Considering Selling-Ignore Emotions and Focus on Financials Cash Position at End of 2016 & 2017
The mindless sheep that comprise the market continue to amaze me day after day. Consider projected cash balances for 2016 and even 2017 based on Mamagaement's revised guyidance before placing your sell order.
End of 2016 Cash Balance:
Cash at end of Q2: USD $145M
EBITDA for H2: USD $242M
Full Payment of Cinven Earn Out: USD $188 based on an exchange rate of 1.30 USD to GBP
Interest payments for H2: USD $120M
Principal payments for H2: USD$10M
Cash Balance at end of 2016: $145M + $242M- USD $188- USD$120- USD $10=$69
If Company defers half of Cinven earn out to February cash balance at end of 2016 becomes USD $69 + USD $94=USD $163
Cash Balance at end of 2017 Assuming no Growth and Full payment of Cinven Earn Out:
Cash Balance at Begninning of 2016: USD $69
EBITDA for 2017: USD $242+ USD $242=USD$484
Interest payments for 2017: USD $240M
Principal payments for 2017: USD $20M
Cash Balance at end of 2017: USD$69 + USD $484 - USD $240-USD $20M=USD$293
The company would have to lose more than 50% of its projected EBITDA to run into any liquidity crunch any time soon. Flip side, even if the company experiences some EBITDA erosion it will likely be made up in whole or in part from product launches. Don't let share price fool you into thinking this is going bust any time soon. The company is trading at less than one times annual EBITDA. That is a valuation that would say they are filing very soon and the numbers above tell a whole different story. In fact, they will not file anytime soon and likely will never do so. I wish I had more dry powder to invest.