Actually dowjones, ISIL has $400 million in cash and only $200 million of debt. The dividend cost them $15 million per quarter ($60 million each year) Even their reduced earnings will cover that for quite awhile. Yes I agree the company is lagging and the ceo should be replaced, but come on- $5.00; no possibility !!!!!!!
I would like to add my 2 cents to this. ISIL actually has 389 million in cash, 375 million in debt and generated 20.4 million of free cash flow (FCF) in the last quarter. ISIL generates FCF in excess of earnings because they have non- cash charges on their income statement for amortization of purchased intangibles, equity based compensation, depreciation and, for the last quarter, a favorable change in net operating assets.
A Board can justify the payment of dividends even without earnings if there is sufficient FCF. Dowboy is wrong when he says ISIL is being liquidated. There is FCF to support the dividend and IMO the last quarter will mark the low quarter for FCF. So where as 75.5% of FCF was used to cover the dividend in Q1, that percentage will drop back towards 50% as operations improve.
The potential problem comes if FCF ever dropped below the dividend payment (currently 15.4 million). In that case I think the Board would be hard pressed depleting cash to pay the dividend because in that case they would be liquidating the company as dowboy says. However, the economy would have to go into a recession for that to even be a possibility. I don't think that is happening anytime soon. So I think the dividend is safe and with the dividend there is no way on earth the stock goes to "5 dollar".
As for the stock, it took the beatdown I figured it would take today. It bounced right off the 10 level as it has before. The stock has significant support at the 9.75 to 10 level. Like I said yesterday, I will be all ears on analyst day and if I don't hear something more encourging than I heard on the CC yesterday, I will be puting my ISIL money somewhare else.
isil go under 10 dollar today. mr bell screw shareholders and is freind of shorts. mr bell is complete loser. i feel sorry for isil shareholder who believe mr bell false hope. mr bell will run isil into ground. mr bell not qualified to lead boyscout group. mr bell promise 250 million dollar revenue in quarter 4 of 2011. now mr bell tell you revenue next quarter will be 160 million even after mr bell waste 500 milion dollar to buy china company. mr bell give you top 10 driver as false hope. one of top ten driver already failure. pico projector will be failure. eventually all top ten driver will be failure. when revenue drop there will not be enough cash to support dividend. when dividend gone stock collaspe to 5 dollar. isil crap. stay short isil.