Refinancing costs drive big 1Q loss at Accellent
Recent efforts to retool long-term debt at Accellent Inc. had the short-term effect of causing a big net loss for the medical device contract manufacturer during the three months ended March 31.
The Wilmington, Mass.-based company reported a $7.8 million net loss during the quarter on $122.7 million in revenues, reversing a $609,000 profit and $126.3 million in sales in 2009. Included in the loss was $5.8 million in refinancing costs after Accellent in January replaced a $400 million term loan with $400 million in senior notes maturing in 2017 and a $75 million revolving loan facility with a similarly sized asset-back loan package coming due in 2015.
Revenues shrank 3 percent from year ago levels but were up 10.8 percent from the final three months of 2009, ending a string of sequential drops in sales for Accellent extending to early 2008. The strongest gains were in its cardiology and endoscopy segments, company officials said, helping offset continued drops in its orthopaedic and neurology business.
Privately held Accellent performs contract manufacturing for many of the world's largest device companies, with Medtronic (NYSE:MDT) and Johnson & Johnson (NYSE:JNJ) each accounting for more than 10 percent of the company's $478 million in 2009 sales. Other major customers include Boston Scientific (NYSE:BSX), Abbott Laboratories (NYSE:ABT), Smith & Nephew (NYSE:SNN), St. Jude Medical (NYSE:STJ), Stryker (NYSE:SYK) and Zimmer (NYSE:ZMH).
Company officials on Thursday declined to provide financial guidance for upcoming quarters.