Hi Lute For me the issue for me is that, while ebitda last...

Hi Lute

For me the issue for me is that, while ebitda last quarter was $3.25M with Track contributing from memory about $2.45M (Q&A contributed about $0.8M according to my calculation), that makes an annualised run rate for Track of $9.8M. When CM8 bought Track it was doing $13.9M ebitda (refer to Track acquisition preso last year).

So the question in my mind is whether the decline in Track ebitda is a one-off for integration reasons, or is it a trend. (I am also still puzzled by the fact that the earn-out payment was calculated and being paid for the top of the range expectation, yet within months Track performance is now supposedly in line with the bottom of acquisition forecast (and could be lower).

Based on the historical numbers I'm confident that Q&A ebitda is growing steadily so is generating at least $0..8M ebitda per quarter and growing, or close to $4M this year. But Track 12 months ago generated $14M/4 = $3.25M ebitda per quarter for its owners before CM8 bought it, and last quarter it was $2.45M for the quarter - it could be up again this quarter but it could be declining.

I do believe the company will meet its June earn-out payment (if it couldn't they would have had to announce that by now - with only a week left they must be aware whether they can or not so it would be reportable). I also think it will meet its October vendor finance payment. But the open question is what is the Track earnings trajectory - they haven't said and usually when companies haven't said its not good news. That's why I think the SP is getting hit.

All eyes on June 30 for the debt re-negotiation, which if met will provide some positive relief, but imo the more important update is on Track performance in the quarterly, which unfortunately we won't see till late July.

Cheers, Sharks.