Original Message

A. Todd stated several times during earnings calls that he wanted to maintain debt at no less than 2 times cash flow, no more than 4 times cash flow.  He wanted to maintain a strong balance sheet so the company could take advantage of acquisition opportunitites.  Today, after private "equity" (a bogus term since it is nothing more than a rename of the leveaged buyout shops of the 80's and 90's which "buy" companies with debt), debt is 9 times cash flow (per the Moody's report).

Private "equity" purchased the company at a share price of $43.  At the time, the stock was trading at $28 (and headed down).  Thus, they paid a 50 percent premium for the company.  You have to pay a premium to attract shares from potential sellers, but 50 percent for a company headed the wrong way?  The previous year, the company's stock traded in the $50 range.  You might say private "equity" paid too much and loaded the company up with debt to do the deal.