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Technology Stocks : Source Media SRCM -- Ignore unavailable to you. Want to Upgrade?

To: Kevin Podsiadlik who wrote (1622)	11/15/1998 12:39:00 PM
From: Pluvia	Read Replies (1) \| Respond to of 3015

<<<Check the "accrued interest" category, it keeps bouncing between $2M and $5M quarter over quarter. This quarter it is back up to $5M. I think that more or less accounts for the difference. Just $3M of future cash burn if you ask me.>>> I think you might be right, I spent a bunch of time sniffing around this last night because it did not seem quite right.... If you go back to Q1 CONSOLIDATED STATEMENTS OF CASH FLOWS, you will notice they have broken down "Other accrued liabilities" and "Trade accounts payable," and the combination of the two have pretty significant Quarter over Quarter fluctuations (Q1 large Q2 small Q3 large). With a large amount in these categories in Q1, it was not carried into a larger operating capital burn rate in Q2, thus I suspect that the bulk of the money in this category is the approximate $12 million annual interest on the 100 million notes and perhaps some accrual on the PIK preferred interest stock dividend - however they might be valuing that. So instead of coming out of operating capital and the closely watched working capital burn rate, it looks like it comes out of the funds escrowed for interest payments. If this is the case I find it curious they dont accrue an equal amount every Q? Unfortunately the notes to the financials sux, and much of this is over my limited accounting knowledge, so I'm not the best guy to make this evaluation. One last point. After looking at Nevada's evaluation of burn rate where he suggested the company would be dead by Marchish '99, I think he might have included the cash burn attributed to interest payments (which should be taken from the escrowed cash), but instead took it out of the available operating capital of $13.6. I think using his calulation of cash burn he should be using the compbined escrowed cash and working capital cash instead of just the working capital cash. The bottom line - I think we still might be looking at 4Q's - or the end of '99 till they run out of cash, not March (I'm rather sad to report). Maybe someone with a good understanding of accounting and SRCM's cash situation could help out here... All comments IMO Cheers Steve