Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Bankruptcy Predictor Model -- Ignore unavailable to you. Want to Upgrade?

To: Razorbak who wrote (355)	5/23/1999 10:13:00 PM
From: Razorbak	Read Replies (2) \| Respond to of 477

Comments - KCS It looks like this one may be going down soon (see below). Just my opinion, of course. Razor KCS Energy, Inc. Enters Into Forbearance Agreements With Lenders biz.yahoo.com Tuesday May 18, 1:00 pm Eastern Time Company Press Release SOURCE: KCS Energy, Inc. HOUSTON, May 18 /PRNewswire/ -- KCS Energy, Inc. (NYSE: KCS - news) today announced that the Company has entered into forbearance agreements on each of its revolving bank credit agreements, which provide that the lenders will defer redetermination of the borrowing base until July 1, 1999 and will refrain from exercising their rights and remedies as a result of the existing defaults until June 30, 1999. Under the forbearance agreements, the Company will commit 50% of monthly cash flow to payments of principal, with a minimum of $2 million monthly. In addition, a portion of the proceeds from the sale of any of the Company's oil and gas properties will be dedicated to payment of principal under the facilities. When the forbearance agreements expire, the lenders will be able to exercise their rights under the credit agreements, including declaring the principal balances immediately due and payable. If this should occur, the Company would be unable to pay the amount due in cash, although the Company believes the lenders are fully secured; and the holders of the Company's senior notes and senior subordinated notes would have the right to declare the principal amount of the notes ($275 million) immediately due and payable. The lenders have indicated their intention following the termination of the forbearance period to reduce the Company's borrowing base under the credit agreements. Such a reduction in excess of principal repayments made under the forbearance agreements would necessitate additional repayment of principal, and these payments would have a negative impact on cash availability. As a result of these factors, there is substantial doubt about the Company's ability to continue as a going concern. KCS President and Chief Executive Officer James W. Christmas said, "Although the forbearance agreements are short in duration, they are supportive of the Company's desire to reduce its outstanding debt in an orderly fashion and continue to support current drilling activities and actively pursue new opportunities within our core operating areas." KCS is an independent energy company engaged in the acquisition, exploration, development and production of natural gas and crude oil with operations in the Mid-Continent, Onshore Gulf Coast, Gulf of Mexico and Rocky Mountains regions. To receive KCS' latest news and other corporate developments via fax at no cost, please call 1-800-PRO-INFO. Use company code KCS. See also frbinc.com. This press release contains forward-looking statements that involve a number of risks and uncertainties. Among the important factors that could cause actual results to differ materially from those indicated by such forward-looking statements are delays and difficulties in developing currently owned properties, the failure of exploratory drilling to result in commercial wells, delays due to the limited availability of drilling equipment and personnel, fluctuations in oil and gas prices, general economic conditions and the risk factors detailed from time to time in the Company's periodic reports and registration statements filed with the Securities and Exchange Commission. SOURCE: KCS Energy, Inc.

To: Razorbak who wrote (355)	8/16/1999 11:51:00 PM
From: Razorbak	Read Replies (1) \| Respond to of 477

KCS Energy Inc. (NYSE:KCS), Rev. 1 ------------------------------------------------------- Analysis: Altman Bankruptcy Predictor Company Name: KCS Energy, Inc. Ticker Symbol: NYSE:KCS Date of Analysis: 08/16/99 Conducted by: Samuel M. Williams Vice President Turnaround & Crisis Management, Inc. Two Mid America Plaza, Suite 714 Oakbrook Terrace, IL 60181 Tel: 630-990-9718 Fax: 630-990-9693 E-mail: sam@turnrnd.com turnrnd.com ------------------------------------------------------------------------------------- Financial Summary, US$ Millions (1) 12/31/97A 12/31/98A 03/31/99Q 06/30/99Q ------------------------------------------------------------------------------------- Working Capital, WC (12.36) (142.48) (138.35) (390.73) Retained Earnings, RE 4.01 (294.85) (296.77) (296.55) Earnings B4 Interest & Taxes, EBIT 37.12 23.81 31.78 40.14 Market Value of Equity, MVE 610.65 87.76 55.00 18.29 Book Value of Tot. Liab., BVTL 357.34 463.10 455.71 440.82 Total Sales, TS 143.69 129.45 132.02 133.42 Total Assets, TA 502.41 308.88 299.60 284.94 ------------------------------------------------------------------------------------- Altman's Financial Ratios 12/31/97A 12/31/98A 03/31/99Q 06/30/99Q ------------------------------------------------------------------------------------- X1 = WC/TA (0.02) (0.46) (0.46) (1.37) X2 = RE/TA 0.01 (0.95) (0.99) (1.04) X3 = EBIT/TA 0.07 0.08 0.11 0.14 X4 = MVE/BVTL 1.71 0.19 0.12 0.04 X5 = TS/TA 0.29 0.42 0.44 0.47 ------------------------------------------------------------------------------------- Bankruptcy Predictor Index, Z (2) 1.54 (1.10) (1.08) (2.14) ------------------------------------------------------------------------------------- Company Health Assessment (3,4,5) Near Near Near Near Death Death Death Death ------------------------------------------------------------------------------------- Footnotes: ---------- 1. Data obtained from the 12/31/98, the 03/31/99 10-Q, and the 6/30/99 10-Q. MVE was valued at $20.75/share, $3.00/share, $1.88/share, and $0.625/share on 12/31/97, 12/31/98, 03/31/99, and 06/30/99, respectively. EBIT & TS are annual figures from the 10-K, & quarterly figures from the 10-Qs multiplied times four for an annualized basis. 2. Bankruptcy Predictor Index: Z = (1.2X1)+(1.4X2)+(3.3X3)+(0.6X4)+(1.0*X5) 3. Company Health Assessment: Z > 3.0 = Strong 1.8 < Z < 3.0 = In Danger Z < 1.8 = Near Death 4. The Altman Bankruptcy Predictor is widely used in the turnaround industry to assess and predict a company's short-term survival prospects. The model is named after the renowned Edward I. Altman, Max L. Heine Professor of Finance at New York University's Stern School of Business, who published the initial research back in 1968. According to one scholarly journal, Altman's Bankruptcy Predictor has proven consistently accurate over the period of time since its development. The original samples in Altman's research displayed accuracy of 95 percent based on data from approximately one year prior to failure. The accuracy dropped to 72 percent based on two-year data. Subsequent tests on firms that have gone bankrupt since 1968 have shown an accuracy level of 82 to 85 percent. 5. CAUTION!!! This analysis should only be used as an analytical tool. While it can greatly assist an investor or stakeholder in identifying weak companies for further investigation, it should not be used to the exclusion of other types of experienced and informed personal evaluation techniques. Also, please remember that, when using the Bankruptcy Predictor Model, the recent trend is the most important indicator of future success or failure since companies' fortunes rarely turn on a dime.