MIMEDX Announces Improved Capital Structure with New Senior Secured Credit Facilities and Debt Refinancing

Rhea-AI Summary

MiMedx Group, Inc. (Nasdaq: MDXG) announced the refinancing of its existing indebtedness and obtaining additional borrowing capacity through new senior secured credit facilities totaling $95 million. The Facilities, due in January 2029, consist of a $75 million revolving credit facility and a $20 million term loan facility. The Company drew $50 million under the Facilities, using the proceeds to pay off all outstanding obligations under its existing credit facility with Hayfin Capital. The new debt facility provides greater flexibility, a reduction in interest expense, and additional borrowing capacity to fund organic and inorganic initiatives.

Positive

• Enhanced capital structure through refinancing and obtaining additional borrowing capacity
• Substantial reduction in interest expense
• Flexibility to fund long-term strategic goals

Negative

• None.

Insights

Financial Analyst

The refinancing of existing debt and securing additional borrowing capacity is a strategic financial move for MiMedx Group, Inc. The decision to refinance, particularly with a $75 million revolving credit facility and a $20 million term loan, suggests a proactive approach to managing the company's capital structure. This move likely anticipates future cash flow needs, aligning with strategic growth initiatives. The early repayment of the existing credit facility with Hayfin Capital, originally maturing in June 2025, indicates that the company is optimizing its interest expenses, which is a positive sign for cash flow management.

From a financial analysis standpoint, the reduction in interest expenses will improve the company's net income and earnings per share, assuming other factors remain constant. This could potentially lead to a more favorable view among investors and analysts, as it reflects a strong financial discipline and an improved ability to generate cash. Furthermore, the additional borrowing capacity provides a cushion for strategic investments, which could include mergers and acquisitions, R&D, or expanding market reach. However, it's crucial to monitor how the company utilizes this extra capital to ensure that it translates into revenue growth and does not simply inflate the balance sheet with underutilized assets.

Market Research Analyst

This strategic financial restructuring by MiMedx Group, Inc. can have a significant impact on its market positioning. The enhanced borrowing capacity and improved terms of the credit facilities reflect a vote of confidence from the financial institutions involved, which may be based on the company's past performance and future prospects. The relationship with banks like Citizens and Bank of America, N.A. is indicative of the company's creditworthiness and its ability to negotiate favorable terms.

It is worth noting that the healthcare industry, particularly the biotechnology sector where MiMedx operates, is capital-intensive and often requires significant investment for growth. Therefore, having access to additional capital at reduced interest rates is an advantage that can support both organic growth and strategic acquisitions. The ability to fund inorganic initiatives could position MiMedx favorably against competitors, provided these initiatives are executed effectively. The market's response to such financial maneuvers is generally contingent upon the subsequent deployment of capital and the tangible outcomes of the strategic priorities being pursued.

Economist

The broader economic implications of MiMedx Group, Inc.'s refinanced and additional borrowing capacity should be considered in the context of prevailing interest rates and economic conditions. If the refinancing was completed at a lower interest rate, it reflects a strategic capitalization on the current credit market conditions. This could indicate that the company is not only improving its financial health but also that it is doing so in an opportune economic window.

Moreover, the impact of such financial restructuring on the economy can be multiplicative. If MiMedx effectively channels the borrowed funds into productive initiatives, it could lead to job creation, innovation and economic growth within the biotech sector. However, it's important to consider the level of debt relative to the company's earnings before interest, taxes, depreciation and amortization (EBITDA). A significant increase in leverage could pose risks if the company's revenue or cash flow growth does not keep pace with debt servicing requirements, especially in a volatile economic environment.

New Credit Facilities Provide Substantial Interest Savings and Access to Additional Capital to Support Execution of Strategic Priorities

MARIETTA, Ga., Jan. 22, 2024 (GLOBE NEWSWIRE) -- MiMedx Group, Inc. (Nasdaq: MDXG) (“MIMEDX” or the “Company”) today announced that it has enhanced its capital structure by refinancing its existing indebtedness and obtaining additional borrowing capacity in support of the Company’s future growth objectives. These new senior secured credit facilities (the “Facilities”), totaling $95 million and due in January 2029, are comprised of a $75 million revolving credit facility and a $20 million term loan facility and were obtained through a syndicate of banks comprised of Citizens and Bank of America, N.A.

At closing, the Company drew $50 million under the Facilities, consisting of a $20 million term loan and $30 million in revolving loans, and used the proceeds of the loans to pay in full all of the outstanding obligations owing under its existing credit facility with Hayfin Capital, which was set to mature in June 2025.

