BOPH...More DD notes...Next year's diluted EPS will go up nicely based just on the fact that BOPH will be paying off their convertable notes in January. Diluted share count should drop from approx 22.8M to approx 18M.
Listened to BOPH's FY2011 cc again and crunched some #'s. Here's what I came up with...
I'm convinced there will be no dilution and BOPH should easily be able to pay off thier $10.5M in convertable notes in January and pay $24M in acquisition installment payments by next August.
Here's how things break down on cash vs payments...
BOPH had $13M in cash as of 6/30/11.
Free cash flow in July should easily have been $2M.
That makes BOPH's cash total at the end of July 2011 $15M.
Acquisition was made in August. $6M paid for 1st installment payment on acquisition. Cash now at $9M (before adding Augusts cash flow).
(It was said in the cc that after the acquisition, monthly free cash flow would be $3M+).
So $3M x 5 months (Aug - Dec) = $15M. This puts BOPH's cash total @ $24M at Y/E 2011.
First week in Jan 2012, BOPH pays off convertable notes @ $10.5M leaving cash levels at $13.5M. Add January's cash flow of $3M to that and cash is @ $16.5M.
BOPH then pays 2nd acquisition installment payment of $12M putting cash @ $4.5M.
Feb - July will bring in another $18M putting cash levels at $22.5M making it easy for Bohai to make the 3rd intallment payment of $12M in Auguest and still have over $10M in cash on hand.
Aug - Dec will bring in another $15M in cash putting Y/E 1012 cash total @ $25M.
BOPH can now make the 4th and FINAL acquisition installment payment of $5M which is due Jan 2013 leaving them with over $20M in cash owing $0.00 on acquisition & convertable notes.
After making $39.5M in payments, BOPH should still have OVER $1 per share in cash by the end of next year, w/ little to NO debt. Current share price is $0.85.
All just my opinion.
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