Quipt Home Medical Corp T.QIPT

Valuations

[lscfa]

Valuation multiple has not budged. Assume it stays constant. In one year's time the co. pays down $14.6 mil per credit agreement and has 10% organic growth. Stock price is $8.93.

 

 

	Before acquistion	After acquistion	1 yr later
Shs o/s	35,605	36,037	36,037
Sh price	$6.50	$7.50	$8.93
Mkt cap	231,433	270,278	321,974
Net debt	19,690	97,690	82,790
Ent. Value	251,123	367,968	404,764
Ebitda	33,600	49,000	53,900
EV/ebitda	7.47	7.51	7.51

[lscfa]

Corrected table. Prior one mixed us and cdn no.s     Before acquisition After acquisition 1 yr later Shs o/s 35,605 36,037 36,037 Sh price US $4.81 $5.64 $6

[besttobe]

The question will be.....Will they have the profit and FCF to pay down the debt. As it stands now they are a breakeven/loss company, with zero FCF.  GLTA

[lscfa]

the bankers think so, thus the loan..

[besttobe]

The bankers have nothing to lose. They now own the company for 20cents on the $. Abviously you lack experience regarding banking and finance.  GLTA

[dawggone]

bankers do not lend base on strength of collateral ( but it helps). they lend on ability to repay the loan (cash flow).

[besttobe]

Dawggone wrote "bankers do not lend base on strength of collateral ( but it helps). they lend on ability to repay the loan (cash flow)." Banks lend on both collateral and FCF. Just read the Quipt bank agreement for a better understanding, as to what the terms are.  Goodluck to you...

[dawggone]

bankers want their cake and eat it, too. they want loan repayment with interest. they do not want to take over ownership of collateral.  that cost them money.  bank regulators wil classify loans to different degrees if they are or become collateral dependant.   banks or bank investors do not classified loans.

[besttobe]

The higher the collateral secured the less risk... then the bigger the loan received and the lower the interest rate given. Sorry, but that is the way it works. We shall see how much debt Quipt pays off. We shall see. 

[dawggone]

don't disagree with most of your last post.  my point is a bank's primary emphasis is customer ability to repay. sure they want ( and get) lots of collateral.  however,  they have to believe there is abiliity to repay the debt without having to foreclose. otherwise, the credit will be subject to being classified by regulators or in-house analyst.

[besttobe]

Yes of course they hope they can repay, just like an investor that wants a return. However, there is no guarantee.  They have taken that risk with very little risk and tight restrictive convenants. (again read the banking agreement) The main thing the banks wants is to make a return with the least amount of risk as possible. They are as you know, lending other peoples money to make money

[lscfa]

Assume valuation multiple does not increase, the co. pays down $14.6 mil/yr per credit agreement and has 10% organic growth. Stock price is $8.98 US in 2 yrs, 43% appreciation.     Now 1 yr later 2 yrs later Shs o/s 36,037

[besttobe]

ISFCA wrote ', the co. pays down $14.6 mil/yr per credit agreement " Your thinking is flawed. They already stated they will have poor cash flow this year and will go further in debt, thus lower multiple. Thus why I am short. Next few Q's will demonstrate that, as discussed during the CC. GLTA

[lscfa]

You're wrong as usual..... Rahul Sarugaser Okay. That's very often. And then just a quick follow-up then, and then I'll get into back in queue. So in terms of the liquidity availability that you talked about with sort of the pay down on the debt. Can you maybe just give us a sense for your liquidity and the ability to sort of manage these incremental integration costs? And then I&

[besttobe]

This is debt used for liquitity...IE pay debt with debt. We shall see...  So between our ability on DDTL and the line of credit we feel like extremely comfortable with where we stand

[Tropicalsun]

Anybody that listened to the call, knows that B2B is outright lieing again and posting false information once again. Every word of his post is a complete LIE!!!!!!!

[gibbonsj]

Your share price 1 year out is based on valuation multiples at current. The assumption that because they have not changed to date they will remain on changed one year out is seriously flawed. To better understand the multiple going forward you have to weigh it against growth in institutional holdings because they are the only group that can suppress valuation multiples to the extent we have