) has entered into a $250 million revolving credit facility
Bank of America
Moreover, the credit agreement allows Stratasys to apply for
an extension of the credit facility of up to an additional $75
million upon the fulfillment of certain other conditions.
However, no information has been provided on the interest rate
related to the credit facility.
Per the agreement, Bank of America will act as the
Administrative Agent and Swing Line Lender while Citibank, the
banking arm of
), and HSBC Bank USA and National Association will be the
Co-Syndication Agents. Silicon Valley Bank will be the
Apart from the fact that Stratasys plans to use the fund
primarily for future acquisitions and investments for innovative
product launches, it is worth noting that borrowing costs have
also gone down significantly. So, this was a good time to obtain
easy financing at compelling prices. Corporate bonds and
borrowings from banks are in high demand as the U.S. treasuries
are yielding low rates. We believe that the aforementioned moves
by the company will provide it financial flexibility to drive
It is noteworthy that Stratasys has a decent cash balance of
$615.7 million (Cash and cash equivalents, short-term bank
deposits and restricted deposits) at the end of the recently
concluded third quarter. Moreover, the company did not have any
long-term debt on its balance sheet.
Also, Stratasys' third-quarter results were encouraging as
reported sales were better than expected, driven by solid
performances from both the Product and Services segments.
However, margins were impacted by the MakerBot acquisition and
Although these investments are expected to impact margins in
the short run, product launches and global expansion will help
Stratasys to generate incremental sales in the long run.
Stratasys operates a high-cost business model and competition
from big and small players like
3D Systems Corp.
) remains an added concern for the company. Nonetheless, the
acquisition of MakerBot is expected to aid its 3D systems
Currently, Stratasys carries a Zacks Rank #3 (Hold).
BANK OF AMER CP (BAC): Free Stock Analysis
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3D SYSTEMS CORP (DDD): Free Stock Analysis
STRATASYS LTD (SSYS): Free Stock Analysis
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