Tear Sheet: Mountaineer Merger Corp. (dba Gabe's)

Gabe's had $118 million outstanding and $7 million available under its $150 million asset-based lending (ABL) facility due in 2028, as well as $9 million cash and cash equivalents on hand as of July 29. After the second quarter, the company upsized its ABL facility to $175 million to provide additional operating flexibility. We note the increased facility bears a higher interest rate, which we estimate will increase Gabe?s annual interest expense by approximately $3 million. We expect the company will continue to lean heavily into its ABL facility to support Old Time Pottery (OTP) store conversions over the next 12 months. We also forecast very thin annual FOCF of flat to $5 million, following three consecutive years of cash

...October 24, 2024 We forecast thin free operating cash flow (FOCF) and higher revolver borrowings will limit Mountaineer Merger Corp.'s (dba Gabe's) ability to absorb additional operating adversities. Gabe's had $118 million outstanding and $7 million available under its $150 million asset-based lending (ABL) facility due in 2028, as well as $9 million cash and cash equivalents on hand as of July 29. After the second quarter, the company upsized its ABL facility to $175 million to provide additional operating flexibility. We note the increased facility bears a higher interest rate, which we estimate will increase Gabe's annual interest expense by approximately $3 million. We expect the company will continue to lean heavily into its ABL facility to support Old Time Pottery (OTP) store conversions over the next 12 months. We also forecast very thin annual FOCF of flat to $5 million, following three consecutive years of cash burn. Although we do not anticipate a liquidity shortfall within the...

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