$RNDY it is ok as a spec but... whatever

$3.06

Market Cap: $147M

Sales $4.08B

EBITDA: $141M

EV $821M

EV/EBITDA: 5.82x

http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9MjUxODYwfENoaWxkSUQ9LTF8VHlwZT0z&t=1

DEBT/EBITDA = 5.9x. That's really high if it is not asset backed. I can't emphasize that enough. The debt here is alarming in isolation.

Mariano's finished the quarter with an estimated run rate of approximately $1.1 billion in sales, and we anticipate a $1.3 billion run rate by the end of 2014.

adjusted EBITDA 115-125M

http://services.corporate-ir.net/SEC.Enhanced/SecCapsule.aspx?c=251227&fid=9600590

Alright.. Just spent 45 minutes or so reviewing this...

This is a serious leverage play meaning that you run the risk of losing everything if operating margins continue to drop as they have been... Right now the business is operating at an adjusted EBITDA margin of 3%. Right now their total debt is $734M

Right now their interest expense burn is $56.8M.

That leaves around $63M for equity holders. So at 40% taxes that's $37.92M/year of leveraged free cash flow.

That means that the business is trading at 3.87x earnings right now... and realistically if the adjusted EBITDA margin drops 1%, the equity is worthless, creditors come in and take over.

So, that's the downside. The upside is pretty clear $10.

I think that this is worth owning in a small amount, nothing over 10%. It does sound like across the next 12 months that the company is positioning so that the results will start rolling in so I think that the timing here is pretty good.

Overall, am I concerned about EBITDA margins falling? Not really, but then again who knows... it looks like they are selling some stores that are underperforming... why? Can they not turn them around? We are 5+ years into a huge bull market.