LT;
<<I'm getting nasty rumors that RDRT is up against the wall getting additional financing and is or will be in default on all of it's bank covenants.
Tell me something to stay the course with my RDRT investment>>
Wrestling with my cold woke me up tonight. Finally gave up and decided to check the threads while I wait for the NyQuil I just took to work its magic. Here is what I know: RDRT announced its renegotiated bank lines around mid August which, resulted in a revolving line of credit that had been $150M being reduced to a $100M secured facility. At the end of June the company had approx $150M in cash.
In the last qtr the company lost $140M including one time charge offs of $92m or so. This was against revenues of $185M with COS of $199M, and opex of $125.6M. They expected an additional $52M in cap ex this qtr and $16.5M in write-offs associated with the Malaysia plant closure.
They have announced the new qual at WDC on the 3.4 earlier this month and were already shipping Maxtor's and Samsung's latest programs. We know that unit demand is undergoing a seasonal spike. So shipments ought to be up, yes? With $250M in cash and credit facility, and reasonable expectations for lower write offs, opex, and cap ex, this quarter, against increased shipments, I just do not see them running out of money this quarter or defaulting on loan codigals.
Last quarter RDRT warned on June 10. If they expected to fall short of the expected .65 in losses this quarter I would think they would have warned by now. To be honest I am expecting them to beat that by .12 or so and lose approximately .53 per share.
Best,
Stitch |
