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Lear Corp V.LEA


Primary Symbol: LEA

Lear Corporation is a global automotive technology company. The Company supplies complete seat systems, key seat components, complete electrical distribution and connection systems, high-voltage power distribution products, including battery disconnect units (BDUs), low-voltage power distribution products, electronic controllers and other electronic products to automotive manufacturers. Its segments include Seating and E-Systems. The Seating segment consists of the design, development, engineering and manufacture of complete seat systems and key seat components. The E-Systems segment consists of the design, development, engineering and manufacture of complete electrical distribution and connection systems, high-voltage power distribution products and other electronic products. Its software offerings include embedded control, cybersecurity software and software to control hardware devices. It also provides automated solutions and AI-based technologies for complex industrial challenges.


NYSE:LEA - Post by User

Bullboard Posts
Comment by Bobwinson Nov 27, 2011 4:52pm
244 Views
Post# 19270210

RE: dilution????????

RE: dilution????????The debt you mention at $15million is at 12%.  That's not good but it saved massive dilution due to the previous financing negotiated during the GFC.  Leader appears to be well aware of the dangers of debt.
They mentioned to me that they could easily have arranged for a big debt or equity issue in 2011 to buy more equipment but they declined because too much growth without trained crews is dangerous and can lead to disaster.  
They are balancing high growth with moderate debt and trying to live within their means.  
12% interest costs are relative.  Their growth in gross revs in Q3 over 2010 was 60%.  Their growth in EBITDA was 85%.  If they can maintain those relative stats, 12% interest is manageable.  
"No Western economy has growth that could ever support that. How the hell can Leader pay almost 2 M a year on interest costs ( almost twice the rate that will do Italy in!!!! )"  What is the growth rate of Italy versus their interest?


It's negative and that's why the interest rate is onerous.  


Leader has much higher growth than the interest rate they are paying so to the extent that the debt allowed them to expand their business, it's a good business decision.  


Why are you trying to creating all  this fear?  Leader is in a high growth, profitable business.  They are adding capacity and revs thru additional equipment and crews.  Another good year like 2011 and they should have a much better balance sheet, lower debt and improved prospects.  Q4 and Q1 should be very positive for the company.  Q2 2012 is unlikely to have as many weather issues as 2011.  Every energy company in Canada has to deal with Q2 issues.  




Bullboard Posts