zippy1 Posted May 3, 2014 Share Posted May 3, 2014 that is interesting he is retiring and the company is not replacing that position anytime soon -- is this the corporate way of saying he is fired? Not sure it is that negative. Tomlinson was hired to be CEO Last July replacing Larry Buckelew, who is still Chairman. I guess Shea was passed over at that point?! Link to comment Share on other sites More sharing options...
xtreeq Posted May 5, 2014 Share Posted May 5, 2014 Alliance HealthCare Services Expands Its Technology Services with the Asset Acquisition of OnPoint Medical Diagnostics http://investors.alliancehealthcareservices-us.com/phoenix.zhtml?c=129994&p=irol-newsArticle&ID=1927111&highlight= An asset deal with a bankrupt start-up (4 employees) selling SaaS MRI QC/QA based on some Mayo Clinic technology: http://www.bizjournals.com/twincities/blog/in_private/2014/03/edina-startup-licensing-mayo-clinic-technology.html Given that MRI is 42% of revenue and that MRIs per day have dropped slightly YoY (from 8.46 to 8.4), here is to hoping this both improves MRI utilisation (perhaps they will be able to clone this for PET/CT as well?!?) and reduces expenses somewhat ... Link to comment Share on other sites More sharing options...
zippy1 Posted May 7, 2014 Share Posted May 7, 2014 Q1 result http://finance.yahoo.com/news/alliance-healthcare-services-reports-results-200000038.html First Quarter 2014 Highlights • Delivered $33.0 million of Adjusted EBITDA (as defined below), representing consistent results with prior year, when adjusted for one-time items in the first quarter of 2013, and planned investments outlined below. • Continued to generate strong cash flow, with $9.4 million reduction in net debt in the first quarter of 2014. • Oncology Division revenue grew by 13% in the first quarter of 2014, to $20.7 million, from $18.4 million in the first quarter of 2013. • Generated Adjusted Net Income Per Share (as defined below) of $0.28. Link to comment Share on other sites More sharing options...
plato1976 Posted May 8, 2014 Share Posted May 8, 2014 less than 50% upside to the fair value now - consider selling... Q1 result http://finance.yahoo.com/news/alliance-healthcare-services-reports-results-200000038.html First Quarter 2014 Highlights • Delivered $33.0 million of Adjusted EBITDA (as defined below), representing consistent results with prior year, when adjusted for one-time items in the first quarter of 2013, and planned investments outlined below. • Continued to generate strong cash flow, with $9.4 million reduction in net debt in the first quarter of 2014. • Oncology Division revenue grew by 13% in the first quarter of 2014, to $20.7 million, from $18.4 million in the first quarter of 2013. • Generated Adjusted Net Income Per Share (as defined below) of $0.28. Link to comment Share on other sites More sharing options...
gary17 Posted May 24, 2014 Share Posted May 24, 2014 Hello I'm wondering if anyone has any particular thoughts on AIQ 's equipment depreciation... They lump it with amortization ... Maintenance cap ex according to their recent UBS conference is $30M this year ($22 - 32m for growth ) ... Looking at their balance sheet they noted equipment at 824M at cost but 170m net ... The difference being the accumulated depreciation... Does this suggest that their equipment actually has a pretty long life , greater than that assumed by the depreciation calcs? When we look at return on asset do we look at equipment at net or at cost? Thanks Equipment Equipment is stated at cost and is depreciated using the straight-line method over an initial estimated life of three to 10 years to an estimated residual value, between five and 10 percent of original cost. If the Company continues to operate the equipment beyond its initial estimated life, the residual value is then depreciated to a nominal salvage value over 1.5 to 3 years. Routine maintenance and repairs are charged to expense as incurred. Major repairs and purchased software and hardware upgrades, which extend the life of or add value to the equipment, are capitalized and depreciated over the remaining useful life. With the exception of a relatively small dollar amount of office furniture, office equipment, computer equipment, software and leasehold improvements, substantially all of the property owned by the Company relates to diagnostic imaging and radiation oncology equipment, power units and mobile trailers used in the business. Link to comment Share on other sites More sharing options...
LanceSanity Posted June 18, 2014 Share Posted June 18, 2014 Was there any change in the story to justify the recent drop? It seems like a decent buy right now. If this is irrational selling like the last drop, we could get a nice opportunity to invest. Link to comment Share on other sites More sharing options...
