I made a pretty good estimation of Yellow Media’s Q3 projections, my range was EBITDA of $160.4M to $175.8M with them achieving an actual of $166.0M.
Modelling Q4, there are two significant factors worth considering. One has to adjust an amount due to the impact of the LesPAC disposition. There may be an impairment expense dealing with the CanPages fallout that will take effect in Q1-2012. A parenthetical note that has to do with the “I” in EBITDA; one has to make a subtle adjustment to the amount of cash interest the corporation is paying – it will be about $7M less due to debt repayments.
In Q3-2011, the corporation did $166.0M EBITDA; in Q4-2010, the corporation did $192.7M, but Trader Corporation needs to be removed from the equation, thus this is adjusted down to $161.3M. This number itself is artificially low because the company expensed the majority of its income trust to corporation expenses in this quarter. With Trader Corporation, the number is $225.2M, and adjusting Trader out of this was $193.8M as a baseline.
Leaving out my distillation which can compete with alchemy, leaves the following projection, which uses a 14% decay and plus or minus 4% for error bounds:
Higher than expectations: $174.4M or above;
Lower than expectations: $158.9M or below.
I also anticipate the company will announce it will convert the Preferred Shares Series 1 into equity, but this should not surprise the market. A potential surprise, and one I cannot predict, is whether the company will suspend preferred share dividends completely – my model shows that in 2013 the company will face a cash crunch if it cannot renew its credit facility as the Medium Term Notes become due. This does not assume any further asset sales.
There becomes a bit of psychology involved. Payment of preferred share dividends will cost about $29M for 2012, and this is assuming Series 1 and 2 convert into equity at the earliest date. If dividends are suspended, the company will save cash flow but this will not be sufficient to pay off the 2013 Medium Term Notes with existing operational cash flow. If the dividends are not suspended then the company will still not make the 2013 MTN payments unless if they can raise cash through an extension of their credit facility or an asset sale.
However, the market perception might be better later in 2012 than it is currently. It is also more likely that it is more likely there would be some sort of recovery if the company paid preferred share dividends than if it did not.
My guess is that the company will continue paying preferred share dividends for this quarter, but I am not completely sure. I do believe the preferred shareholders will become more vulnerable later in the year when Yellow Media tries to renegotiate the credit facility – if their operations are not to snuff, the bank(s) that are willing to lend to Yellow will likely have as a covenant that preferred shareholders cannot be paid unless if Yellow Media is below certain debt coverage ratios.
I also believe management will bring up the idea of doing a reverse stock split, as the dilution after the conversion of Preferred series 1 and 2 will likely keep the stock price below the psychological barrier of one dollar for some time.
This continues to be a high risk, very high potential reward situation if the company gets it right and stems the decay in revenues. However, it will be a long and drawn out battle as it struggles to raise cash to slay its debt albatross. If you assume the company will not go into creditor protection, the unsecured convertible debentures (TSX: YLO.DB.A) has great value, but again, they are trading at 21 cents to the dollar for a reason – you never know if/when they are going to do a pre-packaged CCAA deal, at least if you are not an insider. Since the unsecured convertible debentures are subordinated to the other components of the debt structure, they will likely be offered a pittance compared to the Medium Term Note holders in such a deal, which explains why they are trading at about half of the Medium Term Notes of comparable coupon and duration.
Thanks for Q4 projections. TD projections also show about 160 mil of EBITDA. however I would like to know what your model tells you about the cash in their Balance sheet at the end of Q4 or free cash flow. That is really the key to determining if the company will make it or not.
However looking at the report from Sensis, where revenue is down 24%. YPG has not choice but BK.
No idea what this Sensis report is you’re talking about, but if YLO revenues are down 24% Y/Y, then yes, they are obviously screwed (there are other swear words that would probably be better to describe it).
Sensis is a yellow pages company in Australia, same as YPG. you didn’t answer my cash question.
Thanks
Supermedia (SPMD) is another comparable.
How the EBITDA reconciles to cash is not that useful on a quarterly basis as long as the company doesn’t engage in massive capex. AR/AP will fluctuate. Probably the largest impact to cash vs. EBITDA in 2012 will be the double taxation. This will genuinely make things a bit more difficult.
