<<<$8.5 million-$9 million for the full year would be fine for 2000.>>>
As I recall, management estimated EBITDA of $8.4 to $8.5 million for this year using their guidance for the December quarter. This estimate was about $2 million higher than what they said 1999's EBITDA was ($6.5 million), which appears to have excluded product masters amortization (PMA) of $3.5 million for 1999.
If all the above is true, then EBITDA for 2000 including the PMA will be much higher than $8.5 to $9 million. Afterall, EBITDA including PMA for the 6-months through June was about $5.9 million. So it looks to me like EBITDA including PMA for 2000 could be around $12.2 million, or $2.00 per share. That means I bought more shares at 1.7 times EBITDA this morning! This is very cheap given ITGR's healthy growth in cash flow and conservative balance sheet.
I got the impression that they revised downward their estimates to be on the conservative side, and so there's a good chance they'll be on the high end of the guidance range. If so, cash flow will support leveraging up the balance sheet. I believe I caught a hint of this on the call. The most obvious reasons to increase debt would be (1) a share repurchase, (2) acquisition, or (3) significantly increase new product development. AG Edwards' analysis will help the board determine the best return on investment for shareholders, and I look forward to hearing the decision early next year. And if the balance sheet is leveraged via a junk bond private placement, I'm sure AG Edwards is hoping to win the business.