Update really leaves more questions than answers. They told us they financed the upgrades through mainly 3 year leases. Now for accounting purposes are these treated as operating or finance leases for the purpose of calculating EBITDA?
In short, if treated as operating leases for the unaudited figures, then lease costs are in the quarterly reported figure. If a finance lease they are not, as the lease cost is amortised over the lease period on the balance sheet, with only interest and depreciation charged to the profit and loss. This means the total of the lease repayment is not in the EBITDA figure.
It is important when trying to work out cash flows and potential valuation on sustainable future cash flows IMO.
Anyone who has been here long enough knows I am highly supportive of TSI, but good decisions can only be made on good disclosure.
Cheers
VOR Price at posting:
18.0¢ Sentiment: None Disclosure: Held
