Question-and-Answer Session
Operator
(Operator instructions) Your first question comes from Jim M. Rollyson from Raymond James.
James M. Rollyson - Raymond James & Associates
Hi Mike, your balance sheet’s obviously in awfully good shape. Maybe spend a minute just thinking or talking about how you think about utilizing that over the next 12 months in the market we’re in, or is it more of kind of hoarding the cash for now? Or thinking about opportunities that present themselves under the situation we’re in? Or how do you think about that?
Michael Quillen
Well yeah, well our philosophy hasn’t changed, even as our balance sheet has continued to improve. We don’t look to hoard cash, what we look for is that in this year, there’s going to be some opportunities, and our philosophy is still that Alpha needs to grow.
We think there needs to be consolidation in the coke industry, and we think that those opportunities, particularly in the second half of this year are going to be more attractive from a purchaser standpoint then they were a year ago, because obviously the pricing is going to come down.
We also think that both on the private and public sector, that you know, this is a cash flow business, you’ve got to have cash to operate, and there will be some good miners that will get in a situation—a cash situation that they can’t avoid going forward.
So again, our first priority is to grow the company, to do that prudently, and with the right multiples. The other options are out there, but for example, stock buy backs right now, there are some limits with our bank loan covenants, but we haven’t really seen that that’s been that positive to anybody’s shareholders. When they’ve done that in the past, it really hasn’t returned that much value to shareholders per se, and that’s a broad term. It’s certainly something that we would continue to look at.
Debt pay down right now, you know, we report accounting-wise an interest rate that’s somewhat higher, but our affected interest rate is pretty low on the amount of debt we had out there today.
We like where we are, we’re going to be somewhat conservative. We’re obviously waiting for the capital markets to do something going forward. We’ve seen some signals that there’s opportunities out there in the capital market side, so right now we’re still looking for growth opportunities as our first priority, and other then that, we’ll probably stay somewhat conservative for the next few months in terms of either share buy-back or dividends, or any other options we have for that cash.
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