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.