The reason revenues appear decent at this point is because of debt rollovers and asset sales, which have reduced the number of locations by over 30%. Firm has approx. 18 months to really turn things around, else the cycle will begin all over again (if my numbers are correct, some $1.5 billion in Senior and AMortizing Notes come due between 2005-2009. That's about $280 million per year.
Acquisitions, in the past, were facilitated at multiple of approx. 6X EBITDA, except in 1998 when average multiple paid was 9X EBITDA. Huge inventory of facilities for sale currently in the marketplace. Hardly no buyers at levels anywhere near original price. Hence, asset sales become key in response to insufficient revenue and net income.
Again, Company has an 18 month window in order to demonstrate to bankers and investors that they have a handle on the situation. Let's hope they can pull it off. Success is not dependent on asset sales, but growth in revenue and net income. All other initiatives only address the restructuring, thus we're seeing shrinkage where growth is the proper perscriptive.