Enerpac Tool Group Corp. EPAC announced yesterday that it is opting for early redemption of its 5.625% senior notes and served notices for the same to the holders. These notes are due to mature in 2022.
The redemption is expected to lower the company’s annual interest expenses by $10 million.
Notably, the company’s shares increased 2.47% yesterday, ending the trading session at $14.50.
Inside the Headline
As noted, the voluntary redemption is in accordance with Apr 16, 2012 dated Indenture associated with the notes.
The company’s outstanding balance of 5.625% senior notes (set to expire in 2022) is worth $287.6 million. The company offers to pay 100% of principal amount as well as interest (accoutred and unpaid) for each senior note. The redemption date is set at Jun 15, 2020.
Amounts secured from $400 million of revolving credit facility will be used for redeeming the notes.
Notably. Enerpac Tool exited second-quarter fiscal 2020 (ended Feb 29, 2020) with long-term debt of $286.4 million. Its net debt to adjusted EBITDA was 1.3x at second-quarter end versus 2.1x at the end of the year-ago quarter.
Zacks Rank, Price Performance & Estimate Trend
With a market capitalization of $845.4 million, Enerpac Tool currently carries a Zacks Rank #3 (Hold). It is poised to gain from restructuring measures, growth in the medical business and product development. However, risks arising from uncertainties in its end markets due to coronavirus-related issues are concerns.
In the past three months, the company’s stock price decreased 41.8% compared with the industry’s fall of 34.2%.
In the past 60 days, the Zacks Consensus Estimate for Enerpac Tool’s earnings have been lowered by 40% to 45 cents per share for fiscal 2020 (ending August 2020) and by 29.2% to 75 cents for fiscal 2021 (ending August 2021).
Enerpac Tool Group Corp. Price and Consensus
Enerpac Tool Group Corp. price-consensus-chart | Enerpac Tool Group Corp. Quote
Some other top-ranked stocks in the Zacks Industrial Products sector are Silgan Holdings Inc. SLGN, Proto Labs, Inc. PRLB and Graphic Packaging Holding Company GPK. While Silgan currently sports a Zacks Rank #1 (Strong Buy), both Proto Labs and Graphic Packaging carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
In the past 30 days, earnings estimates for the companies improved for the current year. Further, earnings surprise for the last reported quarter was 16.33% for Silgan Holdings, 117.86% for Proto Labs and 24% for Graphic Packaging.
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