Reported $147.2M; their EBITDA margin, if around the 51% they typically did, would have resulted in about $160M, margins were lower due to, “Cost of sales increased by $11.4 million to $103.9 million during the fourth quarter compared with the same period last year. The increase for the quarter is attributable to additional selling expenses in connection with our Mediative division.”, “The
decrease for the quarter is due to lower print revenues and lower margins associated with Canpages and our Mediative division”, and also “During the fourth quarter of 2011, we incurred a non-recurring expense of
approximately $6 million in connection with a sales tax assessment.”.
I noticed they changed the tax payment estimates.
I did manage to shed most of my preferreds, but not all of them before this announcement, which was too bad.
The company’s only option at this point is an asset disposal since the credit market isn’t going to let them touch a cent at current trading prices! The other option, obviously, is going into CCAA and restructuring the debt.
First question, what is your opinion post conf call, given the new appointments to the board? Does this smell like preparing for CCAA?
Regarding the C&D prefs, I can`t seem to find the prospectus on sedar. Does anyone know what the provisions are. Is there some kind of lowball redemption feature, someone said $2 but they might be talking about the As. I am assuming all prefs will become worthless in a CCAA scenario.
Pref cut doesn’t make sense to me, if you are going to restructure, you just do it, no need to cut pref divs ahead of time, so I don’t know if this is a tactic to get a better term sheet on a bond Re-Fi, along with the draw down they did on their LOC to hold cash (before the LOC get taken back).
Wondering if i should take $1 for my prefs before its 0
Yes, CCAA seems to be imminently into the cards. What tipped their hand was the drawing of the revolving credit facility. There is no way they would do that (and incur an extra 4.5% interest expense) unless if they wanted to lock horns with the banks over an imminent showdown. It had to deal with their periodic reporting in their credit facility.
I don’t like it when management says they think they can offered secured debt or some other wizardry to get out of this. The only way they will be able to raise cash at this point is by earning it (which oddly enough they do, just not fast enough), or by selling their assets. Saying they can do so otherwise just shows they are dreaming rather than planning.
I did go through the C and D prospectus some time back before hitting the buy button and there is no lowball redemption feature – they can call them at $25 but obviously that’s not happening. The A and B series are redeemable into equity at 95% of market value or $2, whichever is higher, within the relevant date range.
The unsecured debentures may have a sliver of value in CCAA, but it will be behind about $1.8 billion in senior debt ($1.4B MTNs, roughly $400M credit facility).
Personally, I took my lumps and the CRA will be paying a portion of my losses for me. Your only hope now is an asset sale and even then, you’ll really only benefit if you are on the debt side of the capital structure. The prefs are a long way down.
Have you considered a scenario in which the company goes into CCAA and the equity does not get wiped out? This seems like a reasonable scenario to me because the main issue is the timing of the debt maturities, not a lack of cash flow to service the debt. I have seen two companies in the U.S. go through bankruptcy where the equity survived; check out GSIG and LEE. YLO looks less distressed to me than these two stocks did in bankruptcy.
There is an opportunity for the company to get ahead on its payments by buying back MTNs at a discount to par, otherwise it appears that the company comes up short on the 2014 notes by 6 months or so. I must be missing something, because I’ve seen this before elsewhere and common holders do not just get wiped out when the company is still generating cash. CCAA can be used to isolate and restructure particular maturities, such as the 2014 notes. If the company just buckles down and retires debt as the cash comes in, at some point several years down the road the growth in online revenues could start driving overall revenue growth and debt/EBITDA will come down to a level where YLO regains access to the credit markets. There is a lot of upside for both the debt and equity in that scenario.
If you believe what you are writing is true, you should be buying those C and D preferred shares like crazy.
It is a pretty sad statement that YLO’s preferred shares are trading lower than what Fannie Mae and Freddie Mac’s preferreds are at (just note this analogy is for humour rather than analysis), but if you believe equity holders will get anything out of a CCAA filing, you are dreaming.
Now if YLO goes on a firesale of its assets, you might be in business if you own some debt. Those MTNs are at roughly 42 cents on the dollar at the ask.
“Now if YLO goes on a firesale of its assets, you might be in business if you own some debt.”
What assets do you have in mind? I feel like the low hanging fruit has already been picked.
