Miami, January 3, 2024 – OPKO Health, Inc. (NASDAQ: OPK) made an announcement today regarding its plans to initiate a private offering of $200.0 million aggregate principal amount of its convertible senior notes due 2029. The company also anticipates granting the initial purchaser in the offering an option to purchase an additional $30.0 million aggregate principal amount of the notes within a specified period.
The proceeds from this offering are intended to be utilized for privately negotiated repurchases of common stock and outstanding 4.50% convertible senior notes due 2025. The company expects to use up to $50.0 million of the net proceeds from the offering of the notes, and, if needed, cash on hand, to repurchase shares of the common stock from purchasers of notes in privately negotiated transactions.
In addition, the company also expects to enter into privately negotiated transactions with one or more holders of the company's outstanding 4.50% convertible senior notes due 2025 to repurchase a portion of such notes. The terms of these note repurchases are anticipated to be individually negotiated and will depend on several factors, including the market price of the common stock and the trading price of the 2025 convertible senior notes at the time of each repurchase.
In light of this news, the stock experienced a significant decline, dropping by 37.3% and is currently trading at $0.94 per share.
OPKO Health's chairman and chief executive officer, Phillip Frost, M.D., and vice-chairman and chief technical officer, Jane H. Hsiao, Ph.D., MBA, along with additional existing holders, have indicated an interest in acquiring approximately $70.0 million aggregate principal amount of the company's convertible senior notes due 2029 in exchange for approximately $70.0 million aggregate principal amount of the company's existing 5% convertible promissory notes.
The company's management provided insight into their plans and expectations for the future. "The net proceeds from the offering of the notes will be used for general corporate purposes and for privately negotiated repurchases of common stock and outstanding 4.50% convertible senior notes due 2025," said the company.
The full 8-K submission is available here.
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|---|
| Revenue (k) | $990,266 | $901,935 | $1,435,413 | $1,774,718 | $1,004,196 | $866,930 |
| Revenue Growth | n/a | -8.92% | 59.15% | 23.64% | -43.42% | -13.67% |
| Operating Margins | -17% | -30% | 4% | 1% | -23% | -17% |
| Net Margins | -15% | -35% | 2% | -2% | -33% | -24% |
| Net Income (k) | -$153,040 | -$314,925 | $30,586 | -$30,143 | -$328,405 | -$207,611 |
| Net Interest Expense (k) | -$6,072 | -$30,913 | -$9,031 | -$32,775 | -$165,268 | -$70,763 |
| Depreciation & Amort. (k) | $97,344 | $93,807 | $85,362 | $78,716 | $108,655 | $103,871 |
| Earnings Per Share | $563143663 | $595454394 | $0.05 | -$0.05 | -$0.46 | -$0.38 |
| Diluted Shares (k) | 563,144 | 595,454 | 640,655 | 648,078 | 719,061 | 751,506 |
| Free Cash Flow (k) | -$136,999 | -$185,263 | $5,794 | $6,181 | -$119,767 | -$41,112 |
| Capital Expenditures | $27,858 | $12,741 | $33,682 | $32,156 | $24,578 | $19,589 |
| Current Ratio | 1.1 | 1.3 | 1.39 | 2.49 | 1.85 | 1.78 |
| Total Debt (k) | $94,712 | $270,300 | $251,205 | $205,271 | $256,251 | $251,331 |
OPKO Health has weak revenue growth and a flat capital expenditure trend, positive expected EPS Growth, and negative cash flows. We also note that the company has healthy debt levels working in its favor. However, the firm has consistently negative margins with a stable trend.
