ADMA Biologics Announces Partial Paydown of Senior Term Loan Credit Facility

Rhea-AI Summary

ADMA Biologics announced a $30 million partial paydown of its senior secured term loan facility with Ares Capital, using cash on hand. This represents the second paydown in four months, reducing the company's total gross debt by 29% to $75 million. The remaining debt consists of a $42.5 million revolving credit facility and $32.5 million outstanding under the term loan facility.

The company attributes this debt reduction to organically generated cash flow, and management expects the lowered interest expense to enhance earnings growth potential in upcoming periods. ADMA plans to continue optimizing its cost of both debt and equity capital moving forward.

Positive

• Reduced total gross debt by 29% to $75 million
• Second debt paydown in four months demonstrates strong cash flow generation
• Lower interest expense expected to enhance earnings growth
• Company using organic cash flow for debt reduction

Negative

• Still maintains $75 million in total debt obligations

Insights

Financial Analyst

The $30 million debt reduction represents a strategic financial move that significantly improves ADMA's balance sheet health. The company's ability to pay down debt using cash on hand signals robust operational cash flow generation and financial discipline. The reduction in total debt to $75 million, marking a 29% decrease, will result in meaningful interest expense savings, directly boosting bottom-line performance. This strengthened financial position may enhance ADMA's flexibility for future growth initiatives and potentially improve its borrowing terms. The reduction in leverage could also make the company more attractive to institutional investors who prioritize strong balance sheets. The company's capital structure now consists of a more balanced mix between a $42.5 million revolving credit facility and $32.5 million term loan, providing better operational flexibility. The second major debt paydown in just four months demonstrates accelerating financial strength and management's commitment to optimizing the capital structure.

Market Research Analyst

The strategic debt reduction aligns with broader industry trends where biotech companies are prioritizing financial stability amid rising interest rates. ADMA's ability to utilize cash reserves for debt reduction while maintaining operational growth suggests strong underlying business fundamentals. The market typically rewards such deleveraging initiatives, especially in the current macroeconomic environment where balance sheet strength is paramount. This move could potentially lead to multiple expansion as reduced financial risk often correlates with higher valuation multiples. The biotech sector has seen increased investor focus on companies demonstrating fiscal responsibility alongside commercial execution. ADMA's proactive debt management, coupled with its end-to-end commercial biopharmaceutical business model, positions it favorably within the specialty biologics space. The emphasis on organic growth funding debt reduction, rather than relying on equity dilution, should resonate positively with institutional investors focused on sustainable business models.

Cash on Hand Utilized to Repay $30 Million of Senior Secured Term Loan Facility to Ares Capital

Lowers ADMA’s Total Debt to $75 Million, a 29% Reduction

Further Supports Earnings Growth Outlook

RAMSEY, N.J. and BOCA RATON, Fla., Dec. 20, 2024 (GLOBE NEWSWIRE) -- ADMA Biologics, Inc. (Nasdaq: ADMA) (“ADMA” or the “Company”), an end-to-end commercial biopharmaceutical company dedicated to manufacturing, marketing and developing specialty biologics, today announced it has repaid $30 million from its original $62.5 million senior secured term loan facility with Ares Capital. Following the partial paydown, ADMA has further reduced its total gross debt to $75 million, comprised of its $42.5 million revolving credit facility and $32.5 million now outstanding under its term loan credit facility. The partial paydown was funded by utilizing cash on hand.

"ADMA’s organically generated cash flow has enabled the pay down of $30 million of our senior secured credit facility,” said Adam Grossman, President and Chief Executive Officer of ADMA. “The second paydown of our senior credit facility in four months reduces our total gross debt by 29%, and the lowered interest expense is expected to further enhance our earnings growth potential in the immediate periods ahead. This decision is a testament to our confidence in the sustained growth of earnings and the anticipated ongoing cash generation. We expect to further reduce and optimize ADMA’s cost of both debt and equity capital going forward.”

