EDAC, southacres- they've had nice sequential operating income growth with their ramping up in machinery and expansion. I think the borrowing is probably earmarked for more machining tools but it isn't specified. The buildup of inventories and decreased cash flows has had me a little cautious, but I was thinking they could do almost $0.20 this Q. With the bank line, it makes me wonder if they're still running at high capacity rates and wanting to continue to expand. Would be nice to see them get better with cash flows but doesn't appear to be the case just yet.
At least the loan is just basically mortgage on their property and at under 7.5% so not bad terms even for the shorter time duration (2012 due date). It is less expensive than borrowing against their line of credit IMO so makes sense from a $ standpoint as a shareholder.
The one negative I take from it is that they're putting out a filing with SEC but have not concurrently filed anything about record revs. So I think this boosts the chances that the Q won't be quite as good as some might be hoping. But we'll see, as stated earlier I don't find mgnmnt to be predictable (unfortunately).
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