) recently announced its decision to refinance its long-term debt
and amend credit facilities to lower interest expenses. This
should boost investor confidence and help to maintain the
positive trend demonstrated by the company's stock over the last
couple of weeks.
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As per the new credit facility, JPMorgan Chase (the lead bank in
the transaction), along with co-arrangers Bank of America and Key
Bank, have entered into a loan agreement with AngioDynamics. The
credit facility includes 2 parts - a $100 million Term Loan and a
$100 million revolving line of credit. With the new debt
facilities, the company will retire all existing loans.
The new debt facility will reduce ANGO's interest rate on its
credit facility up to 75 basis points, which in turn will lower
interest expense by more than $1 million annually. Moreover, the
company will also be able to strengthen its balance sheet by
improving its future cash flow.
We believe that this amendment in the credit facility coupled
with debt refinancing will strengthen the financial position of
AngioDynamics and assist it to capitalize on forthcoming growth
opportunities. We also applaud management's initiative to take
advantage of the favorable debt market conditions in an effort to
control expenses in a difficult macro economic environment.
ANGO ended the fourth quarter of fiscal 2013 with cash and cash
equivalents and marketable securities of $24.0 million, down
36.3% from $37.6 million as of May 31, 2012. Total long-term debt
(including current portion) was $142.5 million, down 5% from
$150.0 million as of May 31, 2012. The company generated cash
from operations of $10.8 million and $7 million of free cash flow
in the fourth quarter.
Currently, AngioDynamics retains a Zacks Rank #3 (Hold). While we
prefer to remain on the sidelines about ANGO, other medical
instrument companies such as
Varian Medical Systems
) warrant a look. All these stocks carry a Zacks Rank #2