If YLO can somehow monetize some more of its assets, things would look a whole lot brighter for the debt and even the preferred
OK so the entire business is worth less than 3x EBITDA? If you go by current MTN prices, is it worth less than 1.5x? These valuations are absurd. They recently sold both Trader (which was not growing) and LesPac for about 10x EBITDA; what would their growing online business go for? Print may be shrinking but it still has value because it generates cash flow and it gives the owner direct access to 340,000 small businesses in Canada. I think equity holders would likely benefit in a liquidation.
All the company needs to do to avoid CCAA is secure a relatively small LOC that allows them to repurchase MTNs. These negotiations haven’t even started yet, so talk of CCAA is somewhat premature. In the event of CCAA, all that is needed is the lengthening of a few maturities, and the court would likely determine that both equity and bondholders benefit the most from maintaining the company as a going concern and running it for cash.
The print business IS worth 3x EBITDA. And like you said, they can’t sell that because “it gives the owner direct access to 340,000 small businesses in Canada”, which is important for them to grow their online business.
If they want to sell anything, it would have to be their online business.
And selling their core online business of course would be a complete way of reversing their strategy to “go digital”.
If they can’t do a pre-packaged deal with creditors then the process will take some time through CCAA.
Ok… if the print business is only worth 3x, and it’s necessary to keep it combined with online… does online deserve 3x as well just by association? The two businesses together are worth more than 3x, as 30% of the business is seeing strong organic growth that mitigates print decline. There are a few more internet properties they could sell, but the core businesses are stronger together than they are broken up. It all leads to the same conclusion… the best way to maximize value for all stakeholders is to run the business for cash and continue transition from print to online. It will be tight, but the cash flows will take care of most of the debt as it matures, which will in turn reduce interest expenses and increase the intrinsic value of the equity. They will need a little extra financing to patch up a few leaks along the way. It will be more expensive financing, but not impossibly expensive.
I look at financial statements around the world all day every day for a living, and I specialize in dumpster diving. I could be wrong of course, but this is not what a bankruptcy normally looks like.
If you look at Groupon as a barometer (which I would admit is overly generous) then one would presume the online assets have sale value. The LesPAC disposition was done at quite a high P/S ratio.
I disagree with the “tight” assessment with respect to cash. The 2013 MTN maturities coupled with the February 2013 facility expiration will make it impossible unless if they raise cash through an asset sale. The market is not letting YLO raise debt capital.
“but this is not what a bankruptcy normally looks like.” – Completely agreed. Not normal at all.
Ironically this whole problem could have been avoided if the previous CFO decided to use cash proceeds to pay off debt instead of buying back shares at ridiculously high prices. The cumulative amount of money spent on buybacks is depressing.
“The 2013 MTN maturities coupled with the February 2013 facility expiration will make it impossible unless if they raise cash through an asset sale.”
That’s presuming no credit facility (or a negligible one) following the February 2013 facility expiration.
I think YLO can get by with even a relatively small one (like $100mm).
This was posted on Stockhouse today. Yellow Media is incorporated under CBCA.
A bit of info on CCAA vs CBCA
The Canada Business Corporations Act (CBCA). Pursuant to the CBCA, a solvent Canadian corporation can restructure certain financial debt obligations pursuant to a creditor vote that binds hold-out creditors subject to shareholder approval and to court approval for general fairness. The CBCA is not an “insolvency” statute and, in fact, is not available to insolvent companies. For insolvent companies, the typical approach would be to use the Companies’ Creditors Arrangement Act (CCAA), but CCAA proceedings take longer, are more court intensive, are more expensive and implicate more contractual rights. For example, a CCAA filing triggers “bankruptcy defaults” under a company’s contracts with major vendors. However, by proceeding under the CBCA, The disadvantages, as alluded to above, were that shareholder approval was needed and that the process was open to dissenting creditors to assert that the company is insolvent and, therefore, not eligible for a CBCA transaction.
And this as well:
Ok, since I have been reading this board for a while and recently (though not recently enough…..LoL) started throwing some spec money into YLO shares, I thought I’d share my view. At these levels, I think the preferred, and possibly the commons offer a great risk/reward trade. This Co is far from CCAA. Even then, breaking up the Co, makes no sense there are no hard assets, the Co is worth way more whole than apart. Much more lileky is recapitalization under CBCA
The current low trading levels have been in part a simple matter of more sellers than buyers. There is allot of stock out there to be dumped. I’m sure many market sell orders have been given with little thought, “just get that s**t out of my account”, and there just aren’t many investors out there with a reason or stomach for buying it
Yes, YLO’s business model has issues, but it always has, and now just about all possible bad news is out and has been priced in. One needs to review what fundamentally has changed for this business in the last year, and the recent drop in share prices is not fully warranted (though it was way overvalued for years, propped up by the high dividends).
