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Biotech / Medical : PHP Healthcare
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To: Ontherise who wrote (27)5/2/1998 6:36:00 PM
From: Jim Mac   of 136
 
PHP has plenty of cash and borrowing ability to buy back 3M shares, and then a chunk of preferred. Jan Q balance sheet shows $24M cash, and $30M working capital. PHP just paid about $17M for Robbins' 1M shares, and if they borrow $34M to buy the rest, that will result in no more than $850K more interest per Q.

Remember, Jan Q interest expense of $3.4M included $1M - $1.5M of interest from the NationsBank senior credit facility which was paid off by the preferred in late Dec 97/Jan 98, so April Q interest should be back to previous levels of about $1.5M. Add back in $850K from intended borrowings for remaining 2M buyback, and it's clear PHP can EASILY afford to buy back the whole 3M shares, and then go after the preferred.

This will result in oustanding diluted shares remaining around 14-15M assuming preferred convert at $17 and debentures convert at $27. A very good deal, with minimal interest load, and good payback.
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