SIMAD Holdings in 2025: The Camps Still Work, but the Test Has Shifted to Capital Structure

Company Overview

SIMAD Holdings did not come to Tel Aviv to tell a plain tourism story. It arrived as a new bond issuer that was incorporated in May 2025, and in December of the same year became the public wrapper for 30 summer camps in the US. That means the correct starting point is not whether children still want to go to camp. It is how seasonal cash flow, real estate, leverage and capital allocation fit inside one public vehicle.

What is already working is clear enough. The operating platform grew in 2025: revenue from operations rose to $165.4 million from $159.4 million in 2024, operating profit rose to $24.3 million from $22.0 million, and consolidated EBITDA including the company's share in associates rose to $41.9 million from $37.7 million. The 2026 season also opened well. By the end of March, about 18 thousand participants were registered with expected fees of $150 million, versus about 18.3 thousand participants and $141.0 million at the same point in the 2025 season. In other words, the money already on the board is up, even without a jump in headcount.

But the picture is still not clean. The active bottleneck is the gap between a business that produces cash in the summer and a public wrapper that has to divide that cash between debt service, collateral mechanics, a payment to controlling shareholders and new investments. At year-end 2025 the company had a working-capital deficit of about $41.1 million, but most of it came from customer advances of $66.6 million for the 2026 season. That is not a classic liquidity alarm. It is evidence that the model lives on a seasonal advance cycle, which means business quality and capital-structure quality have to be separated.

This is also where a superficial read can go wrong. If a reader stops at net profit of $13.0 million and equity of $140.1 million, the year looks reasonable. If the reader goes one level deeper, they find an enormous third quarter, a very weak fourth quarter, new financing costs after the bond issuance, and a $50 million payment to the controlling shareholders for the transfer of the activity. The transferred rights were also moved into the company as is, with no indemnification from the controlling shareholders in connection with those rights. The public vehicle therefore received a functioning asset package, but it also inherited most of its complexity with very little contractual protection above it.

There is also a practical actionability limit here. This is a bond-only listed company with no listed equity line. So the market read will come through collateral quality, rating, covenant headroom and bond liquidity, not through an equity multiple or an equity short read.

What matters immediately:

• Demand does not look like the problem. The value already booked for the 2026 season is ahead of the prior year at the same point.
• 2025 flexibility did not come from the camps alone. It also came from $181.7 million of net bond issuance and related financing flows.
• The weak assets exist, but they are not the whole story. Five camps with negative or very low EBITDA account for only about $23.8 million of value, just 5.1% of the appraised camp portfolio on a 100% basis.
• New Orleans changes the type of story. It adds year-round NOI, but it also broadens the mandate beyond the core summer-camp platform.

The economic map looks like this:

Events and Triggers

The bond issue changed the company, not only the funding source

The first trigger: in December 2025 SIMAD issued Series A bonds with NIS 620 million of par value, a 7% stated coupon and an effective interest rate of about 8.8%. Principal is scheduled to be repaid in five installments between 2026 and 2030, with the first four installments at 2.5% each and the final installment at 90% of principal.

At first glance that looks like a simple refinancing step. In reality, more happened. Part of the proceeds repaid bank debt, but $50 million was paid to the controlling shareholders for the transfer of the activity, and the remaining structure created the cash layer that allowed the company to finish the year with $36.5 million in cash. That is why the issuance matters so much to the analysis: it did not merely improve the funding profile. It rebuilt the balance sheet.

The rating action is a positive external signal, not a substitute for discipline

The second trigger: on March 1, 2026 Midroog removed the provisional mark from the rating and assigned a Baa1.il issuer rating and an A3.il rating for the bond, both with a stable outlook. That is a positive external signal because the structure passed its first post-issuance test and the collateral registration process was completed.

But precision matters. The rating action says the setup passed the first institutional screen. It does not cancel the underlying questions around capital allocation, around how much of the appraised asset value really translates into accessible flexibility, and around how management will now use the public vehicle.

New Orleans adds year-round NOI, but also broadens the mandate

The third trigger: on March 27, 2026 the company completed the acquisition of the leasehold rights in the One Canal Place office building in New Orleans, Louisiana, for about $29.6 million. The immediate report says the acquisition was made against a last appraised value of $30.0 million, occupancy stood at 68.4% at the time of the report, and a new lease had already been signed that should lift occupancy to about 75%. Current NOI was presented at roughly $3.0 million to $3.5 million, while stabilized NOI under the appraisal stands at $4.586 million.

