Magnite Announces Debt Resturcting, Market Approves

Magnite (NASDAQ: MGNI) has announced its intention to refinance its existing senior secured credit facilities with new credit facilities, consisting of a term loan facility and a revolving credit facility. The company plans to replace its $360.0 million term loan facility and $65.0 million revolving credit facility with a new senior secured term loan facility and a new senior secured revolving credit facility. The net proceeds of the new credit facilities will be used to repay the existing credit facilities in full, as well as for general corporate purposes and working capital.

As of December 31, 2023, the outstanding principal amount of the existing term loan facility was $351.0 million, and the company had no outstanding borrowings under its existing revolving credit facility. The consummation of the refinancing and the entry into the new credit facilities is subject to market and other conditions.

In addition, during the fourth quarter of 2023, the company repurchased $70.0 million of its convertible notes for an aggregate purchase price of $60.7 million as part of its previously announced $100 million repurchase plan. As of December 31, 2023, the principal amount of convertible notes outstanding was approximately $205.1 million.

Commenting on the announcement, the company's management stated, "We are taking proactive steps to refinance our existing credit facilities, which will provide us with financial flexibility and support our long-term growth strategy. We believe that the new credit facilities will better position us to execute our business plans and capitalize on opportunities in the evolving advertising market."

Following the announcement, the company's shares moved 3.7%, reaching a trading price of $9.28.

The company's full 8-K submission is available here.

2018 2019 2020 2021 2022 2023
Revenue (k) $124,685 $156,414 $221,628 $468,413 $577,069 $608,177
Revenue Growth n/a 25.45% 41.69% 111.35% 23.2% 5.39%
Operating Margins -51% -18% -24% -17% -20% -36%
Net Margins -50% -16% -24% 0% -23% -37%
Net Income (k) -$61,822 -$25,478 -$53,432 $65 -$130,323 -$226,483
Net Interest Expense (k) $988 $789 $50 -$19,848 -$29,260 -$32,256
Depreciation & Amort. (k) $35,338 $32,126 $49,248 $146,886 $216,052 $301,411
Earnings Per Share -$1.22 -$0.48 -$4.3 $0.0 -$0.98 -$1.67
EPS Growth n/a 60.66% -795.83% 100.0% n/a -70.41%
Diluted Shares (k) 50,746 59,595 12,438 136,261 132,887 135,057
Free Cash Flow (k) -$34,119 $20,558 -$26,357 $108,892 $161,735 $184,037
Capital Expenditures $11,433 $11,425 $14,292 $17,697 $30,815 $29,950
Current Ratio 1.25 1.17 1.16 1.14 1.18 1.12

Magnite has consistently negative margins with a positive growth rate, declining EPS growth, and Magnite has a highly leveraged balance sheet owing to its current Net Debt / EBITDA ratio of 3.87, and its average of 5.37 over the last 6 years.. On the other hand, the company benefits from growing revenues and increasing reinvestment in the business and The firm's free cash flows have a decent average of $69.12 Million over the last 6 years. The compounded average growth rate over this period is 94.9%, with a year-on-year growth variability coefficient of 319.49%.. Furthermore, Magnite has just enough current assets to cover current liabilities.

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