MKS Instruments Makes a Voluntary $75 Million Pre-Payment on its Term Loan
Andover, Mass., Aug. 31, 2017 (GLOBE NEWSWIRE) -- MKS Instruments, Inc. (NASDAQ:MKSI), a global provider of technologies that enable advanced processes and improve productivity, today made a $75 million voluntary principal pre-payment on its term loan. This pre-payment is in addition to a voluntary principal pre-payment of $50 million made on July 11, 2017, and reduces the outstanding principal amount of the term loan to $448 million as of August 31, 2017, down from $780 million at origination.
"In just over a year since loan origination, we have now made six voluntary pre-payments totaling $325 million, and coupled with the scheduled payments and three re-pricings, we have reduced our annualized non-GAAP interest expense by over 55%, demonstrating our continued focus on deleveraging our balance sheet and reducing our cost of capital," said Seth H. Bagshaw, Senior Vice President and Chief Financial Officer.
About MKS Instruments
MKS Instruments, Inc. is a global provider of instruments, subsystems and process control solutions that measure, control, power, monitor, and analyze critical parameters of advanced manufacturing processes to improve process performance and productivity. Our products are derived from our core competencies in pressure measurement and control, flow measurement and control, gas and vapor delivery, gas composition analysis, residual gas analysis, leak detection, control technology, ozone generation and delivery, RF & DC power, reactive gas generation, vacuum technology, lasers, photonics, sub-micron positioning, vibration isolation, and optics. Our primary served markets include semiconductor capital equipment, general industrial, life sciences, and research. Additional information can be found at www.mksinst.com.
Use of Non-GAAP Financial Measure
Non-GAAP interest expense excludes amortization of debt issuance costs. This non-GAAP measure is not in accordance with Accounting Principles Generally Accepted in the United States of America (GAAP). MKS' management believes the presentation of this non-GAAP financial measure is useful to investors for comparing prior periods and analyzing ongoing business trends and financial results. Annualized GAAP and non-GAAP interest expense based upon $780 million principal outstanding and using the LIBOR based interest rate spread in effect on April 29, 2016, was $44 million and $39 million, respectively. Non-GAAP interest expense excludes $5 million in debt issuance costs. Annualized GAAP and non-GAAP interest expense based upon $448 million in principal currently outstanding and LIBOR plus 225 basis points would be $21 million and $17 million, respectively. Non-GAAP interest expense excludes $4 million in debt issuance costs.
SAFE HARBOR FOR FORWARD-LOOKING STATEMENTS
Statements in this release regarding MKS management's future expectations, beliefs, goals, plans or prospects constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are only predictions based on current assumptions and expectations. Actual events or results may differ materially from those in the forward-looking statements. Among the important factors that could cause actual events to differ materially from those in the forward-looking statements are the conditions affecting the markets in which we operate, including the fluctuations in capital spending in the semiconductor industry, and other advanced manufacturing markets, fluctuations in net sales to our major customers, our ability to successfully integrate Newport Corporation's operations and employees, unexpected risks, costs, charges or expenses resulting from the Newport acquisition or other acquisitions, the terms of the term loan financing, fluctuations in interest rates, MKS' ability to realize anticipated synergies and cost savings from the Newport acquisition, our ability to successfully grow our business, potential fluctuations in quarterly results, the challenges, dependence on new product development, rapid technological and market change, acquisition strategy, manufacturing and sourcing risks, volatility of stock price, international operations, financial risk management, and the other factors described in MKS' Annual Report for the year ended December 31, 2016 on Form 10-K filed with the SEC. MKS is under no obligation to, and expressly disclaims any obligation to, update or alter our forward-looking statements, whether as a result of new information, future events or otherwise after the date of this press release.