Weekend reading: The debt treadmill / cash flow problems The cash flow problems will be very real here as the company has too many commitments relative to its cash generation capability. You can see this all in the MD&A.
They need to generate $15M-$18M of cash each year just to pay debt costs and dividends and then have a massive balloon payment in 2026. This doesn't mean any new investment in the business!!!
Cash on hand today is $70M. Commitments in the next 4 years is $130M. And they are digging the hole deeper and deeper each quarter. It also doesn't help that the Chinese joint venture is producing a $1M less cash. Or they keep losing patent cases.
2023:$15M
2024:$18M
2025:$18M
2026:$81M
Long term debt payments:
Primcipal payments double twice
2023: 3.4M
2024: 6.8M
2025: 6.8M
2026: 13.7M
Interest was at 5.96% prior to last fed rate hike, which will move this to 6.46%. The fed funds rate adds another 100bps so this will end up at a ~7.5% rate
2023: 2.3M
2024: 2.0M
2025: 1.5M
2026: 1.0M
Convertible debentures
2023: 3.4M
2024: 3.4M
2025: 3.4M
2026: 3.4M + $57.5M
Dividends
2023: 5.7M
2024: 5.7M
2025: 5.7M
2026: 5.7M