So - what exactly did you like about the earnings and guidance - it is not just the fx headwinds - the whole business is under severe pressure as most business metrics are showing signifcant deceleration
so - what's exactly positive ? The retirment of the CEO or the warning of lower gross margins ?
In fact they will have to share the revenues from those east cost installations as Centrosolar won't perform their work for free I guess. And while RGSE will get at least SOME cash out of these contracts when finished they will lose even more money on each contract by using a third party installer.
Actually they are hiring Centrosolar to do the work they can't perform because they have no money and no supplies. Effectively they are passing their east coast backlog to Centrosolar in order to bill customers sooner to take in cash.
Given that their contracts are already net margin negative on a standalone base the money they will have to pay to Centrosolar will further weaken the earnings "power" of the company.
So what exactly does this mean to you "The company needs to, and intends to, raise additional financing to (i) position the company to convert its backlog, which as of February 12, 2015 is approximately $55 million and (ii) best position the company to renew its line-of-credit under favorable terms for the ensuing year. "
The release contains material new information which the company is obliged to disclose:
- suppliers refuse to do business with RGSE
- cash down to $1 mln
- capital injection needed asap to stay in business
- Sunetric issues
Effectively the release is saying: "we need plenty of cash within the next few days or maybe weeks otherwise we will have to file for chapter 11 soon".
For current shareholders it really doesn't matter what happens. Fresh money would dilute them beyond recognition this time while chapter 11 would wipe them out anyway. So the best move for investors is still to sell the shares here in order to get at least a few cents.
$10 mln would be pretty high, even $5 mln looks illusive here. They should file for bankruptcy and at least pay their creditors.
Sure - they might restructure the loans but this will most likely happen using a pre-packaged chapter 11 proceeding. But given the latest numbers I don't think there's any chance for the company to come back. Anyway shareholders will get nothing or if they are very lucky 5% of the restructured company.
they could rather pick some assets out of bankruptcy but I doubt there's anything of value. I wonder how much of the backlog really makes a positive contribution to cash flows. My guess is very little as the company has always lost money on its installations.
yeah - I guess especially encouraging was the part where the company discloses that they " experienced difficulty obtaining payment terms from certain equipment suppliers and other third parties which has impacted the company's ability to convert its backlog of signed contracts into revenue".
Cash has been cut in half to $1 mln since then and effectively the company is just days away from filing for bankruptcy.
You are wrong - look at the long list of retailers which have filed for bankruptcy as of late. Creditors rather take the beating instead of betting on a recovery that never happens. Given the revenue shortfall in Q4 it is quite clear that the current company has no future. Someone will pay something for the brands in the soon to be filed bankruptcy case and inventory will be liquidated just like all the others have done as of late, Shareholders will get nothing as usual.
this is dumber than dumb...management is outright saying that they will RAISE new capital and substantially dilute current shareholders
But I would still advice to stay on the sidelines until the convertible issue has been finally resolved. I would expect to hear about that in the Q4 earnings announcement and I now firmly expect the company to redeem the rest of the bond in cash at the due date.
I still think that current earnings expectations are way too high for Q4 but Q1 and Q2 might show better results finally. Should the company announce to redeem the convert in cash with a healthy cash cushion remaining on the balance sheet I would expect this news to overcome a sizeable earnings disappointment.
Investors willing to take a sizeable amount of risk might decide to put some money to work here but everyone else should wait until the company announces Q4 earnings.
Given management's overly optimistic projections for the syngas project I don't see much reason to believe in their forecasting.
this is outright dumb as today's news makes it painfully clear that even contracts once mutually agreed upon are NOT safe anymore in light of current market conditions. The recent DO earnings conference call already made it quite clear that customers will re-negotiate down existing contracts or outright cancel them. Seadrill is experiencing the same issues so future revenues and cash flows are going to be severely affected. The remaining $19 bln backlog will continue to come down over time not just by work being performed but also by cancellations and price concessions on existing contracts.
Decidedly positive this time. While the very slight discount already reflects market expectations for a full redemption of the convert it is interesting to see that they did not try to do another debt-for-equity-swap.
The open market buyback also signals that the company will redeem the bond in full when it matures in April. Given the current market price of the bond it looks doubtful that the remaining holders would accept any kind of equity swap so most likely there WON'T be any further dilution from this issue.