Scottrade has an article by Financial News Network Online stating that ASTC has the highest debt to EBITDA ratio in the Aerospace and Defense Industry. The ratio is reportedly 107.4. It states that a ratio above 3.0 should be alarming. Should we be alarmed or is this immaterial?
The fact that was still a positive EBITDA, over the last year I presume, is a good thing but it was obviously small enough (i.e. close to breakeven) to generate that high number. What the article is basically saying is the company is not making much money at the moment but that is not exactly news to us and is one of those automatically computer generated articles they pump out, most of them report how low the stock price is to book value for astrotech. The company does not have a problem making its interest payments on its debt which is relatively low (~$5.8m). IMSC's debt for instance is 5 times higher and has never had a positive EBITDA and is not likely to either so they have bigger problems.