RE:RE:RE:KRENSAVAGE COMING UP ON BNN ... NOW Steadyhands, I'm going to give you the benefit of the doubt of not being associated with Lattice or Craigbad since I never saw you on here before, but likely not the case. This week's flavour of attack seems to be distorting the meaning of EBITDA and Adjusted EBITDA. The quote you reference from the interview is particularly telling "You can't pay the bills with EBITDA, never mind adjusted EBITDA". Please enlighten us neophytes about what bills are not paid as part of the calculation of either number? Spell it out before you answer "Earnings before interest, taxes, depreciation and amortization". That means for EBITDA all operating expenses have already been taken into account. Adjusted EBITDA excludes non-recurring expenses such as the expenses related to the financing. It is a true cash flow calaculation and measures the cash flow generation capacity of a company.
In Concordia's case, Management has provided revised guidance of approximately $240M of EBITDA for the last 6 months of 2016. Annual interest with the new notes will be approximately $280M. This means for 2017 and assuming no growth, the company will generate $200M more than it requires to service the interest on debt and approximately $170M if you take principal payments into account. Let's not forget the company had $145M at the end of Q2 as well and will generate additional cash in H2 2016.
You state that they guided down in the last press release. Given recent ambulance chasing law suits, I submit to you instaed that they are now being very cautious with their disclosure in the middle of an offering. They are simply restating what they already said during the Q2 conference call. As to now using the word "believe" as opposed to "we are highly confident", that should have been the type of qualifer they used all of the time to ensure they get the full benefit of the forward loooking safe harbour for forward looking statements (for those who do not know what that is, read the end of any public company press release). There is one thing I agree with the shorts on and that is Management's reckless past public disclosure regarding foward looking statements. My belief is that they were very close to making a deal and panicked with their "we are very confident" statement becuase they saw the share price decreasing rapidly which likely was the straw that broke the camel's back with respect to whatever deal they had on the table at the time.
We are now in a new mode. No sale or private equity investment in shares. We have a debt issuance largely thanks to the unrelentless short attack. Does that mean it's game over? Far from it. If the issuance succeeds, the company will have ample liquidity to get over the second instalment for Cinven and to fund product launches and product acquisitions to grow EBITDA going forward. I have repeatedly posted the math based on revised guidance to the end of 2017 which shows that they did not even need this financing, but if they are going to grow revenue rather than rely on the current portfolio which will undergo attack, they defintiely do. It is that growth combined with the stable revenue from the vast majority of their portfolio which will make this company look very diferent in 12 to 18 months.
Let's agree to disagree, but I remain very bulllish on this company.
SteadyHandsStan wrote: My opinion, but I would have enjoyed seeing the video at the beginning of the year.
https://www.bnn.ca/video/why-one-firm-is-staying-short-on-concordia~967826
My biggest pet peeve: his comments are based on independent analysis on prescription data and past trasnactions. Well why isn't this data available to the public? I hear so many reasearch firms publishing independent reports for hedge funds and law firms such as Pacific Square Research and Vertias Reasearch who are all forensic accountants and are calling for bankruptcy and the subscription fees to get this research is in excess of $50,000 ??? Where is the little retail investor in all of this? Screwed that is where!
I did not realize the adjusted metrics ignores interest and other expenses. I liked his comment that he made "You can't pay the bills with EBITDA, never mind adjusted EBITDA" I also agree that a buyer has had six months to look at it and would have stepped up by now so I agree that they are looking at the same prescription data as the short sellers. If assets are worth 4 times gross profit that turns out to $2.4 billion and that doesn't come close to the debt.
The company sent out the wrong message deferring the earn out, and now putting on more debt. It is just buying themselves time. But if the longs are correct, then it can turn things around - but their latest press release has stated a profit warning so I am not as confident to dive in here Lumber as you say and buy at these levels. The market is telling you they have some serious problems by you saying that they are not even close I think you are wrong but understand how you must feel if you have been holding it since November.