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Repayment of 2014 Convertible debt is done!!!

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http://investor.vitesse.com/secfiling.cfm?filingid=880446-14-36&CIK=880446

What's next? $17.2M in August 2016...

Hope the market likes this move....

Posted by Pac5705 - 8 years ago

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m 8.01 Other Events
Repayment of 2014 Convertible Debentures
On October 30, 2014, Vitesse Semiconductor Corporation repaid in full the remaining $32.8 million in principal amount of our 8.0% convertible second lien debentures due October 2014. The repayment eliminates annual cash interest payments and annual interest expense of approximately $2.6 million and $4.0 million, respectively. Following this repayment of our second lien debentures, our only outstanding debt is $17.2 million in principal amount of senior secured term loan debt due August 2016.

Next is making money!

Posted by GARIF - 8 years ago

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A definite signal of THEE RAMP! Hoo-ha!!!

...not to mention that BE is now VERY do-able with the cost savings from the interest AND the new lower-rent facility.

...getting out the ol' cocktail napkin... let's see

Revenues over the last four quarters have been around $107M, which resulted in a loss of about $21.4M. Subtract off interest saved by paying off the debt ($6.6M) and get around $121.8M (revs. + loss - saved interest). On a quarterly basis that puts BE right around $30.5M.

That's do-able.

It also sends a message: "We don't need the extra cash sitting around. We expect revenues to increase in the near future."

Out-standing!

Posted by phobos - 8 years ago | Updated 8 years ago

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They got this one right. God bless Vitesse.

Posted by dlog - 8 years ago

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May it be one of many things they get right moving forward dlog.

Posted by phobos - 8 years ago

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phobos:

I calculate the numbers in a different manner but come to essentially the same conclusion. I get break-even before interest expense (operational breakeven) at $30 million in product revenue and $1 million in IP, total of $31 million. The more IP the better. Higher gross margins would push the needed revenue for Break-even to lower levels still.

One point, VTSS is saving $4 million in interest expense. That INCLUDES the $2.6 million in cash payments for interest. What VTSS was doing was paying part of the interest in cash, $2.6 million and part of the interest in stock, $1.6 million, for a total of $4 million.

Posted by dlog - 8 years ago

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I'm admittedly a bit of a hack at financials, but I think that the both of us arriving at a similar result independently from different directions gives the figure more credibility. Thank you for doing that dlog.

Also, backing out the spurious $2.6M, I find we are in exact agreement at $31M/Q BE. Thank you!

Posted by phobos - 8 years ago

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Below is excerpt from daWiley1 post awhile back. Is share count reduction reality??

"news of the bond paydown, as our CFO said would happen at the last cc , and a decent 1Q'15 would be a great lift. be reminded that we will reduce the share count by 7.3MM shares with a pay down. and then debt will be $17.2MM due in 10/2016."

Posted by Techinvestor - 8 years ago

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"be reminded that we will reduce the share count by 7.3MM shares with a pay down"

Those were the words of our #2 man, I believe it may have been at the Wedbush Conference which sadly is no longer available on the companies site.

So you see friends, the company is really trying her best for all of our behalf.

Posted by GARIF - 8 years ago

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I would be a little cautious on the 7.3 million share reduction number. I have no question that had the debentures converted we would have seen the issuance of these extra shares. But be careful about taking the latest published number of shares and reducing it by 7.3 million. On the last quarterly report VTSS cited outstanding shares of 59.9 million "basic and diluted." There are some accounting rules about counting shares of a convertible when the company is reporting a loss ( which is the case here). To be simple the rules say "don't count the shares in calculating EPS if the company is reporting a loss." That is because if you did count the shares it would make the earnings per share calculation look more favorable because the denominator is larger. (IE the company would report an EPS of -$.10 per share instead of -$.15 per share.)

But whatever, maybe I am wrong.

Posted by dlog - 8 years ago | Updated 8 years ago

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Thanks GARIF & dlog for your take on the share reduction. A reduction in share count would really help attaining profitability and take pressure off increasing revs.

Let's hope this is the case.

Posted by Techinvestor - 8 years ago

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Those are some very interesting points about the share count.

Would it be fair to say... that since a share reduction would not be of benefit when incurring a loss (assumming that's true) that this portends VTSS getting the books ready to show a profit in the best possible light? When this possibility is combined with the debt pay-down (they would rather reduce expenses than keep a pile of cash they no longer believe they will need for survival), does this signal that profitability is immanent?

Now CRG did say during the last earnings call that a larger decline in legacy revenue in H1 '15 could be an issue, but it certainly looks as if VTSS is getting ready to return to profitability sometime during fiscal 2015.

Thoughts?

Posted by phobos - 8 years ago

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"Now CRG did say during the last earnings call that a larger decline in legacy revenue in H1 '15 could be an issue,

At the Craig-hallum conference they made it a non issue.

Profit should definitely be around the corner! VeriT and Intellisec alone have over 500 design wins, companies who became MEF 2.0 certified with Vitesse help are busy helping others, your article below is great example of the importance of Vitesse technology as Timing is central to Small cell and...

http://www.prnewswire.com/news-releases/small-cells-market-2014-2019-femtocell-picocell--microcell-prospects-for-lte-sons-wireless-offloading--heterogeneous-networks-281857341.html

Posted by GARIF - 8 years ago

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