and therefore based on that premise, i'm buying a bit here on the weakness, and should the market pressure the shares down to $1 before June 30th, i'll probably add to my position.
Q2 is a seasonally strong quarter for the company, and based on the progress they've already made on their $20M EBITDA turnaround plan (as evidenced in Q1 results--over 50% of the 200 points have been accomplished), i think they'll pass the June 30th Debt/EBITDA test.
The main points for the company going forward is to win ES contracts that are more favorable on margins, and continue to execute on what seems to be good momentum in the CIA division. Coupled with the turnaround plan continuing to address the 200 points of change, i think they'll come in ahead of street expectations at years' end.
Hopefully in a year or two, when their liquidity isn't so severely strained, they can look at doing something about refinancing that Brookfield facility with some other form of debt with not such a punishing interest rate (currently the Brookfield facility is costing ARF 12.2% per annum).
If they can get to that stage in a year or two, and EBITDA gets back up to $65-75M, and EBITDA margins are back up to at least 14 or 15%, well, then i think the stock will be $5 or $6 bucks, and that's assuming no dividend being paid for the next few years.
So, based on that rationale, the risk/reward at these levels (sub $2 levels) i think is worth the gamble, assuming one is willing to hold the shares until this time next year, at the least.