The common shares and preferred will not be worthless after a recapitalization, the holders will need to be thrown a bone in the recapitalization process so they will vote in favor.
I foresee the recapitalization as something like: The bondholders get new debt at a 50ish% of face, with some common shares or warrants thrown in for a kicker, Pref A & B get converted to commons & Pref C&D get new prefferreds at 10-20% of face, or some sort of conversion to commons. The commons would get heavily diluted no matter what, but the new capital structure would ramp up their value, inclining the majority of common holders to vote yes. That capital structure should work for a sustained business model for the current business, even if print revenues continue to decline at the current rate (and that should start to level out eventually). Though I think to make this all happen a shake-up of management would be needed to instill confidence in the go forward business.
Both posts by valuinvestor0
2/15/2012 3:28:25 PM | | 195 reads | Post #30676467
“The bondholders get new debt at a 50ish% of face, with some common shares or warrants thrown in for a kicker, Pref A & B get converted to commons & Pref C&D get new prefferreds at 10-20% of face, or some sort of conversion to commons. The commons would get heavily diluted no matter what, but the new capital structure would ramp up their value, inclining the majority of common holders to vote yes.”
I disagree. Yes, YLO debt is trading below 50% of par value… however, why would any medium term note holders agree to get new debt at 50% face value + common and preferreds when they would easily recover 80%-90% of face value in bankruptcy?
“Why would any medium term note holders agree to get new debt at 50% face value + common and preferreds when they would easily recover 80%-90% of face value in bankruptcy?”
Or without bankruptcy.
“The 2013 MTN maturities coupled with the February 2013 facility expiration will make it impossible unless if they raise cash through an asset sale. The market is not letting YLO raise debt capital.”
Based on my cash flow estimates, which are lower than most analysts, if they retire the 2013 MTNs at par, they will not be able to retire the 2014 MTNs in full. There are several things that could realistically happen in order to solve this problem.
They can repurchase 2013 MTNs at a discount, thus saving cash for the 2014 notes, which are trading at an even deeper discount. They have $130m available on their revolving LOC to repurchase 2013 MTNs, which at current prices could wipe out the entire $255m outstanding. If you are worried about the revolver not being renewed, the company should generate enough cash this year to pay down both the term loan and $130m on the revolver at expiration. At current MTN prices, the company will not have a problem with the 2014 notes. I don’t expect the MTNs to stay this cheap forever, though.
It’s true that the market does not want to lend or have anything to do with YLO, but in this case the market is rather unsophisticated. It is made up mostly of individual investors who were holding the stock for dividend income. The stock price is currently driven by extreme emotions, not fundamentals. The banks on the other hand, are more rational investors. They see that all the company needs to survive is a small LOC available to repurchase MTNs, and they will likely extend one to the company at a higher interest rate.
If the banks don’t extend the LOC, there are plenty of hedge funds out there that would probably be interested in issuing short-term high-interest bridge loans to fill the gaps in the maturity schedule. It’s a compelling investment proposition, as the company is generating predictable cash flow, focusing on debt reduction, and has sufficiently low leverage and high interest coverage ratios.
As debt is reduced and leverage ratios improve, the ratings should improve as well, which will gradually give the company greater access to the debt markets to refinance MTNs several years out.
All this talk of bankruptcy on the message boards and blogs and the company hasn’t even started negotiating with the banks yet! The stock is trading as if bankruptcy could happen tomorrow. I would expect the company to go down fighting, and if bankruptcy is in the cards it won’t happen until late 2013 at the earliest. There is a lot of time between then and now, and the company will have generated about $500m in free cash. Think about how much debt they could retire at current prices with that cash. Ironically, the market’s lack of faith in the company is the key to their ultimate survival!
Great discussion. YLO.DB.A is trading around $12 today. At this price, four semi-annual coupon payments return your capital. What is the likelihood that they can make it that far intact?
All I know is that it looks like they have enough cash flow to meet their obligations until April 2014, two years from now. You should get all your money back and then some.