About ADMA Biologics, Inc. (ADMA)

ADMA Biologics is an end-to-end commercial biopharmaceutical company dedicated to manufacturing, marketing and developing specialty biologics for the treatment of immunodeficient patients at risk for infection and others at risk for certain infectious diseases. ADMA currently manufactures and markets three United States Food and Drug Administration (FDA)-approved plasma-derived biologics for the treatment of immune deficiencies and the prevention of certain infectious diseases: BIVIGAM® (immune globulin intravenous, human) for the treatment of primary humoral immunodeficiency (PI); ASCENIV™ (immune globulin intravenous, human – slra 10% liquid) for the treatment of PI; and NABI-HB® (hepatitis B immune globulin, human) to provide enhanced immunity against the hepatitis B virus. ADMA manufactures its immune globulin products at its FDA-licensed plasma fractionation and purification facility located in Boca Raton, Florida. Through its ADMA BioCenters subsidiary, ADMA also operates as an FDA-approved source plasma collector in the U.S., which provides its blood plasma for the manufacture of its products. ADMA’s mission is to manufacture, market and develop specialty biologics and human immune globulins targeted to niche patient populations for the treatment and prevention of certain infectious diseases and management of immune compromised patient populations who suffer from an underlying immune deficiency, or who may be immune compromised for other medical reasons. ADMA holds numerous U.S. and foreign patents related to and encompassing various aspects of its products and product candidates. For more information, please visit www.admabiologics.com.

Cautionary Note Regarding Forward-Looking Statements

This press release contains “forward-looking statements” pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, about ADMA Biologics, Inc. (“we,” “our” or the “Company”). Forward-looking statements include, without limitation, any statement that may predict, forecast, indicate, or imply future results, performance or achievements, and may contain such words as “confident,” “estimate,” “project,” “intend,” “forecast,” “target,” “anticipate,” “plan,” “planning,” “expect,” “believe,” “will,” “is likely,” “will likely,” “should,” “could,” “would,” “may,” or, in each case, their negative, or words or expressions of similar meaning. These forward-looking statements include, but are not limited to, statements about the Company’s future results of operations, including, but not limited to, the Company’s earnings growth outlook, cash balance and cost of debt and equity capital, as well as expected benefits from paying down outstanding debt. Actual events or results may differ materially from those described in this press release due to a number of important factors. Current and prospective security holders are cautioned that there also can be no assurance that the forward-looking statements included in this press release will prove to be accurate. Except to the extent required by applicable laws or rules, ADMA does not undertake any obligation to update any forward-looking statements or to announce revisions to any of the forward-looking statements. Forward-looking statements are subject to many risks, uncertainties and other factors that could cause our actual results, and the timing of certain events, to differ materially from any future results expressed or implied by the forward-looking statements, including, but not limited to, the risks and uncertainties described in our filings with the U.S. Securities and Exchange Commission, including our most recent reports on Form 10-K, 10-Q and 8-K, and any amendments thereto.

INVESTOR RELATIONS CONTACT:
Michelle Pappanastos
Senior Managing Director, Argot Partners | 212-600-1902 | michelle@argotpartners.com

FAQ

How much debt did ADMA Biologics pay down in December 2023?

ADMA Biologics paid down $30 million of its senior secured term loan facility with Ares Capital in December 2023.

What is ADMA's remaining debt structure after the December 2023 paydown?

After the paydown, ADMA's total debt is $75 million, consisting of a $42.5 million revolving credit facility and $32.5 million in term loan credit facility.

What percentage did ADMA reduce its total gross debt by?

ADMA reduced its total gross debt by 29% through this partial paydown.

How did ADMA fund the $30 million debt paydown?

ADMA funded the $30 million debt paydown using cash on hand generated from organic operations.

What is the expected impact of ADMA's debt reduction on earnings?

The debt reduction and resulting lower interest expense is expected to enhance ADMA's earnings growth potential in immediate future periods.