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Synaptics Inc. Message Board

mcmacdaddyjack 339 posts  |  Last Activity: Sep 5, 2013 11:24 AM Member since: Jan 16, 2007
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  • http://finance.yahoo.com/q/bc?s=HIL&t=5y&l=on&z=l&q=l&c=^GSPC

  • Reply to

    Resistance to $3 is very strong.

    by dolcstavg May 28, 2013 12:05 PM
    mcmacdaddyjack mcmacdaddyjack Jun 25, 2013 3:46 PM Flag

    Not even close to three anymore, fading away.

  • Reply to

    Whithering on the vine?

    by networth00 Nov 13, 2012 9:59 AM
    mcmacdaddyjack mcmacdaddyjack Nov 13, 2012 4:20 PM Flag

    All those things are true but the capital structure is a concern, they are highly leveraged and they said as much in the conference call. I can see why they don't want to dilute the equity holders but the debt-heavy capital structure is very costly and will be a huge headwind. Without all the expensive debt they would be in much better shape but HIL just doesn't have the strong cash flow required to carry this much in finance costs and still maintain a decent net margin. I'm not sure where this goes from here, if they actually get money from Libya it would help but the debt is a serious issue, I don't know how they overcome their cost of capital. No shareholder likes to see dilution through new equity but at some point if the cost of borrowing becomes too high it's the prudent thing to do. It's unusual for a service company that doesn't have to make huge investments in plant and equipment to have this much debt. A lot of it was bad luck, acquisition costs right before a slowing economy coupled with non-payment on a huge receivable. Hopefully they know something about the TRAC deal or another huge pending deal that we don't because it's going to take a big windfall from somewhere to get the debt monster under control. Otherwise, HIL will just be a highly indebted company squeaking out (hopefully) a tiny net profit after finance costs. The big finance costs weigh heavily on the earnings and the earnings drive the multiple and the multiple drives the stock price.

  • Reply to

    Problem with lenders solved.

    by dolcstavg Oct 18, 2012 4:55 PM
    mcmacdaddyjack mcmacdaddyjack Nov 6, 2012 6:50 PM Flag

    Just looked at the numbers from the quarter when they came out. They made a profit which is a good thing but the costs of financing are eating up most of the profit. For this quarter and the first nine months of the year look at the interest expense and financing fees compared to 2011.

    The Libya non-payment really set off a chain reaction of credit troubles that have been very expensive to deal with. It will be interesting to see what they say tomorrow. I'm glad they made a profit but the amount of and cost of debt is really weighing this company down to the point where it will be very difficult to achieve any kind of decent profit margin after the loan-sharks take their cut. Very expensive capital structure with all this high priced debt, a Libyan or Iraq miracle would be very helpful right about now ;)

  • Reply to

    Problem with lenders solved.

    by dolcstavg Oct 18, 2012 4:55 PM
    mcmacdaddyjack mcmacdaddyjack Oct 22, 2012 3:06 PM Flag

    Hard to say without knowing the details, they are taking on more debt and that costs money. It should buy them time, I hope the terms are such that they don't run afoul of the covenants on the secondary credit line like they did with the first one. Seems like it could be good news but we will have to see what the specifics are in the conference call. The announcement didn't seem to lift the stock price.......the opposite happened but it was a very bad market day so it's hard to say what part of the drop was the announcement. It looks like a lot of holders are getting skittish and selling into earnings. We will see what they have to say.

  • Reply to

    earnings

    by odeon778 Oct 5, 2012 10:01 AM
    mcmacdaddyjack mcmacdaddyjack Oct 9, 2012 3:48 PM Flag

    Smart money seems to be picking off small sellers at low prices early in day and buying in larger quantities later in day. This has been the trend since it broke through $4, volumes have picked up from where they were most days below $4. There seems to be a little more confidence on the company lately, we will see if the quarterly report justifies the confidence or turns investors away again, it's a precarious, touch-and-go situation with a lot of unknowns right now. It wouldn't take many positive developments to push this into the $5 - $6 range where the company traditionally traded prior to the Iraq announcement and the bursting of that bubble/lender troubles.

  • Reply to

    earnings

    by odeon778 Oct 5, 2012 10:01 AM
    mcmacdaddyjack mcmacdaddyjack Oct 9, 2012 12:03 PM Flag

    It looks like some of the small holders don't want to hold into earnings because it's dropping but on low volume. It's a good sign that the gains have been on higher volume than the drops, it could indicate smaller investors trading out with larger investors who are accumulating the stock. The again it could mean nothing. Nice contract today in SA, hopefully it will remain stable enough that that HIL's work there will get completed and they will get paid. If they could land a big housing contract for HillStone in SA it could be a game changer. The Saudi's have the money and they seem to want to attempt to appease their citizens with quality of life improvements like housing and hospitals. We shall see what the quarter will bring, hopefully the reaper will not cometh to the doorstep :)