“All I know is that it looks like they have enough cash flow to meet their obligations until April 2014, two years from now.”
I would like seeing your model that makes this happen.
Every analyst report that I’ve seen uses a more optimistic model than mine, even the reports calling the stock a zero. The business is fairly predictable. Let’s say they do $550m in EBITDA in 2012. Interest payments on debt will be about $110m this year, which will drop going forward as debt is reduced. Capex is expected to be about $50m. Cash taxes are expected to be about $125m. So you get $265m FCF in 2012. I don’t count preferred dividends as obligatory, since they are cumulative and can be paid later on. I’m expecting at least $480m EBITDA in 2013, $50m capex, $100m interest, $140m taxes. So that’s $190m of FCF in 2013. $455m total FCF to pay down $385m of maturing MTNs at par. Then you have another 4 months until the 2014 MTNs come due. There is obviously opportunity to take advantage of the current environment and buy back the 2013 MTNs at a discount which will save a lot of cash for the 2014 notes. All the company really needs is a bridge loan in case they come up short for 2014.
What part of this would you disagree with?
I expect you have been somewhat more conservative than I especially for taxes in 2013 given the decline in 2013 EBITDA, but what the heck the market can’t see beyond the end of the month. Robertson’s background with Tricap, Brookfield Asset and AbitibiBowater was totally resource company restructurings. If you look at their (Brookfield Asset) portfolio investments each co was capital intensive and producing minimal EBITDA at the time of Robertson’s involvement. YPG is a whole new ball game in comparison. The main impediment now is we do not know who owns the MTN’s and the Conv debs. If the majority are in secondary hands with acquisition prices close to current market they may be more malleable in equity wants. The other question I have is how fixated is the BOD on a quick fix to the entire debt situation. Other industry players have done soft restructurings and will need to visit their lenders again. YPG is in much better shape than all of them and yet is trading at a miniscule market cap. With all dividends gone and moderate interest rates and payments , YPG can generate a LOT of cash this year. Moving some of the cash tax payments to 2013 makes for greater flexibility in reducing debt. The Proxy circular will be out in six weeks, it will be interesting.
2013 was supposed to be a double taxation year, but the company has found a way to avoid some of those taxes and push some back into 2013. I’m just using their guidance.
S&P just downgraded the long-term corporate credit to B-… that’s not exactly imminent bankruptcy territory.
So… did you have a different model?
Hi Will,
Let’s pretend $550M EBITDA is the number (which would be about a 19% haircut from 2011 results).
Interest is $120M with the credit facility money drawn;
CapEx of $50M is reasonable.
Taxes of $125M is from the company’s estimate. Leaves $255M FCF for 2012, so $280M cash (February 9, 2012) plus $255 is $535M cash. Credit facility is $180+$239, leaving about $116M for the MTNs, $130M due in July and $125M due in December; since the cash generation is decaying, you’re still slightly short on cash. Still, a lot closer where you think they would get some high-rate loan for 2014.
The question that should be answered, however, is why YLO has $280M in cash on February 9, 2012. If they had $84M cash on December 31, 2011, drew $239M from the facility, and paid of $25M on the non-revolving portion, it means they burnt $18M cash in the first 5 weeks of the year. Timing? Or just losing money?
The company is obviously not losing money… it could be timing of interest payments, pension expense, deferred tax payments, canpages restructuring expense, etc. There really isn’t much to go by until the Q1 results are out.
By your numbers, the company still makes it through 2013. If the first MTN matures in July, that gives them 6 months to generate cash to pay it off; same with the December maturity. EBITDA is decaying but so is interest expense as debt is paid down. Interest coverage at the end of 2013 will still be around 5x.
2013 MTNs trading at 44 and 39 now… the company could use their revolver to pay down all of the MTNs at these prices and would generate enough cash to pay down the revolver by the deadline in early 2013.
I believe that the revolver cannot be used to buy MTNs – unfortunately
It can be used to buy up to $130m of the MTNs.
Specifically the 2013 MTNs
From a DBRS report dated February 13 2012:
“In its Q4 2011 earnings statement released on February 9, 2012, Yellow Media announced that it had … drawn $239 million of its $250 million revolving credit facility in Q1 2012 … DBRS also notes that drawing on its revolving credit facility precludes Yellow Media from repurchasing up to $125 million of its 2013 debt maturities in the open market, as would have been allowable under its September 2011 amended credit agreement.”
http://dbrs.info/research/245276/dbrs-downgrades-yellow-media-s-ratings-trend-remains-negative.html
I suggest you listen to the call yourself… all they have to do is pay down the facility and then they can draw it down again for the 2013 MTNs. Since the cash is there they could do it today… or maybe they already did it, who knows.
