03-03-2015, 10:01 AM
(This post was last modified: 03-03-2015, 10:04 AM by Dividend Watcher.)
I understand both your concerns about debt. I'm leery too but management seems to have handled it well.
To answer Benjamin first. When interest rates change, their interest costs will be unaffected. They've only have 2 secured senior notes outstanding: a term loan due in 2017 ($380M) and the note I mentioned due in 2024. They also have a revolver which, in total, is less than $100M. As best as I can tell, they are all at fixed rates.
I graphed cash & equivalents vs. LT debt:
I was going to add debt/equity but for the first 4 years, they had a huge negative equity due to no retained earnings and commitments to IMG Global (the original company) and Mosaic which was part of the recapitalization program. I don't have the details on that whole affair so can't speak further about it. The graph was unreadable because of those large swings.
Also, for the last 5 years, interest coverage averaged around 7-10x. I don't have all the details about 2014 because the full financials aren't out yet.
They due have some currency risk with the Canadian dollar and the British pound. Other countries they market to are a very small percentage. Currency hasn't seemed to affect them much over the last 10 years.
To answer Benjamin first. When interest rates change, their interest costs will be unaffected. They've only have 2 secured senior notes outstanding: a term loan due in 2017 ($380M) and the note I mentioned due in 2024. They also have a revolver which, in total, is less than $100M. As best as I can tell, they are all at fixed rates.
I graphed cash & equivalents vs. LT debt:
I was going to add debt/equity but for the first 4 years, they had a huge negative equity due to no retained earnings and commitments to IMG Global (the original company) and Mosaic which was part of the recapitalization program. I don't have the details on that whole affair so can't speak further about it. The graph was unreadable because of those large swings.
Also, for the last 5 years, interest coverage averaged around 7-10x. I don't have all the details about 2014 because the full financials aren't out yet.
They due have some currency risk with the Canadian dollar and the British pound. Other countries they market to are a very small percentage. Currency hasn't seemed to affect them much over the last 10 years.
=====
“While the dividend itself is merely a rearrangement of equity, over time it's more like owning an apple tree. The tree grows the apples back again and again and again, and the theoretical value of the tree doesn't change just because of when the apples are about to fall.” - earthtodan
“While the dividend itself is merely a rearrangement of equity, over time it's more like owning an apple tree. The tree grows the apples back again and again and again, and the theoretical value of the tree doesn't change just because of when the apples are about to fall.” - earthtodan