I think we covered this issue before. In June 08, MNF released a statement stating that they were cashflow positive in the amount of $40,000 for 4Q FY08 and overall $327,000 cashflow negative for FY08. See below for details.
As was pointed out soon after in the full MNF FY08 Financials, cashflow is quite different to revenue. The full MNF financials came out later and indicated Revenue of $6.8M and an operating loss for FY08 of $1.7M. The loss of $1.7M includes the debt owed to Symbio of $2M, fact. This means that MNF will not post a $2M loss for this Symbio debt in FY09. It is all there in the report.
As for creditors, every company has them. In the case of MNF they appear to owe Symbio $2M at 30 Jun 08. We all know that Symbio is owned an operated by the 2 largest MNF shareholders.
It is apparent that these 2 shareholders are comfortable (A) with their Symbio Debtor MNF and its repayment terms & B) MNF are comfortable with the Symbio Debt and it's terms. Pretty rosy if you ask me.
Imagine if the MNF debt was to Telstra or someone like that, MNF would not have such favourable terms, MNF is clearly advantaged by this position and MNF shareholders should be quite pleased by this.
Overall, as a shareholder, one must be satisfied that that the company, whilst making a loss, will be able to turn this around in a short time and start making a profit. If we assume that MNF will continue it's approx 100% PA growth rate and that it's existing 60,000 subscribers continue to increase their monthly spend then it is not too hard to see that MNF will indeed be both cashflow positive & profitable throughout the course of FY09.
I have not undertaken a detailed peer comparison of MNF peers ENG & FRE in respect of their creditor position but if you want to keep this going I will and I do not expect it to be pretty. Of course ENG & FRE have more actual cash in the bank than MNF but they have proven to need it it big lots as their $8M-$12M losses for FY08 prove convincingly.
I think you should leave MNF alone in respect of financials, MNF are clearly the peer leader in this bunch.
MNF Price at posting:
14.5¢ Sentiment: Hold Disclosure: Held
