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Modtech Holdings, Inc. (MODTE) Message Board

  • bman2000 bman2000 Sep 19, 1998 8:32 AM Flag

    Debt and modt

    I only have one concern, at this point with modt.
    Debt. If they
    seek growth, in the future, by
    incurring debt we could
    have problems. Its the natural
    way of small companies to want
    growth, I hope they
    maintain low debt even if it slows growth.
    In my
    opinion that would be in the shareholders best interest.

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    • If MODT can earn more than their cost of debt, then they should surely go into debt to pursue profitable opportunities.

      • 1 Reply to rotha98
      • Here is MODT's management comments in the Aug.
        14th SEC filing regarding the June 30th financial
        statements. There is not any debt and the have plenty of cash
        and borrowing ability when the need arises.



        "LIQUIDITY AND CAPITAL RESOURCES

        To date, the
        Company has generated cash to meet its needs from
        operations, bank borrowings and public offerings. At
        June
        30, 1998, the Company had $25,426,000 in cash. During
        the six months ended June 30, 1998, the
        Company
        provided cash in it's operating activities.

        The
        Company has a revolving loan commitment that will expire
        September 1998. The Company is entitled to borrow,
        from
        time to time up to $20,000,000 with actual borrowings
        limited to specified percentages of eligible
        accounts
        receivables, equipment and inventories. On June 30, 1998, no
        amounts were outstanding under this loan. "


        If
        as you say you worry only about debt, I would think
        you have nothing to worry about.

        ProfSkeptic