The acquisition was financed with a $20 million loan carrying a fixed 7.25% rate through 2031, with a 1.35x SDCR test and a cash-flow sweep, while the rest was funded from the company's own sources. On one side, this makes sense: it adds year-round cash flow rather than seasonal cash flow and reduces dependence on one summer season. On the other side, it is no longer the same business. Once SIMAD uses the public wrapper to buy an office asset as well, investors have to ask whether they are following a leveraged summer-camp platform or a broader US real-estate borrower.

The 2026 season opened with more money, not more heads

The fourth trigger: the 2026 season gives a good signal on what is working in the underlying business. By the end of January 2026 the company had about 16 thousand registrants with expected fees of $130 million. By the end of February that rose to 17 thousand registrants and $140 million, and by the end of March to 18 thousand registrants and $150 million. At the same points in the 2025 season there were slightly more registrants, 16.4, 17.3 and 18.3 thousand, but lower expected fees, $131.2 million, $135.5 million and $141.0 million.

The message is sharp: SIMAD is currently showing more strength in price and mix than in raw volume. That matters because it supports the operating side of the thesis even without a sharp rise in the number of children.

Efficiency, Profitability and Competition

The core insight is that SIMAD's improvement in 2025 did not come from more campers. It came mainly from price, mix and expense discipline. The participant count, excluding Club Getaway, fell to 20.1 thousand from 20.6 thousand in 2024, while the average price per participant rose to $7,600 from $7,166. That is why camp revenue still rose even without growth in headcount.

This is also not only a consolidated effect. Breaking the platform by camp type shows that day-camp revenue rose to $56.5 million from $53.8 million, and day-camp EBITDA rose to $18.2 million from $15.6 million. Overnight-camp revenue rose to $109.0 million from $105.5 million, and overnight EBITDA rose to $21.8 million from $20.0 million, even though the participant count fell from 13.5 thousand to 11.5 thousand. In other words, overnight camps produced more dollars from fewer campers, while day camps produced both more campers and more EBITDA. That is not random. It points to real pricing power and a mix that is still working.

The company's explanation is plausible. The customer base is mainly made up of upper-middle-income and higher-income families in the US, with a meaningful Jewish-community component, especially in the overnight camps. That does not eliminate sector risks, but it does help explain why inflation has not broken registrations, and why the average fee per participant kept rising.

There is also a real competitive point here. The camps rely on reputation, repeat families and the scarcity of suitable camp assets. That is a different kind of competition from a standard leisure service. Operators that preserve a strong community and an operating standard do not fully restart the commercial game every summer from zero. It is not a perfect moat, but it is more of a moat than the market usually gives a seasonal-service business.

The superficial read can still get scared by the fourth quarter. That would be a mistake. Q4 2025 ended with a net loss of $22.5 million and an operating loss of $18.3 million, but that is almost the mirror image of the third quarter, when the company recorded $149.4 million of revenue, $69.9 million of operating profit and $67.7 million of net profit. Anyone reading Q4 without Q3 will get the business wrong.

Another important point is portfolio quality. The company itself highlighted five camps with negative or very low EBITDA in 2025: Greenville Land, Med-O-Lark, Mesorah, New England Golf and Waukeela. Together they carried about $23.8 million of value out of the total $466.6 million camp-value appraisal on a 100% basis, and their combined EBITDA was negative by about $1.47 million. That tells two things at once. There are real turnaround pockets in the portfolio. But even if they all keep disappointing, they still do not hold the whole thesis by themselves.

This is where the next test sits. The company says at least three of those camps need another season or two to reach balance or profitability. That is reasonable, but it also means 2026 is not only a test of market demand. It is a test of asset-level execution.

Cash Flow, Debt and Capital Structure

The single most important number at SIMAD is not the $13.0 million of net profit. It is how much cash actually remained after all real uses. To get that right, two different cash pictures have to be separated, and mixing them leads to the wrong answer.

Two different cash pictures

On a normalized cash-generation view, I am using only numbers the company explicitly discloses, with no maintenance-capex estimate. Cash flow from operations was $45.1 million, and investing cash outflow was $30.3 million, including $11.3 million of property investment and $19.0 million of movement in restricted deposits. If we look only at cash flow from operations less reported property investment, and do not try to invent a maintenance-capex number, the platform still produced about $33.8 million after reported capex.

