MKS Instruments, Inc. (NASDAQ: MKSI) has announced the successful completion of the refinancing of its existing $744 million secured tranche A term loans. The company utilized a portion of the proceeds from its $490 million incremental secured U.S. dollar tranche B term loans and €250 million incremental secured Euro tranche B term loans to complete the refinancing.
Seth H. Bagshaw, Executive Vice President and Chief Financial Officer, commented on the refinancing, stating, "This move adds flexibility, simplifies our capital structure, and is consistent with our longstanding track record of proactively managing our balance sheet. We are pleased with the strong market demand for our term loan B reflecting the strength of our operating model and appreciate the partnership of our lenders in facilitating the transaction."
JP Morgan acted as the sole lead arranger and sole bookrunner for the tranche A term loan refinancing.
As a result of the refinancing, the maturity of the refinanced loans has been extended to 2029, consistent with MKS' existing secured tranche B term loans. The company expects the refinancing to result in savings by reducing MKS' weighted average cost of debt on the amount of debt refinanced by approximately 30 to 35 basis points based on current interest rates.
MKS Instruments, Inc. is a global provider of enabling technologies that deliver foundational technology solutions to leading-edge semiconductor manufacturing, electronics and packaging, and specialty industrial applications. The company's solutions are critical to addressing the challenges of miniaturization and complexity in advanced device manufacturing, as well as ever-increasing performance requirements across a wide array of specialty industrial applications.
Following the announcement, the company's shares moved 2.6%, and are now trading at a price of $110.53.
The company's full 8-K submission is available here.
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|---|
| Revenue (MM) | $2,075 | $1,900 | $2,330 | $2,950 | $3,547 | $3,815 |
| Revenue Growth | n/a | -8.45% | 22.64% | 26.61% | 20.24% | 7.56% |
| Operating Margins | 24% | 12% | 19% | 24% | 17% | -37% |
| Net Margins | 19% | 7% | 15% | 19% | 9% | -45% |
| Net Income (MM) | $393 | $140 | $350 | $551 | $333 | -$1,718 |
| Net Interest Expense (MM) | $17 | $44 | $29 | $25 | $177 | $350 |
| Depreciation & Amort. (MM) | $80 | $110 | $99 | $104 | $146 | $323 |
| Earnings Per Share | $7.14 | $2.55 | $6.33 | $9.9 | $5.56 | -$25.95 |
| EPS Growth | n/a | -64.29% | 148.24% | 56.4% | -43.84% | -566.73% |
| Diluted Shares (MM) | 55 | 55 | 55 | 56 | 60 | 67 |
| Free Cash Flow (MM) | $351 | $181 | $428 | $553 | $529 | $141 |
| Current Ratio | 5.56 | 4.51 | 4.83 | 4.67 | 2.93 | 3.31 |
| Total Debt (MM) | $348 | $884 | $830 | $817 | $4,927 | $4,787 |
MKS Instruments's financial statements include several red flags such as weak operating margins with a negative growth trend, declining EPS growth, and The firm's free cash flows have a decent average of $363.75 Million over the last 6 years. The compounded average growth rate over this period is -11.9%, with a year-on-year growth variability coefficient of 1234.23%.. Additionally, the firm has MKS Instruments 's Long Term Debt / Equity ratio of 1.93 suggests that it has high debt levels.. On the other hand, the company benefits from growing revenues and increasing reinvestment in the business and an excellent current ratio.
