Basically is the company going to survive.
Q2 EPS of -1c beat estimates, and sales also beat estimates. However, the company lowered guidance and also announced it was buying assets (more debt) from Tidewater Renewables. It also cited 'tight credit conditions'. The diesel complex had a 98% utilization rate in the quarter, and it is expected to average 85%. Investors did not like the update, and the stock is down 31% today. Debt is very high at $315M, more than 3X cash flow approximately. Its recent issue of convertibles could further dilute the stock if conversion occurs or the company is forced to redeem or pay interest in stock. Not much good news here. Considering the small size of the company and its debt, we think it needs to be considered very risky, even with the new valuation. Solvency is not likely an immediate concern....yet, but things need to improve here.