Castellum, Inc. Continues to Reduce Debt
Castellum (NYSE-American: CTM) has made its 34th consecutive monthly payment on a term loan from Live Oak Banking Company, initiated to support an August 2021 acquisition. With only two payments remaining, Castellum's outstanding debt has been reduced to $10.6 million and is projected to fall below $10 million by year-end. Incoming CEO Glen Ives emphasized the importance of deleveraging to enhance resources for customer support, employee development, and organic growth, promising a greater return for shareholders. The company will maintain a revolver with Live Oak Bank post repayment of the term loan in early August.
- 34th consecutive monthly payment on term loan.
- Outstanding debt reduced to $10.6 million.
- Debt projected to be below $10 million by year-end.
- Deleveraging enhances resources for customer support and growth.
- Continued relationship with Live Oak Bank after loan repayment.
- Remaining debt still stands at $10.6 million.
- Two more payments required on the term loan.
- Need for continuous debt reduction suggests previous high leverage.
Insights
Reducing debt is a significant step for Castellum, Inc., especially for a company in the cybersecurity and software services industry. This move strengthens their balance sheet and can potentially enhance their credit rating, making it easier to secure more favorable financing terms in the future. With only two payments remaining on a 36-month term loan, the company’s strategy to deleverage is clear and should be appreciated by investors.
In the short term, reducing outstanding debt to $10 million by year-end provides more financial flexibility. It enables Castellum to allocate resources more effectively across different initiatives such as organic growth, which means growing the business using its own resources. In the long term, a lower debt ratio can reduce financial risk and potentially lead to higher profit margins and shareholder returns.
It's worth noting the timing of this announcement, with a new CEO taking office soon. This indicates a forward-thinking approach and a commitment to sustainable financial health. Investors should consider how this financial prudence might translate to operational and financial performance over the coming quarters.
The cybersecurity and electronic warfare sectors are known for their rapid growth and high demand, particularly from government contracts. Castellum’s focus on reducing debt can position them better to leverage new opportunities in these sectors. With a stronger balance sheet, the company can be more competitive in bidding for new contracts or investing in R&D to stay ahead of technological advancements.
Reduced debt also means less burden from interest payments, which can free up cash flow for other strategic initiatives. This is important in a high-tech industry where innovation and agility are key. By maintaining a positive relationship with Live Oak Bank and keeping a revolver, Castellum ensures they have access to capital when needed without the heavy load of term debt. This financial maneuvering shows a strong understanding of capital management, which is essential for continued growth and stability in the tech sector.
VIENNA, Va., June 06, 2024 (GLOBE NEWSWIRE) -- Castellum, Inc. (the "Company" or "Castellum") (NYSE-American: CTM) ($CTM), a cybersecurity, electronic warfare, and software services company focused on the federal government, announces that it has made its 34th consecutive monthly term loan payment to Live Oak Banking Company ("Live Oak”). Castellum has two remaining payments on an original 36-month term loan, taken out to support an August 2021 acquisition.
Castellum’s total outstanding debt has been reduced to
"Deleveraging our balance sheet by steadily reducing debt gives us more resources to support our mission customers, empower employee development, invest in organic growth, and, ultimately, provide a greater return to our shareholders," said Glen Ives, who will become Castellum's CEO on July 1, 2024. "We value our relationship with Live Oak Bank and will continue to maintain a revolver with them after we retire our term loan in early August," he added.
About Castellum, Inc. (NYSE-American: CTM) ($CTM):
Castellum, Inc. is a cybersecurity, electronic warfare, and software engineering services company focused on the federal government - http://castellumus.com.
Forward-Looking Statements:
This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements represent the Company's expectations or beliefs concerning future events and can generally be identified by the use of statements that include words such as "estimate," "project," "believe," "anticipate," "shooting to," "intend," "in a position," "looking to," "pursue," "positioned," "will," "likely," "would," or similar words or phrases. Forward-looking statements include, but are not limited to, statements regarding the Company's expectations for revenue growth, building value, serving our shareholders, and profitability. These forward-looking statements are subject to risks, uncertainties, and other factors, many of which are outside of the Company's control, that could cause actual results to differ (sometimes materially) from the results expressed or implied in the forward-looking statements, including among others: the Company's ability to compete against new and existing competitors; its ability to effectively integrate and grow its acquired companies; its ability to identify additional acquisition targets and close additional acquisitions; the impact on the Company's revenue due to a delay in the U.S. Congress approving a federal budget; and the Company's ability to maintain the listing of its common stock on the NYSE American LLC. For a more detailed description of these and other risk factors, please refer to the Company's Annual Report on Form 10-K and its Quarterly Reports on Form 10-Q and other filings with the Securities and Exchange Commission ("SEC") which can be viewed at www.sec.gov. All forward-looking statements are inherently uncertain, based on current expectations and assumptions concerning future events or the Company's future performance. Readers are cautioned not to place undue reliance on these forward-looking statements, which are only predictions and speak only as of the date hereof. The Company expressly disclaims any intent or obligation to update any of the forward-looking statements made in this release or in any of its SEC filings except as may be otherwise stated by the Company.
Contact:
info@castellumus.com
(301) 961-4895
A photo accompanying this announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/4719f124-b6a5-4296-a7a1-c7731485feba
FAQ
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