NCR (NYSE:VYX) Atleos Corporation (NYSE:NATL) has entered into an amended credit agreement, increasing its financial flexibility with $400 million in new financing, according to an 8-K filing with the Securities and Exchange Commission. The Maryland-based company, specializing in calculating and accounting machines, disclosed the financial maneuver on Thursday.
The amendment, dated Wednesday, October 17, 2024, to the original September 27, 2023, credit agreement, includes a $100 million increase in revolving credit commitments, bringing the total to $600 million, and establishes $300 million in incremental term loan commitments.
Proceeds from the new Term A-2 Loans will be used to prepay a portion of the existing Term B Loans, cover related transaction fees, and serve general corporate purposes. Following the prepayment, the existing Term B Loans will be refinanced into new term loans totaling $445 million.
Interest rates for the Term A-1 Loans, Term A-2 Loans, and Revolving Credit Loans will be based on SOFR, or an alternative rate for non-dollar amounts, with a margin ranging from 2.00% to 3.00% per annum, depending on the company's leverage ratio. The new Term B Loans will carry a margin of 3.75% for SOFR-based loans and 2.75% for Base Rate-based loans.
The maturity date for the Term A-2 Loans is set for October 16, 2028, aligning with the Revolving Credit Loans and Term A-1 Loans, while the new Term B Loans will mature on April 16, 2029.
This strategic financial restructuring aims to optimize NCR Atleos Corp's capital structure. This information is based on the company's recent SEC filing and does not include any speculative or forward-looking statements.
In other recent news, NCR Atleos Corp reported Q2 earnings that surpassed expectations, with an adjusted earnings per share (EPS) of $0.81. However, revenue fell slightly short of the anticipated $1.1 billion.
The company also revised its full-year 2024 guidance to an EPS of $2.90-$3.20 on revenue of $4.26-4.34 billion. DA Davidson maintained its Buy rating on NCR Atleos, while Stifel set a $31 price target with a Hold rating. Goldman Sachs also held a neutral stance on the company.
NCR Atleos has introduced a feature allowing LibertyX customers to sell bitcoin and withdraw cash from ATMs across the United States, a part of the Atleos ReadyCode API suite. This move is expected to simplify transactions from digital to physical currency. Furthermore, NCR Atleos is advancing its ATM as a Service (ATMaaS) strategy, with successful transition of 1,300 units in Q2.
These are among the recent developments for NCR Atleos as it continues to navigate its strategic transition and financial performance.
InvestingPro Insights
NCR Atleos Corporation's recent financial restructuring aligns with its current market position and financial health. According to InvestingPro data, the company has a market capitalization of $2.08 billion USD, with a revenue of $4.296 billion USD for the last twelve months as of Q2 2024. Despite a revenue growth of 4.25% over the same period, NCR Atleos is currently not profitable, with a negative P/E ratio of -20.75.
InvestingPro Tips highlight that while the company's net income is expected to grow this year, and analysts predict profitability, it currently suffers from weak gross profit margins. This context makes the new $400 million financing particularly significant, as it could provide the company with the necessary capital to improve its profitability.
The company's stock price has shown volatility, with a large price uptick over the last six months (36.83% total return) but a 15% decline in the last three months. This fluctuation suggests that investors should closely monitor the impact of the new credit agreement on the company's financial performance.
For investors seeking a more comprehensive analysis, InvestingPro offers 7 additional tips for NCR Atleos Corporation, providing deeper insights into the company's financial outlook and market position.
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