  • Reply to

    Libya in turmoil again.

    by mcmacdaddyjack Sep 13, 2012 12:18 PM
    mcmacdaddyjack mcmacdaddyjack Sep 27, 2012 6:08 PM Flag

    It has been going higher and it can go much higher but something has to happen with the lenders, Libya or Iraq to really get it going. If none of those things happen we will have to look at the next quarter and see if the core of the operation has improved. They have a lot of business, if they can can start converting contracts to cash, be profitable, establish positive free cash flow from operations and start paying down the debt they company should do OK without Libya and Iraq. If they can't turn it around and the lenders don't give them some breathing room I don't see how it can even hold these levels. If anything good happens the small float can cause rapid upward movements if there is a quick rise in demand. Good luck, this one could be a real winner or it could end up bankrupt......hard to tell one way or another.

  • mcmacdaddyjack by mcmacdaddyjack Sep 13, 2012 12:18 PM Flag

    I think the already long odds of collecting any money from Libya just got a lot worse. That is a dangerous, messed up place. On the plus side HIL got a contract for freeway engineering and project management in NJ. I like it when they get contracts in stable places where the contracts are likely to run to completion and be paid. The fundamentalist Islamic uprising has not been kind to HIL and I don't see many of these places becoming more stable anytime soon.

  • mcmacdaddyjack by mcmacdaddyjack Aug 21, 2012 11:30 AM Flag

    Man it got silent. A couple of nice new contracts in the future, waiting on the word of a resolution with the lenders. Had a nice rise on high volume the other day and it seems to be holding up. Could something good actually happen for HIL.....stay tuned.

  • mcmacdaddyjack by mcmacdaddyjack Aug 8, 2012 6:49 PM Flag

    Here's what I saw;

    HIL is still a risky play because of the cash issues but I'm actually more optimistic than I was before even though the call didn't say much. I see some potential catalysts for the stock.

    One, they are still in default with the lenders but everybody already knew this so it's been priced in for awhile now. If they actually negotiate a longer term deal with the banks to solve the short-term liquidity issues this would be a plus. An announcement of such a deal would probably send the stock higher. They expect this within the next 30 days but who knows.

    Two, The Iraq deal sounds like it won't happen but, again, everybody already pretty much knows this and it's priced in. If for some reason the deal actually got financed it would be a huge plus with a large jump in the stock price. I don't think it will happen but at this point the failure of the deal can't hurt the stock price anymore but a deal would be huge.

    Three, the money from Libya is not coming anytime soon if at all but I think that is also priced in at this point. Again, at this point if they recover anything it should be a plus because nobody (except the management team) actually expects it to happen. I could tell by the one question that at least one of the analysts has pretty much thrown in the towel on Libya and Iraq already even though the company guys keep trying to make the Libyan money sound like a certainty. At this point if they don't know how much (if any) they will recover or when it will get paid the money is of no help to HIL in the cash-critical short-term.

    They seem to be making some progress on the cost/earnings side and actually beat an earnings estimate so that is something. I think the IRAQ deal is dead and the Libyan money is not likely to be paid in full anytime soon but I think if they can make a reasonable deal with the banks to smooth out their cash flow HIL may be able to get the company stabilized and profitable without Libya and Iraq and move forward. There is still a decent business with good potential in there somewhere that's worth north of $6 - $8 eventually if they get a deal with the banks and return to profitability.

    There is still risk and I think the possibility of huge upside from the Iraq deal is gone now but I am less concerned that they are going to blow up the company. Nobody expects much from these guys so any good news should help. If they get a deal with the banks, officially throw in the towel on Iraq and write down the Libya money the uncertainty will be removed and they can move on. They will have a weaker balance sheet than they did back a few years ago but they should live to fight another day and rebuild.

  • Reply to

    Fastest growing company? Seriously?

    by odeon778 Aug 2, 2012 4:26 PM
    mcmacdaddyjack mcmacdaddyjack Aug 2, 2012 9:29 PM Flag

    Growing fast and growing profitably are not the same thing, HIL is having a lot of growing pains that never seem to end. I hope they don't drop another stinking turd on the floor Monday like they did last quarter. I'm almost scared to see the earnings and listen to the conference call. Just when you think they can't do any worse.......well, you know the rest. They need to turn it around now, they are running out of time to get their act together.

