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AIQ - Alliance Healthcare


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  • 1 month later...
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AIQ had an OK quarter but today was able to refinance the term debt and save $10 million in interest expense.  Was disappointed in gap analysis but the re-fi was good news (they lowered the term debt from 7.25% to 4.5% per year on $360 million of debt).  So the estimated FCF this year will range from $35 to $45 million.

 

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  • 3 weeks later...

I know they have been giving presentations at conferences.  You can see them on their websites.  In addition, a VIC write-up just became available today.  As for the move, I don't know the specifics but AIQ is still at 4.4x EBITDA versus 5.8x for RDNT and 7.0x for  industry take out multiples.  Given the amount of debt, the upside to RDNT's multiple is 131% and to industry take out multiple is 245%. 

 

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  • 2 months later...

It looks like he ran CDI a large MRI company in the Midwest a few years ago and left when Onex sold to another buyer.  I am trying to see what in his background would help Alliance Healthcare and I am left wanting.  Does anyone else see something?

 

The revenue is down but at least they have increased the revenue "gap" to positive and the EBITDA trends are good.  I think these guys should benefit from the AHA. 

 

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  • 3 weeks later...

I saw one SA article questioning the run up in price.  Now the price is about were it was before the 2011 crash in price.  It is close to fairly valued if there is no further growth.  However with some of the changes they have made there may be more upside.

 

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  • 1 month later...

I wonder how much interest saving they can get from this?

Alliance HealthCare Services, Inc. (the "Company") is seeking, subject to market and other conditions, commitments from its existing lenders for a $70 million partial exercise of the incremental term loan facility under its existing senior secured credit agreement (the "Credit Agreement"). The Company intends to use the net proceeds from the borrowings under the incremental term loan facility, together with borrowings under its revolving credit facility and cash on hand, to redeem all of its outstanding 8.0% Senior Notes due 2016 (the "Notes") in December 2013.

http://biz.yahoo.com/e/131004/aiq8-k.html

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The answer is 5 million!

Howard Aihara, executive vice president and chief financial officer, stated, “Our ability to raise $70 million of incremental borrowings under our existing senior secured term loan highlights the ongoing improvement in our business performance and the strength of our balance sheet. The redemption of our 8% Senior Notes will save us approximately $5 million annually and will provide additional flexibility and cash flow to execute upon our strategic initiatives, including ongoing reduction of our debt.”

http://finance.yahoo.com/news/alliance-healthcare-services-announces-receipt-133000898.html

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  • 3 weeks later...

Q3 results out.

http://finance.yahoo.com/news/alliance-healthcare-services-reports-third-220000531.html

Adjusted EBITDA increased by 3% over the prior year, representing the sixth consecutive quarter of organic Adjusted EBITDA growth (1)

• Same store volume growth was 1.2% for MRI and 1.6% for PET/CT in the third quarter of 2013 compared to the third quarter of 2012

• Alliance generated net income per share of $0.41, after excluding loss on extinguishment of debt, impairment charges, restructuring and transaction costs, and differences in the GAAP income tax rate compared to our historical income tax rate. Earnings per share in accordance with GAAP was ($0.19) per share.

• Continued to generate strong cash flow, with $43.3 million reduction in net debt in the last twelve month period (2)

• Raised incremental term loan proceeds of $70.0 million in October 2013 which allows the Company to redeem the remaining balance on the 8% senior notes. The transaction will save the Company an additional $5 million annually in cash interest expense beginning in December 2013.

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Another nice quarter (3% annualized EBITDA growth).  Not a blockbuster but with all the refis they have gotten TTM free cash flow up to $56 million or $5.30 per share.  A 23% FCF yield at today's prices and only selling for 5x EBITDA.  A pretty good deal in today's market with Mr. Marks as your controlling shareholder.

 

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  • 3 weeks later...

Packer, do you by chance know if the long term contracts AIQ has with the hospitals / health service providers prevent the company from raising the service fees --   

 

In Canada, as you know, the prices are set by the government I believe...  Wondering what it's like in the US.

 

I am trying to find out that if inflation kicks in - yes, many says won't happen - but if it does, I wonder what would happen to AIQ...

 

Thanks!

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