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Shares of Symmetry Medical (SMA - Analyst Report) 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 NuVasive, Inc. (NUVA - Snapshot Report), Hill-Rom Holdings, Inc. (HRC - Snapshot Report) and INSYS Therapeutics, Inc. (INSY - Snapshot Report). 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).

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