On an all-in cash flexibility view, the picture changes sharply because all real uses have to be included: investment, restricted deposits, cash interest, debt repayment, distributions and the payment to the controlling shareholders for the transferred activity. On that view, 2025 was not a year that funded itself from the camps alone. Not close.

That is the heart of the story. The camps clearly generate good cash. But at the all-in level, the one that asks how much flexibility is really left after all obligations, the year finished positive only because capital markets stepped in.

The working-capital deficit is seasonal, not a classic distress signal

The working-capital deficit, about $41.1 million, can look alarming on first read. That is another easy mistake. Most of it comes from customer advances of $66.6 million for the 2026 camp season, in other words from cash collected in advance for a season that had not yet been recognized as revenue. Operationally, that is actually a constructive feature of the model rather than a classic warning sign.

But accuracy still matters. Not all the liquidity is free. Alongside $36.5 million of cash and cash equivalents, the company held $18.6 million of restricted deposits and another $0.4 million in a trust deposit related to the bond issuance. So the liquidity layer exists, but part of it is already tied to the debt structure. The company also states that on a solo basis, at the parent level, working capital was positive by about $37.5 million. That reinforces the idea that the real issue is not immediate liquidity. It is the quality and flexibility of the funding base.

The debt changed address, it did not disappear

Bank and other loans dropped net to $87.3 million from $185.6 million, but at the same time a bond layer of $183.4 million was added. So leverage did not meaningfully disappear. It shifted from bank lenders to the public market, with a new amortization schedule, new collateral mechanics and a covenant package the market will now read quarter after quarter.

Something else happened along the way: equity fell from $200.5 million to $140.1 million, in part because of the $50 million payment to the controlling shareholders and in part because of $30.1 million of distributions to owners and non-controlling interests. That is exactly why created value and accessible value have to be kept separate. A company can create value in the asset package and still leave a thinner cushion inside the public shell.

Covenant headroom is currently comfortable

As of year-end 2025 the company remained at a reasonable distance from the bond covenant limits. That is an important external signal because it says the structure is still breathing:

That is positive, but it does not answer the bigger question. The real question is whether the company will preserve that discipline after the New Orleans acquisition, and after any additional use of the public vehicle for new deals.

Outlook

Before the detail, these are the four findings that matter most into 2026:

• First: 2026 looks like a proof year for capital discipline, not a proof year for camp demand.
• Second: the 2026 booking trend says the next test is price and mix quality, not raw volume growth.
• Third: weak camps do not break the thesis, but they do test whether management can turn middling assets into working assets within a season or two.
• Fourth: New Orleans may reduce seasonality, but it may also turn SIMAD from a leveraged camp platform into a broader leveraged US real-estate borrower. That is a major difference.

2026 is a proof year, not a customer-acquisition year

If the next year needs a label, it is a proof year. Not proof that parents are still willing to pay for camp, that has already been demonstrated. The required proof sits one layer higher: can a seasonal operating business be wrapped inside a public bond structure, expanded with a post-balance-sheet office acquisition, and still remain capital-disciplined and readable.

The near-term data support the idea that the camps themselves should hold up. The historical cancellation rate is described as low, around 1%-2%, and by the end of February the company usually collects about 40%-50% of participation fees from registrants. That means the starting point for the 2026 season looks reasonable unless something unusual happens.

What has to happen inside the camps

The company now needs to prove that the higher average fee per participant is not being bought through hidden concessions. The annual report does not point to aggressive discounting or broad-based commercial relief, which is positive. But the combination of fewer registrants and more expected dollars will still need to be tested again in the next filings: is it true pricing power, better mix, or a one-year change in camp composition.

In addition, three of the weak camps still need time. Med-O-Lark is expected to improve starting in the 2026 season, while Mesorah and New England Golf still need another one to two seasons, according to management, to reach balance or profitability. Those are not portfolio-breaking numbers, but they are credibility-testing numbers.

What has to happen above the camps

New Orleans has to prove two things at once: that the property really moves toward roughly 75% occupancy as implied by the new lease, and that the new NOI layer does not come at the cost of focus on the camp assets. If the acquisition proves to be a measured move that reduces seasonality, the market should like it. If it starts looking like the opening move in a broader non-core acquisition program, the read will be much less comfortable.