Packer16 Posted June 18, 2014 Author Share Posted June 18, 2014 I haven't seen any change. Its closest comp (Radnet) has now rallied to a premium valuation of 7.6x EBITDA to AIQ. Packer Link to comment Share on other sites More sharing options...
plato1976 Posted June 18, 2014 Share Posted June 18, 2014 Is AIQ more leveraged? I haven't seen any change. Its closest comp (Radnet) has now rallied to a premium valuation of 7.6x EBITDA to AIQ. Packer Link to comment Share on other sites More sharing options...
Packer16 Posted June 18, 2014 Author Share Posted June 18, 2014 Funny thing is no. AIQ has leverage of 3.2x EBITDA and 6.1x EBITDA coverage while RDNT has leverage of 4.9x EBITDA and 2.4x EBITDA coverage. Packer Link to comment Share on other sites More sharing options...
gary17 Posted June 25, 2014 Share Posted June 25, 2014 AIQ just need a magic blue pill to stay up for a while LOL ;D sorry, it was there i had to take it... on a separate note.... could AIQ be a buyout target for a larger player looking to consolidate? is the industry consolidating? Gary Link to comment Share on other sites More sharing options...
gary17 Posted July 7, 2014 Share Posted July 7, 2014 I wonder if the resistance for this to trade at $40 ~ $50 is because of the interest rate risk... since the long term debt is variable rate. The 10-K noted below - anybody has an opinion about this? thanks, Gary An increase in prevailing interest rates would have an effect on the interest rates charged on our variable rate debt, which rise and fall upon changes in interest rates. As of December 31, 2013, approximately $504.1 million of our debt was at variable interest rates. If prevailing interest rates or other factors result in higher interest rates, the increased interest expense would adversely affect our cash flow and our ability to service our debt. If interest rates are higher when our debt becomes due, we may be forced to borrow at the higher rates. As a protection against rising interest rates, we may enter into agreements such as interest rate swaps, caps, floors and other interest rate exchange contracts. These agreements, however, carry the risks that the other parties to the agreements may not perform or that the agreements could be unenforceable. In the fourth quarter of 2013, we entered into five interest rate cap agreements to avoid unplanned volatility in the income statement due to changes in the London Interbank Offered Rate ("LIBOR") interest rate environment. These agreements, which mature in December 2019, have a total notional amount of $250.0 million and were designated as cash flow hedges of future cash interest payments associated with a portion of our variable rate bank debt. Under these arrangements, we have purchased a cap on LIBOR at 2.50%. Link to comment Share on other sites More sharing options...
tombgrt Posted July 9, 2014 Share Posted July 9, 2014 A big portion of their debt is covered through these agreements. They continue to decrease debt as well so any future impact is likely to be small? Whatever it is that is keeping the stock down, it can continue for all I care. I have bought and sold AIQ at least 4 times now between $27-33, each time cashing in a decent return and deploying it elsewhere, only to be able to buy it back days later at the same low price. I always hold on to a small position in cash we do get to $40+. I have again bought a 10% position yesterday as there aren't that many attractive things out there. Link to comment Share on other sites More sharing options...
gary17 Posted August 7, 2014 Share Posted August 7, 2014 OKAY - I personally think it's a great quarter but I am usually missing something... Positive EPS. And owner's earnings of about $120M annualized (netincome + amortization ) x 4 - $62M capEX. At a market cap of $300M.... this sounds too goo to be true... please let me know where I've made a mistake! Link to comment Share on other sites More sharing options...
yadayada Posted August 7, 2014 Share Posted August 7, 2014 -9+39+17 = 47 million. Capex normalized will probably be something like 45 million$? and that 47 million you have to do twice, not 4x because it is last 6 months. So I would then get something like 94-45 =49 million in normalized FCF? Link to comment Share on other sites More sharing options...
gary17 Posted August 7, 2014 Share Posted August 7, 2014 Yes you are right - the cash flow statements are in 6months , not 3 - oops So I wonder how much of the capEX is growth and how much is maintenance. I believe from an earlier UPS conference they said $30M so technically owner's earning could be $90M - $30 = $60M Still very good. Gary Link to comment Share on other sites More sharing options...
plato1976 Posted August 7, 2014 Share Posted August 7, 2014 what's their plan on FCF? pay down debt furthermore? Yes you are right - the cash flow statements are in 6months , not 3 - oops So I wonder how much of the capEX is growth and how much is maintenance. I believe from an earlier UPS conference they said $30M so technically owner's earning could be $90M - $30 = $60M Still very good. Gary Link to comment Share on other sites More sharing options...