MIMEDX Chief Financial Officer, Doug Rice commented, “As a result of the Company’s strong financial performance over the last year, we were in the position to strengthen our balance sheet and improve our overall capital structure. In addition to our solid cash generation in 2023, this new debt facility provides us with even greater flexibility in achieving our long-term strategic goals.”

Mr. Rice continued, “The terms on these new Facilities reflect the substantial progress we have made in improving our financial profile, simultaneously delivering a significant reduction in our interest expense and additional borrowing capacity that will enable us to prudently fund organic and inorganic initiatives. I am grateful for the expertise and partnership from Citizens Bank, which led this refinancing effort.”

Commenting on the new Facilities, Dan Fitzpatrick, President of Citizens, Mid Atlantic Region, stated, “When a client such as MIMEDX chooses Citizens, they are selecting a strategic partner committed to helping them achieve their goals. We have a deep understanding of the increasingly complex challenges our clients face and a strong track record of helping them succeed. We look forward to working closely with the MIMEDX team going forward.”

About MIMEDX
MIMEDX is a pioneer and leader focused on helping humans heal. With more than a decade of helping clinicians manage chronic and other hard-to-heal wounds, MIMEDX is dedicated to providing a leading portfolio of products for applications in the wound care, burn, and surgical sectors of healthcare. The Company’s vision is to be the leading global provider of healing solutions through relentless innovation to restore quality of life. For additional information, please visit www.mimedx.com.

About Citizens Financial Group, Inc.
Citizens Financial Group, Inc. is one of the nation’s oldest and largest financial institutions, with $222.0 billion in assets as of December 31, 2023. Headquartered in Providence, Rhode Island, Citizens offers a broad range of retail and commercial banking products and services to individuals, small businesses, middle-market companies, large corporations and institutions. Citizens helps its customers reach their potential by listening to them and by understanding their needs in order to offer tailored advice, ideas and solutions. In Consumer Banking, Citizens provides an integrated experience that includes mobile and online banking, a full-service customer contact center and the convenience of approximately 3,200 ATMs and approximately 1,100 branches in 14 states and the District of Columbia. Consumer Banking products and services include a full range of banking, lending, savings, wealth management and small business offerings. In Commercial Banking, Citizens offers a broad complement of financial products and solutions, including lending and leasing, deposit and treasury management services, foreign exchange, interest rate and commodity risk management solutions, as well as loan syndication, corporate finance, merger and acquisition, and debt and equity capital markets capabilities. More information is available at www.citizensbank.com or visit us on X (formerly Twitter), LinkedIn or Facebook.

About Bank of America
“Bank of America” and “BofA Securities” are the marketing names used by the Global Banking and Global Markets divisions of Bank of America Corporation. Lending, derivatives, other commercial banking activities, and trading in certain financial instruments are performed globally by banking affiliates of Bank of America Corporation, including Bank of America, N.A., Member FDIC. Trading in securities and financial instruments, and strategic advisory, and other investment banking activities, are performed globally by investment banking affiliates of Bank of America Corporation ("Investment Banking Affiliates"), including, in the United States, BofA Securities, Inc., which is a registered broker-dealer and Member of SIPC, and, in other jurisdictions, by locally registered entities. BofA Securities, Inc. is a registered futures commission merchant with the CFTC and a member of the NFA.

Investment products offered by Investment Banking Affiliates:

Are Not FDIC Insured

Are Not Bank Guaranteed

May Lose Value

© 2024 Bank of America Corporation. All rights reserved.

Contact:
Matt Notarianni
Investor Relations
470-304-7291
mnotarianni@mimedx.com

FAQ

What is the ticker symbol for MiMedx Group, Inc.?

The ticker symbol for MiMedx Group, Inc. is MDXG.

What are the details of the new senior secured credit facilities obtained by MiMedx Group, Inc.?

The new senior secured credit facilities consist of a $75 million revolving credit facility and a $20 million term loan facility, totaling $95 million and due in January 2029.

How much did MiMedx Group, Inc. draw under the new Facilities?

The Company drew $50 million under the Facilities, consisting of a $20 million term loan and $30 million in revolving loans.

How did MiMedx Group, Inc. use the proceeds of the new loans?

The Company used the proceeds of the loans to pay in full all of the outstanding obligations owing under its existing credit facility with Hayfin Capital.

What are the benefits of the new debt facility for MiMedx Group, Inc.?

The new debt facility provides greater flexibility in achieving long-term strategic goals, a reduction in interest expense, and additional borrowing capacity to fund organic and inorganic initiatives.