Question-and-Answer Session
Operator
(Operator Instructions) We’ll take our first question from Andrew Neff of Bear Stearns.
Andrew Neff – Bear Stearns
Is there any way you can give us a sense of any of the proposals or actions from the Steel Partners? Anything that they’re proposing that you can talk about?
Subramanian Sundaresh
Nothing at this time Andy. Right now we’re focused on bringing them up to speed on all aspects of the business and reviewing all the various options we’ve considered over the last year. We’ll see more color at the end of this quarter.
Andrew Neff – Bear Stearns
The second thing, just from a balance sheet standpoint, can you talk about any particular cash needs you have over the next year or so? And, what you’re doing to protect the balance sheet?
Christopher G. O’Meara
Well, the balance sheet is very strong. We have invested through outside providers the funds and they’re all in AAA, very secure bonds and treasury. So, in respect we’re clearly very conservative, very short duration as well. The cash needs to run the business, we really have very little capital investment and I think which we’ve talked in the past, our focus has been around using the cash for acquisitions that can really grow the business.
Andrew Neff – Bear Stearns
In terms of the convert, when is that due?
Christopher G. O’Meara
Well, the investors and the convert have a put that they can exercise in December of this year. Otherwise, the convertible expires basically in 2013.
Andrew Neff – Bear Stearns
And how does the put work?
Christopher G. O’Meara
They have a right to basically put the convert back to us and it would be paid off on the bond at par.
Andrew Neff – Bear Stearns
Where are the bonds trading now?
Christopher G. O’Meara
Bonds are trading in the low 90s. Basically, the coupon rate is 0.75% so it’s actually below rates. As of the autumn time frame, winter time frame it was trading pretty much at a 93 kind of rate.
Andrew Neff – Bear Stearns
So, how much would you have to pay back at the end of the year?
Christopher G. O’Meara
Well, we don’t know. Given the coupon while the total bond is $225 million that was issued so it obviously depends upon how many people actually tendered the bond. But, from a planning standpoint we’re assuming that pretty much all of them would be tendered for payments.
- To read the full transcript on Seeking Alpha, click here »
