Joe,
it seems that you didn't examine the PR carefully ? They had a PROFITABLE quarter from operations even without the asset sales.
Loom at this - QUARTERLY
EBITDA Extraordinary : Asset Sales $4.7m + Book Value
Extraordinary reorg items : -$1.4m
EBITDA from Operations: $6m + $4.3m = $10m
Depreciation Amortization : $-4.3m
Interest expense : $6.7m
Now if you carefully read the PR then you will see that NO asse sale since October were included in the quarterly. Not the at least $34m from the Sidney & Torrington refinery sales and neither the $115m sale from the Hormel deal. Together this should provide the company with $150m pretax. It's no coincidence that IPSU did the major restructuring at this moment (closing Texas refinery plant, apparently its least efficient operation) because this will provide some nonecash charges to inventory and equipment & plants. Since the taxloss carryforwards are gone by now, the company would have otherwise needed to pay big tax items from the most recent gains on asset sales. In this way, it's no longer necessary, at least not from the full $150m. My private guesstimate is that DCB (sold to Hormel) was on the books with around $35m, the Sidney and Torrington plants with $1m (the asset purchase agreement calls for $34m + Book value so the latter can't be that high). Closure and reorg costs for Texas Sugar Land maybe $25m, maybe some raw material sold with the operations sold too (In Process Raw & Intermediate Inventory) $10m, $5m special items. Should sum up to $75, roughly half of the $150m that Imperial should receive from the asset sales. I think tax from the deals to be around $30m unless the company comes up up with further restructuring initiatives at the same time.
Anyway, longterm debt should decrase by some $120m and the term note should be paid off totally. Future interest payments are less than $2m per quarter (instead of $6m now). Summing up, a great quarter but the real achievement IMHO is what is NOT included in the 10-K - which will inevitably have to show up inthe upcoming 10Q. I still stand by my estimate of future book value of around $13. The upcoming 10Q is due this January..
For the quarters beyond the current 10Q I assume that IPSU will be able to post the following numbers
Sales of $300m (DCB had annual sales of $100m, sugar capicity not fully utilized historically)
COG Sold (92%) $-276m (DCB was high-margin, asset sale improves efficiency for rest, I take same number as this Q)
Gross MArgin (9%) $24m
SG&A Costs $-15m
EBITDA $+9m
Deprec. & amort $-3m
EBIT $+6m
Interest $-2m
EBT $+4m
Taxes $-1.6m
Earnings $+2.4m
EPS $0.24
all the best
CROSSY |
