Financial report filed with bankruptcy court:
http://www.kccllc.net/windstream/document/1922312191130000000000002
22 replies (most recent on top)
Windstream gets alot of federal grant money for the ILEC territory in rural areas. They are supposed to put that money into the network, but they do not. They will try to keep the ILEC areas with SDWAN and Officesuite and shutdown the CLEC portion of the business. They have to, the CLEC model just isnt financially sustainable.
That’s a good post.
Right now, the bond markets are indicating Wall Street thinks unsecured creditors will get 15¢ on the dollars in total recovery (new bonds and stock). The secured creditors will get full recovery or close to full (depending on whether they’re 1st lien or 2nd lien).
Question:
Short of just laying off some percentage of every department, are there cuts /shutdowns /divestitures of whole chunks of the company that would cut the bleed rate?
I’m an ILEC customer (business and residential) - it looks like the ILEC should be a profitable business. Not s-xy, but not a big bleeder. My employer and I send off hunks of money every month and I don’t see much of it getting spent around here. I understand there are concerns about the long term future of ILECs but that future’s not here yet.
"A big chunk of Windstream’s monthly costs are depreciation and amortization. They’re accounting adjustments to show that Windstream’s assets are slowly wearing out."
I do agree that the A&M helps, our deprecation was $85M this month.
That is only a drop in the bucket in the big picture.
The problem is our Total Liabilities are still about $10B
Even after restructuring that doesn't help us. We would have to write down about 70% of our debt to look profitable going into Q4 of 20
WIN and UNIT are still talking but I think we are still too far apart.
” We do have a line of credit through CITI already for $500 Million. If the company is going through 40 Mil a month how does this fix the issue? All it does it buy us more time but it doesn't change the outcome.”
A big chunk of Windstream’s monthly costs are depreciation and amortization. They’re accounting adjustments to show that Windstream’s assets are slowly wearing out. They don’t involve cash expenditures. So if you take those out, Windstream is not losing cash that it has to replace with loans.
That’s a short term perspective since eventually that wear, tear and obsolescence will cost you real cash to replace. It’s not sustainable over multiple years.
Windstream’s proposal that Uniti pitch in $175 million per year for capital investments would help the long term issue of replacing aging assets. (Uniti countered with $150 million - still a big number)
For now though, everything’s short term as the company gets restructured to cut costs. That restructuring should focus on exiting some lines of business and emphasizing more profitable activity. It should preferably happen during ch 11. For some reason, it looks like management is choosing to just starve everything — that’s also unsustainable.
Then again, maybe they’re putting together a plan and are just not ready to roll it out.
In any event, new management after ch 11 will restructure things if the current team doesn’t.
"As much as I am ready for this slow motion train wreck to end (and for the CEO's to finally stop using the company as a piggy bank), I think they would just ask for another loan."
We do have a line of credit through CITI already for $500 Million. If the company is going through 40 Mil a month how does this fix the issue? All it does it buy us more time but it doesn't change the outcome.
"The contractors we use are friends and relatives of upper management. I had to open the door for a contractor to install a single sfp......anybody could handle this 30 second job, but we paid this guy $5k to do it. The are bleeding this thing dry"
I know for a fact that fiber contractors are raking in the cash from us. What one tech makes in 1 hr OT is about what a contractor gets paid for ONE FIBER. In one of our exchanges, they had a cut 72. By the time it was over, they paid the contractor over $7k between splicing, new cases, and call out.
Then the same contractor made almost $30k in the span of two weeks because a road project cut a 48 fiber 5 separate times. I all cases, there were Windstream techs that can splice fiber, on site, but upper management has come out and said from now on, any cut/repair of fiber or copper, contractors are going to do. WTF!!!!!!
Want to save money and have it done right? cut the contractors out and let the techs start doing the work they are suppose to do and stop taking it from us. Do the math......cut fiber and use 2 WS techs for 4-5 hrs to repair/fix, or spend $7k on a contractor and his helper.......
