RE:$280M per year not counted in the adjusted EBITDA??What's your point exactly? Adjusted EBITDA should come in at about $240m for H2 2016. Extrapolating to 2017 and assuming no growth free cash flow should come in at $480M-280M-$30M(principal payments approximate number)=$170M.
I would expect the company to invest heavily over the next twelve months to bring new products to market and buy small portfolios from third parties with the cash they will raise from the note issuance.
The importance of the note offering cannot be understated. It gives the company the flexibility it needs to execute on a renewed business plan. Yes, they can no longer rely on significant price increases to achieve aggressive prior profit margin targets. Those margins will be narrower, but they really only need to be higher than debt servicing costs. They don't have to be 70%. 30% margins is all they need to achieve to grow EBITDA over time by continually deploying capital on product launches and product acquisitions.
What at the shorts don't get is that this is not a static business. The board and management are readjusting to the new reality and the current capital raise gives them ample flexibility to do so.
Continue shorting at at your own peril.
PROtrading wrote:
The $280M in interest payments alone are not counted in the "adjusted EBITDA"
OK, that's freaking funny no?
No wonder they want to flush all the debt holders and all those payments and liability by selling the Notes (company) to fellow "street"! And if secured debt holders get flushed, shareholders go first.
SWOSSSHHHHHH I hear the toilet bowl already!