Someone raised the point about "acquisitions to fund growth" as a reason to get all stoked up about buying FGP. Upon reflection and further investigation, I think my earlier math was far too generous, and I now consider the cost of acquisitions to be maintenance capital expenditures and thus should really be deducted from the cash flows (IMHO).
First, I showed that despite over $100M on acquisitions over the past 5 years, EBITDA is still lower. I then went looking for something more granular and found it.
From the 2000 10-K from about 11 years ago: "we serve approximately 1.1 million customers"
From the 2006 10-K: "we serve MORE THAN 1 MILLION customers"
And from 2008 to today: "we serve APPROXIMATELY 1 MILLION customers"
A cookie for anyone who spots the difference. It's obvious that they company's customer base has gone from 1.1, then shrunk to just over 1M, but now they say "approximately 1 million" which means it is below 1 million now, even with those acquisitions. I wonder how they define "approximate" ? Is 960K approximatley 1M?
Given they know EXCACTLY how many tanks they fill and tanks exchanged, why don't they just put the number out there. It gives one the impression that they don't really want to disclose an underlying erosion in the business.
It also makes me form the personal opinion that these outlays for acquisitions are just to stem the leak and thus are not "growth acquisitons' but really just a way of keeping the business somewhat stable and hanging on to that precious "approximatley 1 million" figure.