Commends Management for Pursuing Strategic Alternatives to Enhance Liquidity and Unlock Shareholder Value
LA PORTE, Ind., Oct. 24, 2018 (GLOBE NEWSWIRE) -- A shareholder group consisting of Alesia Asset Management and private investor
Timothy Stabosz announced in an SEC filing on October 23rd that they had raised their position in PHI, Inc.
non-voting stock (NASDAQ: PHIIK, PHII) to 796,622 shares. Such purchases occurred between September 6th and October 22nd,
increasing the group’s combined stake from 4.6% to 6.2% of the class.
The group’s latest 13D filing can be found at the following web link:
https://www.sec.gov/Archives/edgar/data/350403/000157922018000009/0001579220-18-000009-index.htm
Since the group’s initial 13D filing on August 20th, a number of favorable events have transpired at the company. Most
significantly, these include: 1) the company’s strategic alternatives announcement, including the hiring of financial advisor
Houlihan Lokey to guide that process, 2) the retirement of the company’s previous $130 million secured credit facility with a new
covenant-free loan funded by an affiliate of the company’s CEO, and, finally, 3) the termination of the tender offer for the 5.25%
Senior Notes due in March of 2019.
Group member Timothy Stabosz commented, “We are thoroughly pleased and gratified by the actions taken to date by PHI management
since our original 13D filing and have increased our position in PHI accordingly, as a reflection of our growing confidence.
We believe the actions taken, while not yet reflected in the company’s stock price, represent a noteworthy turn of events. To
wit, these events have dramatically increased the likelihood that sizable value will be realized for shareholders by a deleveraging
sale of at least one of the company's two main divisions,” he said.
Stabosz went on, “We continue to believe a sale of the company’s air medical division should be the primary focus. While
our August 20th letter to management established an estimated valuation of at least $475 million for air medical, it is important
to highlight that such a valuation is quite conservative and does not consider significant positive changes that management has
made to the business in 2018. 1) PHI has recently grown its air medical base count by ~10% in conjunction with signing contracts
with new hospital partners, 2) the company modestly raised air medical prices around mid-year (the first such price increase since
2014), and 3) significant costs have been taken out of the business. We believe these changes conservatively increase our
original segment EBITDA estimate by at least 10%, adding well over $50 million to our original valuation of the air medical
segment,” Stabosz said.
Readers are invited to view the August 20th letter to management where the group discusses its estimated value for PHI’s two
main divisions, as well as the follow up letter dated September 6th, at the following two web links:
https://www.sec.gov/Archives/edgar/data/350403/000157922018000006/Exhibit1.8.20.18.bodletter.pdf
https://www.sec.gov/Archives/edgar/data/350403/000157922018000007/Exhibit4.9.6.18.bodletter.pdf
Christopher Olin of Alesia Asset Management commented, “Significant and meaningful progress has been made since our original 13D
filing, and we believe the path is clear to realizing the value of the company for shareholders and other stakeholders. We
believe both the air medical and oil & gas divisions are worth considerably more than the liquidation value of their assets and
that the entirety of PHI is likely worth, at a minimum, $1 billion in enterprise value. Such a valuation would result in a per
share realization of over $28,” Olin noted. “With $37.40 per share in book value, we find PHI incredibly compelling as
an investment, especially with a strategic alternatives process underway that will almost certainly be a major catalyst for
unlocking value.”
Alesia Asset Management LLC is a private investment firm managing concentrated equity portfolios for accredited investors.
Timothy Stabosz is a private investor specializing in contrarian, deep value, low-priced, Graham & Dodd style microcap company
stock investing.
CONTACT:
Christopher Olin, Alesia Asset Management LLC, at 818-458-8459 or chris@alesiamanagement.com;
or Timothy Stabosz at 219-363-7485, or tstabosz@csinet.net.