SMC

SMC's headline 2025 looks like a turnaround — revenue up 30.8% to $562M and the net loss cut to ~$5.9M from -$122M — but the MD&A shows the near-breakeven was propped by a one-time $126.3M gain on sale of an equity-method investment, partly offset by a $50.1M loss on early debt extinguishment. Strip those out and pretax income is deeply negative: interest expense alone is $94.7M against total revenue of $562M, and the core gathering business has posted losses three years running (FY23 -$51.5M, FY24 -$122M, FY25 -$5.9M). The revenue growth is bought, not organic — MD&A credits the Tall Oak and Moonrise acquisitions for essentially all of the O&M, cost-of-gas and D&A increases, while legacy Northeast throughput fell 202 MMcf/d. This is an integration-and-deleveraging story, not a growth-and-margin story.

The balance sheet is the crux. Liabilities are 2.38x equity, long-term debt is $1.02B against just $9.27M of cash (down 59% YoY), and current assets ($96.9M) sit below current liabilities ($177M) — negative working capital. Management is explicit that debt covenants restrict dividends and that cash flow will go to reduce debt and reinvest; there has been no common dividend since May 3, 2020. Sitting ahead of common are $46.6M of accrued Series A preferred dividends the board approved paying by March 2026 — a full year of free cash flow diverted away from common holders before they see anything.