The company also has to preserve the current covenant buffers. At year-end 2025 they were comfortable, but those buffers were measured before the 2026 season and before the actual contribution of One Canal Place. That is exactly why the market will now focus more on structure than on the operating headline.

What the market may miss

There is a fair chance the market will see the weak fourth quarter, the quarterly net loss and the office acquisition, and decide that the company is drifting away from the core right after issuance. That is a plausible first read, but not necessarily the right one. Anyone who focuses on 2026 booking value and covenant headroom will still see a relatively stable camp business with a debt structure that is not under immediate strain.

Risks

Seasonality is not background noise, it is the core risk structure

About 90% of revenue and 85%-90% of operating expenses sit in the third quarter. That is not just a business description. It is the actual risk structure. If one season weakens, or if a meaningful staffing or weather problem emerges, the damage is concentrated in a narrow window rather than spread over twelve months.

The company explicitly lists extreme weather, inflation and staff recruitment and retention as major factors that can harm the business. The appraisal material also repeatedly points to staffing shortages as a sector bottleneck. So anyone looking only at registrations misses the fact that the operating layer still has to get through a full summer without a major disruption.

The FX exposure is real, and the hedge picture is not detailed

There is another risk that can be missed easily. The bonds are shekel denominated, while the operating currency is the dollar. The company states explicitly that it is exposed to changes in the dollar-shekel exchange rate and that it reviews economic hedging from time to time under its risk-management policy. But the year-end report does not provide a detailed picture of an actual hedge position in place. The correct conclusion is therefore that the exposure exists, even if not every exchange-rate move will hit the income statement in the same way.

The strategic risk is mandate expansion

The third risk is that New Orleans becomes the first move in a broader strategy that blurs the vehicle's identity. The company still complies with the bond deed limits, and it even committed that 90% of its net assets would be US real estate. But that is exactly the point: the rule is wide enough to include offices, not only camps. If management does not keep a clear line, the market may begin asking for a higher risk premium simply because the story becomes harder to define.

The controlling-shareholder structure still sits inside the story

The assets were transferred to the company as is, without indemnification from the controlling shareholders in respect of the transferred rights. At the same time, the controlling shareholders continue to provide unlimited personal guarantees to bank and other lenders of the group. That is a mixed picture. On one side, the controllers are still inside the system. On the other, the public wrapper did not receive a clean acquisition with full seller recourse. That does not make the story broken, but it does leave a structural friction worth remembering.

Conclusion

SIMAD proved in 2025 that it has an operating business that works. The camps delivered modest growth, better pricing and a solid opening read into the 2026 season. Covenant buffers are currently comfortable, the rating has moved to a stable phase, and the camp appraisal provides a meaningful collateral layer.

But this is no longer only a summer-camp thesis. Once the issuance funded bank-debt repayment, a $50 million payment to the controlling shareholders, and then helped support a jump into a New Orleans office acquisition, the real test moved away from registration counts and toward a much more important question: can SIMAD run a leveraged public shell without losing capital discipline.

Current thesis: the camps support the operating story, but 2026 will mainly test capital structure, collateral quality and capital-allocation discipline.

What changed versus the earlier understanding: in 2025 SIMAD moved from a privately held camp portfolio into a public bond vehicle, and immediately afterward began using that vehicle for real estate that is not a summer camp.

Counter-thesis: it is possible to argue that this caution is already too harsh. The company opened public life with a stable rating, strong bookings for the coming season and very comfortable covenant buffers. On that view, the bond issuance simply did what it was supposed to do: replace a less efficient debt stack with an orderly public one and open room for growth.

What may change the market read in the short to medium term: the ramp at One Canal Place, the evolution of 2026 bookings, and whether covenant headroom remains comfortable after the new investment.

Why this matters: in the end, SIMAD's quality will not be judged only by whether it owns good assets. It will be judged by whether it can turn seasonal assets and a new debt wrapper into real long-term flexibility.

What must happen: the 2026 season has to stay strong without price-quality deterioration, New Orleans has to start adding NOI without diluting discipline, and covenant buffers need to stay clearly comfortable. What would weaken the thesis is overly aggressive use of the public wrapper for new deals before the first post-issuance layer has fully proved itself.