  • Reply to

    libya

    by z.james37 Jun 14, 2012 1:28 AM
    mcmacdaddyjack mcmacdaddyjack Jul 31, 2012 8:20 PM Flag

    Or;

    If you owe the bank a million dollars you have a problem, if you owe the bank a billion dollars the bank has a problem :)

  • Reply to

    libya

    by z.james37 Jun 14, 2012 1:28 AM
    mcmacdaddyjack mcmacdaddyjack Jul 28, 2012 11:51 AM Flag

    Donald Trump is buying HIL! :)

  • Reply to

    libya

    by z.james37 Jun 14, 2012 1:28 AM
    mcmacdaddyjack mcmacdaddyjack Jul 24, 2012 10:46 AM Flag

    It's good that the Turks will get half of their money, the article doesn't say anything about the rest of it. I haven't seen an article like this that talks about American contractors. Unfortunately, finance costs because of HIL's defaults will eat up some part of the Libya money even if they get paid. At this point HIL management needs to assume that they will not be paid and show us a plan to survive and move forward without this money. They failed to control non-payment risk and have endangered the foundation of the company, it's time to talk about how they go forward from here if that's even possible. These guys have screwed up huge, it would be helpful to get paid all or some of the money but from here they need to assume that's not going to happen. I'm tired of hearing about what they think might happen next quarter (it's always next quarter). I want to hear about what they are doing to get the house in order and move recover from their mistakes.

  • Reply to

    HIL = WINNING

    by futristic Jun 30, 2012 2:15 PM
    mcmacdaddyjack mcmacdaddyjack Jul 15, 2012 12:00 PM Flag

    I'm not sure how you can even value HIL, we don't know the extent of the trouble with the banks. Last CC they said they were in default again but they didn't provide many specifics regarding how much contunued access to credit was going to cost them.

    It's hard to make a case that HIL is worth $5 as/is if Libya doesn't pay. A big part of the balance sheet is receivables and we don't know what part of that number will ever be collected and when. They have no earnings and their balance sheet is in decline.

    $15 a share would require full payment from Libya and the guaranteed funding of the Trac deal in Iraq with certainty of payment to HIL, possibly another major contract as well. $15+ is possible if the HillStone concept started to bring in major contracts (that get started, completed and paid) but this is not happening so far.

    HIL has potential but right now the continued solvency of this company is not assured. You may be overestimating the current fair value and upside without looking hard enough at the downside risk. We will know more on August 6th but I don't expect much, this company is struggling. Without the payment from Libya they will have a very long road ahead of them because the lenders will be in charge.

    I have to disagree with you and say that the risk/reward profile is becoming less attractive all the time as their short-term cash troubles mount. HIL's current situation is a textbook example of how many small companies have bitten the dust, they got overextended and ran out of cash. I hope HIL makes it big but I'm having trouble being optimistic based on what I am seeing rather than what the management team is saying.

  • Reply to

    HIL = WINNING

    by futristic Jun 30, 2012 2:15 PM
    mcmacdaddyjack mcmacdaddyjack Jul 6, 2012 11:38 PM Flag

    You have a point and total non-payment is certainly a possibility; that's exactly what has happened so far. I hope that HIL will survive this lesson and learn from it. They do so much work in hostile places that this same problem may come up again.

    We'll see what they say in the next report but it would seem to me that every quarter that they don't get paid makes it more likely that they never will get paid. I no longer believe anything the management at HIL says in reference to expected positive future developments. Success is always one quarter away.

  • Reply to

    HIL = WINNING

    by futristic Jun 30, 2012 2:15 PM
    mcmacdaddyjack mcmacdaddyjack Jul 6, 2012 6:51 AM Flag

    If HIL got any payments from Libya I'm not sure that we will know about it until the earnings are released. I don't know if that's the sort of thing that would generate a separate press release because it's the normal course of business. Companies are supposed to get paid for the work that they do.

    Having said that I would not be surprised if they didn't get paid anything and say that they expect the payment in the next quarter. They can kick the can on Libya and the Iraq project down the road for a long time as we've been seeing for several quarters already. They keep expecting things to happen that don't happen which leads me to believe that they are just guessing and sounding more optimistic than is actually warranted. We will see in a few weeks.

  • Reply to

    HIL = WINNING

    by futristic Jun 30, 2012 2:15 PM
    mcmacdaddyjack mcmacdaddyjack Jul 1, 2012 4:35 PM Flag

    The company has plenty of potential and the stock has plenty of upside but it didn't go down accidentally and it won't go up accidentally either. If the company can generate earnings, positive cash flow without borrowing, get the balance sheet headed in the right direction and get out of hot water with the lenders it's off to the races.

    I have no idea if they can make these things happen or not but the news last quarter was awful, those kind of results can't continue for long with a company this size or it will be game over. They have some very serious problems at present and that's no joke. The price isn't low enough to justify the risk at these levels. I would rather buy at $5 if they get their act together and take the upside from there than buy at $3 and watch it drop to under $1 when the banks force their hand.

  • Reply to

    libya

    by z.james37 Jun 14, 2012 1:28 AM
    mcmacdaddyjack mcmacdaddyjack Jun 27, 2012 2:46 PM Flag

    Well there you have it, if HIL can just get enough VP's they can turn the company around.

SYNA
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