) rose 2.28% following an announcement to amend its credit
agreement. The company ended the session at $10.32 per share.
Symmetry Medical disclosed to repay its high-cost mezzanine debt.
The company has decided to pay its mezzanine debt much earlier
than the original due date in Dec 2017 ($67.0 million outstanding
as of Sep 30, 2013). The debt will be repaid using the existing
$200.0 million senior secured revolving credit facility.
Repayment of high interest bearing debt is expected to have a
major financial impact, primarily on the earnings of Symmetry
Medical. Management anticipates that it will be accretive to 2014
earnings by 10 cents.
Following the amendment, Symmetry Medical foresees its total
leverage ratio to be as follows: 4.00x through the fourth quarter
of 2013 and first quarter of 2014, 3.75x through second quarter
2014, 3.50x through fourth quarter 2014 and 3.25x thereafter.
The above repayment decision is a part of Symmetry Medical's plan
to reduce its debt burden, as it leads to lower interest payments
and higher earnings for investors. Symmetry Medical exited the
third quarter with a long-term debt (including current portion)
of $108.3 million versus $211.2 million at the end of 2012.
Debt reduction has always been a top priority for Symmetry
Medical as in the last two years it has cleared off debt worth
$100 million. Such repayment initiatives make the balance sheet
of the company flexible, thus enhancing scope to maximize value
for the shareholders in the long term.
Currently, the stock carries a Zacks Rank #2 (Buy). Investors
interested in the industry can consider stocks like
Hill-Rom Holdings, Inc.
INSYS Therapeutics, Inc.
). While NuVasive, Inc. carries a Zacks Rank #1 (Strong Buy),
Hill-Rom Holdings, Inc. and INSYS Therapeutics, Inc. each carries
a Zacks Rank #2 (Buy).
HILL-ROM HLDGS (HRC): Free Stock Analysis
INSYS THERAP (INSY): Free Stock Analysis
NUVASIVE INC (NUVA): Free Stock Analysis
SYMMETRY MEDICL (SMA): Free Stock Analysis
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