UTICA, N.Y., May 28 /PRNewswire-FirstCall/ --
CONMED Corporation (Nasdaq: CNMD) announced today that it intends to refinance
its 9% senior subordinated bonds due in 2008 with the proceeds of an expansion
of its senior term loan. The 9% senior subordinated bonds are callable at a
premium over par of 4.5%. Consequently, the Company will incur a pre-tax
charge of approximately $5 million for the call premium. The senior term loan
expansion of up to $165 million is expected to carry an interest cost of 2.75%
over Libor (90 day Libor currently is quoted at approximately 1.30%), for a
current expected all-in-rate of 4.05%. This compares favorably with the 9%
interest cost of the bonds. Should Libor interest rates stay at current
levels, the Company would save over $5 million annually in interest costs.
The anticipated proceeds of the term loan expansion, expected to be
completed early in the third quarter of 2003, will be used to pay-off the
$112.7 million of 9% senior subordinated bonds now outstanding, fund the
$5 million call premium, and pay-off revolver outstandings of $47.3 million.
Additionally, the Company will write-off the unamortized deferred financing
fees associated with bonds amounting to approximately $2 million pre-tax. The
revolver outstandings were due to the acquisition of Bionx Implants, Inc.,
completed in March 2003, and the May 1, 2003 refunding of $15 million of the
9% senior subordinated bonds.
Mr. Joseph J. Corasanti, President and Chief Operating Officer of CONMED,
said, "This financing transaction will improve our cash flow and our earnings.
Subsequent to the bond refinancing, diluted earnings per share should increase
approximately $0.10 annually due to lower interest costs. We believe it is
prudent to take advantage of the lower interest rate environment."
Upon payment of the bonds, the Company's debt is expected to consist of
its present $100 million revolving credit facility, expiring in 2007, with
minimal current usage, a $264.5 million term loan with mandatory annual
principal payments of approximately $2.7 million through 2007, $72.1 million
in 2008 and $180.2 million in 2009, and other loans approximating $22 million.
CONMED Profile
CONMED is a medical technology company specializing in instruments,
implants, and video equipment for arthroscopic sports medicine, and powered
surgical instruments, such as drills and saws, for orthopedic, ENT,
neuro-surgery, and other surgical specialties. The Company is also a leading
developer, manufacturer and supplier of RF electrosurgery systems used
routinely to cut and cauterize tissue in nearly all types of surgical
procedures worldwide, endoscopy products such as trocars, clip appliers,
scissors, and surgical staplers. The Company offers integrated operating room
design and intensive care unit service managers. The Company also manufactures
and sells a full line of ECG electrodes for heart monitoring and other patient
care products. Headquartered in Utica, New York, the Company's 2,500 employees
distribute its products worldwide from eleven manufacturing locations.
Forward Looking Information
This press release contains forward-looking statements based on certain
assumptions and contingencies that involve risks and uncertainties. The
forward-looking statements are made pursuant to the safe harbor provisions of
the Private Securities Litigation Reform Act of 1995 and relate to the
Company's performance on a going-forward basis. The forward-looking statements
in this press release involve risks and uncertainties which could cause actual
results, performance or trends, including the above mentioned anticipated
charges and savings, to differ materially from those expressed in the
forward-looking statements herein or in previous disclosures. The Company
believes that all forward-looking statements made by it have a reasonable
basis, but there can be no assurance that management's expectations, beliefs
or projections as expressed in the forward-looking statements will actually
occur or prove to be correct. In addition to general industry and economic
conditions, factors that could cause actual results to differ materially from
those discussed in the forward-looking statements in this press release
include, but are not limited to: (i) the failure of any one or more of the
assumptions stated above, to prove to be correct; (ii) the risks relating to
forward-looking statements discussed in the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 2002; (iii) cyclical purchasing
patterns from customers, end-users and dealers; (iv) timely release of new
products, and acceptance of such new products by the market; (v) the
introduction of new products by competitors and other competitive responses;
(vi) the possibility that any new acquisition or other transaction may require
the Company to reconsider its financial assumptions and goals/targets; (vii)
changes in the interest rate environment; and/or (viii) the Company's ability
to devise and execute strategies to respond to market conditions.
SOURCE CONMED Corporation
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Related links:
http://www.conmed.com
Company News On-Call:
http://www.prnewswire.com/comp/201850.html
CONTACT:
Robert Shallish, Chief Financial Officer of
CONMED Corporation, +1-315-624-3206; Investors - Lauren Levine or
Lanie Fladell, or Media - Sean Leous, all of Morgen-Walke
Associates, +1-212-850-5600, for CONMED Corporation
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