"I agree our RR(run rate) give us about 6 months of operating cash. I would expect a MAJOR shift by the end of Q1."
As much as I am ready for this slow motion train wreck to end (and for the CEO's to finally stop using the company as a piggy bank), I think they would just ask for another loan.
More smoke and mirrors accounting coming this spring when they sell off assets. They can bury debt, move head count, and look great on paper. Problem is that doesn't fix anything in the short term.
I agree our RR(run rate) give us about 6 months of operating cash. I would expect a MAJOR shift by the end of Q1.
” You kind of had it coming to you by not selling the 401k match that was in stock immediately.”
Nobody had it coming to them. You’re right that selling immediately was the best approach, however...
A loyal employee who’s not in a financial job should not have to second-guess management’s actions with their retirement account.
You kind of had it coming to you by not selling the 401k match that was in stock immediately. You still lost a little usually because stock was always sinking.
"I had to open the door for a contractor to install a single sfp"
Haha...hope they got those new ones with KY connectors to make it less painful when they stick'em in your bum bum.
The contractors we use are friends and relatives of upper management. I had to open the door for a contractor to install a single sfp......anybody could handle this 30 second job, but we paid this guy $5k to do it. The are bleeding this thing dry
I bet you TT and LL will enjoy the holiday and not lose sleep with the millions they have racked up. Those guys are getting ready to ride into the sunset
It looks like we are paying out about $100M in the end to lawyers!
A net loss of $600 million for 2019!
We are BURNING cash at a rate of about 10% a month. This means
we hit ZERO by next June. Our lifeline with Citi for $500M will buy
us another 6 months after that.
Lets forget all of the c-ap with UNITI
Chapter 7 here we come!
There is no way out of this. With zero employees windstream still wouldnt be cash flow positive. Management has no vision. As it was laid out below, just a simple ponzi scheme the last few years. And tony and he crew raked in MILLIONS!! They never have to work again, but the enployees and shareholders got screwed. Especially the way they matched employee 401k contributions with funny money/windstream stock. Criminals
Reposting some of this to give everyone our trajectory. Does anyone see a pattern here?
November operating results will show us the cost of the layoffs in separation packages.
Makes sure to look at the line items for restructuring or reorganization next month.
August
$410M in the bank (remember we don't pay bills right now)
$430M in revenue
$44M NET LOSS
$61M in goodwill
$41M paid to bankruptcy attys YTD
September
$385M in the bank
$415M in revenue
$39M NET LOSS
$61M in goodwill
$45M paid to bankruptcy attys YTD
Octber
$314M in the bank
$415M in revenue
$50M NET LOSS
$61M in goodwill
$50M paid to bankruptcy attys YTD
According to Uncle Tony, these numbers are a success!
TT already paid $2 million. Absolutely disgusting.
"I wonder what the long term plan of buying up all those failing CLECs was? They could have been profitable if they integrated everything properly. Instead they just kept buying and never actually integrated anything. It seemed like there was no plan whatsoever."
it was to gain subscribers without having to resort to organic growth (selling, having a good product, being a good company, etc). That is what kept the stock price up, which they used to leverage buying companies to get the next set of subscribers and so on. At some point they bought companies for fiber assets or to get a foot hold into markets that they knew they needed to diversify into because the core product was dying. So, it started with a shell game, mixed with borrowing from peter to pay paul, then sprinkled in some smoke and mirrors, then, emboldened by the limited success of being sneaky without actually doing anything, they tried the REIT debacle which brings us to where we are today.
I wonder what the long term plan of buying up all those failing CLECs was? They could have been profitable if they integrated everything properly. Instead they just kept buying and never actually integrated anything. It seemed like there was no plan whatsoever.
That's what I am seeing too ! $38 M Loss !! WOW..... we have 3 more Wed before Christmas.... I'd expect one more layoff by then.
Am reading this correctly, $38m loss?