Tag - DWT

China East Air Depository Receipt (Nasdaq:CEA), Britannia Bulk Holdings Inc (Nasdaq:DWT) and China Southern Airlines (Nasdaq:ZNH) are among the new 52-week lows in Monday's trading among companies with market capitalizations under $1 billion.      

Also included among the results: Guidance Software Inc. (Nasdaq:GUID), FPB Bancorp Inc. (Nasdaq:FPBI), LNB Bancorp Inc. (Nasdaq:LNBB), First Keystone Financial Inc. (Nasdaq:FKFS), CryptoLogic Ltd. (Nasdaq:CRYP) and Strattec Security Corp. (Nasdaq:STRT).         

Here are the new 52-week lows among small caps:  

www.rhitv.com
(Nasdaq:RHIE)
Scheduled for the week of June 16
$212.5 million estimated proceeds
$380.8 million estimated post-money valuation

It’s a story ripped from the headlines: scrappy company faces down worst IPO market in years and succeeds beyond its wildest dreams in a heartwarming tale of triumph over long odds. You’ll laugh, you’ll cry, but will you make money? If you watch Lifetime, you know RHI Entertainment. The company produces made-for-TV movies and miniseries, and then sells them on DVD after their network runs. It was originally owned by Hallmark, of greeting-card fame, and known as Hallmark Entertainment. In 2006, it was acquired by an investment group led by a father and son television production team, Robert Halmi, Sr. and Robert Halmi, Jr. They also acquired domestic DVD rights to the Hallmark Channel’s library, and they continue to make movies for the Hallmark Channel.

The company has since branched out beyond the Hallmark Channel to make and distribute programs for a range of other television outlets including pay-per-view and direct-to-video options. It plans to have 40 new productions in 2008 alone. The value of the deal is in the assets, though, because RHI is losing money on a net income and cash flow from operating activities basis; it had positive EBITDA in 2007 but not in 2006. Much of this is due to interest expense, $38.3 million in 2007, which should be eliminated after this transaction. With the interest expense gone, RHI should post solid profits. Like other entertainment companies, RHI is allowed to capitalize its production costs, though, which may lead to some overstatement of profits. The business has to be valued on a cash-flow basis by an investor who feels comfortable . . .