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TWC netted approx. 20% or $2.4MM to EBIDTA.

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mevans2222 Member Profile mevans2222  
Thursday, April 26, 2012 4:17:27 PM
Re: dav1234 post# 28 Post # of 80 
TWC netted approx. 20% or $2.4MM to EBIDTA. 20 or so staff are directly connected to that contract which will possibly be non-renewed effective 1/1/13. Will it be extended? We'll see. For TWC to simply replace the service may or may not be all that easy and they had not one complaint all that time; OTT was uber reliable. So, lay off 20 utility co. workers ( say $50K per year, benefits?... that's $1MM) we have a net loss of $1.4MM to EBIDA but no dividend as of now that retains some $9.3MM in cash. Sure, I wish I was still going to get that payment but let's say,a $0.97 interest payment supports what as a share price? At 12% that is an $8/sh price which equals the callable $7.50 bond x 1.06 premium. There are more cost cuts available by the final termination of the contract: autos, attendant insurance, fuel, assorted whatnot. The one great risk I see is the availability of refinancing but that was on the table long before the potential loss of the TWC contract and the smart money supported the $12 price as recent as 7 days ago. IMHO the question is how much of an overraction was had here.


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