gary17 Posted August 7, 2014 Share Posted August 7, 2014 what's their plan on FCF? pay down debt furthermore? Yes you are right - the cash flow statements are in 6months , not 3 - oops So I wonder how much of the capEX is growth and how much is maintenance. I believe from an earlier UPS conference they said $30M so technically owner's earning could be $90M - $30 = $60M Still very good. Gary YES - pay down debt & expansion... Paying down debt is like buying share- increases the value without incurring taxes on shareholders. My quick calc indicates net debt of $477M + $300M market cap = $777 EV EBITDA is about $150M (avg of guidance) so that's 5.2x multiple. If by this time next year they paid down another $40M and still same Market Cap then EV = 737 or multiple of 4.9.... So if they can keep decreasing debt & keep increasing EBITDA then at some point the market will need to adjust the price... that's how it is supposed to work :) Link to comment Share on other sites More sharing options...
yadayada Posted August 7, 2014 Share Posted August 7, 2014 Yes you are right - the cash flow statements are in 6months , not 3 - oops So I wonder how much of the capEX is growth and how much is maintenance. I believe from an earlier UPS conference they said $30M so technically owner's earning could be $90M - $30 = $60M Still very good. Gary well they need to buy new machines if the old ones run off. Or is that maintenance cap ex too? Link to comment Share on other sites More sharing options...
gary17 Posted August 7, 2014 Share Posted August 7, 2014 Yes you are right - the cash flow statements are in 6months , not 3 - oops So I wonder how much of the capEX is growth and how much is maintenance. I believe from an earlier UPS conference they said $30M so technically owner's earning could be $90M - $30 = $60M Still very good. Gary well they need to buy new machines if the old ones run off. Or is that maintenance cap ex too? I think that's what 'maintenance' is... and there's a separate capex for expansion... Packer - help - would love to hear your thoughts :) Link to comment Share on other sites More sharing options...
Packer16 Posted August 8, 2014 Author Share Posted August 8, 2014 Very interesting call. They appear to be moving forward as planned but I really liked the outsourced radiology JV they set up with an unnamed publicly traded hospital group. This where I have seen most of the M&A with hospitals buying radiology offices for 7x EBITDA. This can be a great cash flowing business for a hospital. This combined with Oaktree ownership and the CEO selling past firms to strategics makes for an interesting situation. It also appears that no analysts were on the call for 2Qs in a row. The maintenance cap-ex is to keep the existing equipment but most of the fixed sites have LT contracts to ensure they make a return on there investment. This equipment can last a long-time to. Packer Link to comment Share on other sites More sharing options...
tombgrt Posted September 5, 2014 Share Posted September 5, 2014 http://www.reuters.com/article/2014/09/05/alliance-health-ma-idUSL1N0R615K20140905 Link to comment Share on other sites More sharing options...
yadayada Posted September 5, 2014 Share Posted September 5, 2014 And if they sell it would probably for 7x EV/EBITDA? Ebitda is about 130 correct? Net debt is about 500 million. So then I get about 400 million. about 30% upside. But then they might reduce debt another 30 million this year, and increase ebitda another 10 million. Then I get about 65% upside. Link to comment Share on other sites More sharing options...
Packer16 Posted September 5, 2014 Author Share Posted September 5, 2014 The EBITDA is closer to $150m or the mid point of the current range of $140 to $160m per the 2Q conf call. Packer Link to comment Share on other sites More sharing options...
yadayada Posted September 5, 2014 Share Posted September 5, 2014 how likely is this to happen? Why would they release it to the public? To close the gap valuation gap a bit so a potential buyer would not have to pay a large premium %? Link to comment Share on other sites More sharing options...
investor-man Posted September 5, 2014 Share Posted September 5, 2014 Interesting. I must be doing something wrong because I get almost a double at 7x EBITDA. Here's my back of the envelope calcs: EV/EBITDA calc is Debt + Market Cap + Minority Interests - Cash = (500 + 318 - 14 - 31) / 150 = 5.15 And with the 7x multiple that implies an increase in Market Cap (773 + X)/150 = 7 ==> X = (7 * 150) - 773 = 277 And there are 10.63 shares outstanding, so 277 / 10.63 = $26 additional per share. So just to check my work the new share price would be ($29 + $26) = $55 The new market cap would be $55 * 10.63 = 584.65 EV/EBITDA = (500 + 584.65 - 14 - 31) / 150 = 6.931 (so roughly correct). What am I missing? Link to comment Share on other sites More sharing options...
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