Myers
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Bruce C. Myers
President and Chief Executive Officer
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