Replies to post #40978 on Savvy Trades and Investments

[bbotcs]

r59: SQBG

A validation of my rule to try to avoid small companies that have a lot of debt. One false step and they can get into very serious trouble.

I especially like companies that have a ton of cash and no debt because they have done a big, splashy IPO. I think FB would be a good example of that.

[abh3vt]

Thanks for that info on ICON. Relative to SQBG, its LT debt payment schedule doesn't ramp up significantly until 4-5 years from now.

Here is the relevant info from the 10K:

 
  
 Payments Due by Period	  
 Contractual Obligations	 	Total	 	 	Less than 1 
 Year	 	 	2-3 Years	 	 	4-5 Years	 	 	After 5 
 Years	  
  	 	(in thousands)	  
  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	  
 Operating leases	 	$	13,443	 	 	$	7,390	 	 	$	2,367	 	 	$	1,583	 	 	$	2,103	  
 Capital leases	 	 	230	 	 	 	230	 	 	 	-	 	 	 	-	 	 	 	-	  
 Guaranteed payments in connection with acquisitions	 	 	12,002	 	 	 	4,300	 	 	 	6,500	 	 	 	1,202	 	 	 	-	  
 Long-term debt obligations:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	  
 2016 Term Loans	 	 	582,500	 	 	 	28,300	 	 	 	56,600	 	 	 	124,100	 	 	 	373,500	  
 2016 Revolving Loan	 	 	80,500	 	 	 	-	 	 	 	-	 	 	 	80,500	 	 	 	-	  
 Total	 	$	688,675	 	 	$	40,220	 	 	$	65,467	 	 	$	207,385	 	 	$	375,603	  
  
  
  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	  
  	  
  
 

They do have some time to figure out how to extend/refinance the debt, but your warning is well taken, and the market has spoken quite loudly that it would be wise to weigh this concern heavily.