Castellum nears payoff of term loan, eyes debt below $10M

VIENNA, Va. – Castellum, Inc. (NYSE-American: CTM), a company specializing in cybersecurity, electronic warfare, and software services for the federal government, has reported making its 34th consecutive monthly payment on a term loan from Live Oak Banking Company. With only two payments left, Castellum anticipates retiring the original 36-month loan early in August, which was initially procured to facilitate an acquisition in August 2021.

The company’s total outstanding debt now stands at $10.6 million, with expectations to further decrease as it continues to make scheduled principal payments. Castellum’s management projects its total debt to drop below $10 million by the end of the year.

Glen Ives, who is set to assume the role of CEO on July 1, 2024, commented on the company’s financial strategy. “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 Ives. He also mentioned the company’s ongoing relationship with Live Oak Bank, indicating plans to maintain a revolving credit facility with the bank post the term loan’s retirement.

This move aligns with Castellum’s broader financial policy aimed at strengthening its balance sheet and enhancing shareholder value. The firm’s commitment to reducing its debt load is part of a strategic approach to improve financial flexibility and invest in growth opportunities.

The information in this article is based on a press release statement from Castellum, Inc.

InvestingPro Insights

As Castellum, Inc. (CTM) approaches the retirement of its term loan, investors may find the following metrics from InvestingPro valuable in assessing the company’s financial health and future prospects. With a market capitalization of $10.25 million and a revenue growth of 10.69% for the last twelve months as of Q1 2024, Castellum demonstrates a solid trajectory in earnings. However, it’s important to note that the company has experienced significant price volatility, with a 1-month price total return of -22.4% and a 3-month price total return of -46.31%, reflecting the challenges it faces in the market.

Despite these setbacks, an InvestingPro Tip suggests that the stock has been trading at a low revenue valuation multiple, indicating that it may be undervalued relative to its revenue generation. This could present a potential opportunity for investors looking for growth at a reasonable price. Moreover, Castellum does not pay a dividend to shareholders, which aligns with its strategy to reinvest resources into the company’s growth and debt reduction.

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