Savvy Trades and Investments

[Swick984]

SIF - Posted solid earnings with Adjusted EBITDA of $3.4 million, operating at an annual run-rate of ~$14 million.

They are in process to sell their Italian operations for net proceeds of $15 million, which will reduce their debt position by roughly $25 million ($9.7 million of debt goes with the Italian operations in the sale). That will leave roughly $10-$12 million of debt on the balance sheet if all the proceeds are used to pay down debt. I expect that to be the case given their status with the current lenders. I would expect they should be able to refinance this amount with new lenders.

They have not disclosed financial information for the Italian operations, so unknown as to what portion of EBITDA will go away in the sale.

But with backlog near record highs, production rates for the 737 and 787 expected to increase next year, and the improved balance sheet, I’ve decided to add to my position here this morning. They also own their Cleveland facility outright, which is likely worth well above what it’s listed at on the balance sheet.

I will potentially add more once we get some clarity on the earnings going away as a result of the sale of the Italian operations.