Furthermore, there are no restrictions against using operating cash flow to buy back MTNs. The company can save enough each quarter to pay back the NRT loan when it comes due and use the excess cash to buy the MTNs. Ultimately it should have the same result since the company should generate $125m over what is needed for the NRT within the next year. However, using some of the credit facility now would allow the company to take advantage of current market conditions, which may not last all year.
So what I’m getting then is that the DBRS comment:
“DBRS also notes that drawing on its revolving credit facility precludes Yellow Media from repurchasing up to $125 million of its 2013 debt maturities in the open market, as would have been allowable under its September 2011 amended credit agreement.”
is a bit confusing as it seems to imply that drawing on the revolving facility permanently precludes YLO from purchasing the 2013 MTN’s.
The final authority on this is of course the agreement itself. From subarticle 9.9, of the Second Amended Credit Agreement dated as of September 28, 2011:
… the Borrower may deploy an amount not exceeding $125,000,000 in repurchasing the 2013 MTNs provided, at the time of any such repurchase,
(w) the Consolidated Total Debt to Consolidated EBITDA Ratio … is less than 3.25 to 1,
(x) EBITDA … is no less than the projected EBITDA for such Test Period as set out in the September, 2011 Projections …
(y) at least $75,000,000 of payments or prepayments have been made by the Borrower with respect to the NRT Facility without the Borrower drawing upon the Revolving Facility to make all or any or part of such payments and
(z) there would remain (after effecting such repurchase) at least $125,000,000 of undrawn availability under the Revolving Facility.
Note: – for brevity and clarity I have extracted the salient clauses – the entire agreement can be had here: http://www.sedar.com/GetFile.do?lang=EN&docClass=13&issuerNo=00030627&fileName=/csfsprod/data123/filings/01806630/00000001/x%3A%5CASedar%5C2011%5CYellow%5CMatCont%5C2CreditAgreement.pdf
Clause (z) would be the deal killer in this case.
Hi Sacha Peter! Great discussion you have going here. I am confused by your term “deal killer”.
My understanding from reading the report from DBRS and subarticle 9.9 of the amended agreement, is that as it stands with YLO having drawn 239 million, leaving only 11 million undrawn, then by clause (z) YLO is precluded from purchasing the 2013 MTNs.
I think clauses (w), (x) and (y) are currently satisfied. Clause (y) particularly by the sale of LesPac.
However, reading Will’s comments, my further current understanding is that if YLO repays 114 million (adding to the undrawn 11 million) into the revolving facility, then the restriction under clause (z) is “undone” and YLO is then free to purchase up to 125 million dollars worth of 2013 MTN’s with whatever money it has.
Is this what you mean?
Clause (y) is about $5M away from being fulfilled (and this will be done in April when they have to apply another $25M to the non-revolving facility).
Clause (z) with $239M drawn means they can’t buy MTNs, hence my statement being a “deal killer”.
Also Clause (x) has unknown terms (e.g. what was that September projection?) which is why I suspect they just drew the facility.
Once again, if you listen to the conference call, they specifically address clause Z. They are holding the cash from the revolver, and can easily pay it back to start repurchasing MTNs. Clause Z is hardly a “deal killer,” it is just a technicality that has to be followed once the company makes a decision to go forward with the repurchases.
The company will be able to satisfy all clauses after the next quarterly NRT payment, coming up soon. They can probably pay it down early if they want, I’m not sure. As far as I know, there is nothing precluding the company from purchasing MTNs with excess operating cash flow.
Will, clause (x) may or may not be a deal killer as well. We simply do not know, but by virtue of taking out the $239M in the revolving facility, it would suggest that (x) is a limiting factor.
The only absolutely known limiting factor as of February 9, 2012 is (z), but (x) is a probable.
Fair enough… I do admit it is strange that they have not publicized the terms of this covenant. However, I don’t expect EBITDA to fall off a cliff given the nature of the business, and I expect that the projected EBITDA was conservative to begin with.