RE:RE:Management Need to support SP by buyingmukeshluhano wrote: Step doesn't have free cash flow to buy their own shares or to pay the dividends.
Management mentioned in the conference call that maintenance capital will be approximaly $40 to $50 million next year, so next year they will have free cash flow. However, they said they will use entire free cash flow to repay the debt.
Management screwed up shareholders big time when they elected to buy Tucker using real currency and by adding debt to their balance sheet. Back then their stock price was trading around $10. They could have issued shares, added zero $ debt and diluted arc financial. Weren't they happy with the deal? Hindsight 20/20, company sp has lost more than 70% of its value whereas its debt is increasing. Reducing working capital and being efficient in an oversupplied market are goint to be crucial for free cash flow generation. Company is forcasting free cash +ve next year. Well, this is good but the money should be directed to share buyback specially when yor sp is at all time low. Doing so will reduce OS count and give the company the flexibility to change its model into a dividend paying one in the future.