Premier Health of America Inc V.PHA

Investor Presentation - path for growth

[Stonksonlyup90]

Do these guys have an updated investor presentation somewhere? 

I see lots of talk on this board about the stock being undervalued. However, they are trading at an EV/EBITDA of roughly 7x... and bought SSI at roughly 4x EBITDA. Unless there is a path to significant EBITDA growth im not sure that I agree. GM % is shrinking and I don't see a lot of opportunity to scale rapidly.

[Torontojay]

  Im not sure I agree with this assessment.  The latest acquisition has been very profitable for them. According to md&a, they generated $2,363k  in operating income over 3 months and 52 days. This works out to annualized operating income of ~ $6.25 m which is phenomenal considering they acquired the company for only  ~ $21m. This is significant returns on invested

[Stonksonlyup90]

Earnouts of up to an additional $6M on that acquisition. You also need to consider the debt heavy balance sheet. IMO no more room for growth without issuing any stock, leverage ratios are quite high and if they don't scale up free cash flow generation it will take some time to get Balance Sheet healthy again

[Torontojay]

The way I see it is the stock price is pricing in a lot of negativity. Debt to ebitda is reasonable and is still under 3 with ebitda at ~ $16m annually and net debt of $41.816m In addition, the working capital is a healthy $18.408m.  I think most of the negativity is already priced into the stock and nobody is able to see the light at the end of the tunnel. Certainly more visibility from

[Stonksonlyup90]

How do you get to EBITDA of $16m/yr? I see EBITDA at about $2.6m for each of the last 2 Q's. So assuming Gross Margins continue to be compressed - maybe $10m/year. I also see Net Debt as about $50m. Largely explaining what you see as healthy debt leverage, vs what I see.

[Torontojay]

From the latest financials in Q2 of the current fisca year.    Adjusted EBITDA for the quarter was $2.6M ($1.9M for the same period in 2023), despite non-recurring costs of $1.4M, as described below. This works out to ~ $4m per year in ebitda. I get the same result for Q1 when you adjust for the fact that Solutions Staffing only operated for 52 days in the first quarter. That&

[Stonksonlyup90]

What is this $1.4m in non-recurring expenses.. is that not the point of "Adjusted EBITDA", to adjust for 1x non-recurring expenses? Seems largely related to transaction expenses. 

[Torontojay]

Going off the top of my head, these non recurring items are transactional costs and I believe delays in certain contracts which lowered margins.  When I look at Solutions Staffing over a 3 month period in Q1 of the fiscal year, I still get over $4m in ebitda. This is not a one off fluke quarter and they were able to achieve this despite of hours billed in the province of Quebec in a secular