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I'll keep my shares and adjust my 2-3 target price slightly upward (from $15). But I'd really rather the company NOT disburse this round-about dividend of approximately $15 million. They owe about $120 million in LT debt and interest coverage is thin (1.6 times).

No doubt management thinks the jump in equity and earnings value a buyback can create for the remaining shareholders will spark an increase in share price. I hope they are right.

But my suspicion is that this buy-back is more of a maneuver between competing factions on the board.

The share are cheaper today than when I bought in last January. Price/Sales is down to 10% versus 11% in January. Price/Book is down from 33% to 23%. And price over TTM cash flow yeilds only 2.4. The lone analyst covering EBSC is calling for $0.90 per share in FY 02 Were the company earning that much today, the PE would only be 5.0, and the stock would surely double.

So I would far rather management focus its attention on proving the analyst right. I can wait patiently until then for my shares to rise.

Persuing both goals is mutually exclusive, because this company is barely profitable, three years out of bankruptcy, and can barely cover its debt service. Giving $15 million bucks to its shareholders right now is, well, foolish, not Foolish!

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