- We are not releasing guidance according to our lawyers instructions. (what about the 'ebidta has many different interpretations' as a reason for not disclosing it)
- We know the result of the arbitration but we are not releasing them until we review it.
So if you know you have bad results for the quarter, and a terrible arbitration result, nothing makes more sense than scheduling a conference on friday, rely on lousy questions by analysts, and drop the final bomb on tuesday.
I guess the company may come out ok, but it's hard to rely on poor communication by management.
Just wanted to vent my feelings... honestly it's hard to know what to do...
<<Just wanted to vent my feelings... honestly it's hard to know what to do... >>
Easy to sympathize with your view. This arbitration result is a real slap in the gob. Let's try to look at a downside case, and see how bad it really is given the reduced market value today. Assume the following:
-- the ruling is enforced after a legal challenge and they must increase debt levels by $20 MM to pay it. -- that all expenses that are described as "one time", or "below the line" are in fact recurring and should be deducted in any calculation of REAL EBITDA. -- that FY'02 performance (without all the political revenue is a realistic expectation for FY '04
Now, what do we have:
--FY'02 REAL EBITDA $14.5 MM --FY'03 REAL EBITDA $18.5 MM --Enterprise value @$5.00 per ADR $120 MM* (which calc. includes the payment of the $20 MM arbitration award) -- EV as a multiple of FY'03 6.5 times -- EV as a multiple of FY'04 8.3 times -- Very manageable debt load of < 2.5 times REAL EBITDA
My takeaway is that you can well justify a hold at these levels, and if you believe that some M&A event could happen, you should certainly hold tight. The concerns to me are:
-- less than heroic guidance in describing the '04 outlook -- uncertainty in replacing the Monitor programming (may be overplayed) -- lack of liquidity in the stock (we all knew that) -- abysmal communications (performance?) from management
* EV calculated as follows: -- 18.1 MM ADR times $5.00, PLUS -- Adjusted net debt of $29 MM