It was a 1 year investment deal. He made a cool $1.3M. Rogerson and Forsyth would be selling out too if they could.
Since Chemtura has sold off Consumer and potentially Agrobusiness, this stock will drop back down to $10 if that is announced. All that cash will go towards paying back debt covenants since they just sold half the profits.
Take out the $50M debt extinguis loss and they would have made $10M is the good news but that is about it...
Cash flow mismanagement:
$50M loss on senior note buyback/swap to buy themselves a few more years doesn't offset $10M savings in interest.
When will you realize that investing in infrastructure/fixed costs is not the way to go in the Chemical business. El Dorado has not taught you anything? $95M into China plant (at least this one is for your continuing businesses), $20M into the India Agro plant what a waste of cash.
Share buyback $50M/2.2M shares-stop trying to cover the sell off of businesses/lack of earnings by anti-diluting shares. Consumer wasn't worth 2% of O/S. Better use of cash than trying to manipulate EPS. Should have waited for the market to determine what the Consumer sale was worth to equity.
IE products will never make money for you again-that market is gone-you gave it to Albemarle remember. When you went "green" with GLS, investors were hoping you meant financially, not just environmentally.
Agro-3Q not as good because of pull-up of sales incentives into 2Q-they are done for the year unless they push early buy programs to swizzle 2014 sales into Nov/Dec. With the shopping around to sell this business, they won't be focusing on making great numbers anymore during the off-season.
Your tell-tale indicator as to the future of CHMT is in Performance business-sales were up but OP was down because of inability to absorb start-up/fixed cost of new plants. Let's see how 4Q is when the same excuse is used. Another GLS in the making? High fixed cost-volume sensitive plants churning out inventory.
FYI-your cash on balance sheet does not match you cash on cash flow statement-$2M rounding error or just unreconciled?
The Bob Wood vision of becoming a specialty chemicals company is finally coming true. Divesting non-core businesses to get to Petroleum Additives as the only money-maker. Took 10 years to get back to Great Lakes-Hatco/Anderol. Oops forgot Orgo...
At least Rogerson started with the losers PVC, AO/UV but now he is shedding profits. If they can actually net $315M for Consumer that's 10X OP but what to with the proceeds? Return to shareholders? No it will be to pay off all the debt. And if he sells Agro, he's down $800M sales and $100M OP. That leaves a $1.8B sales $180M OP company with GLS/Orgo as breakeven at best to drag them down.
Time to move company HQ from Philly/Middlebury to WLAF. That will trim the fat cats that will not relocate. And major pay cuts to the Corporate Sr Mgt.
They only buy as much as they have to according to their contract, not because they want to. Any insider activity is their RSU's/stock compensation liquidations.
Only Alan Cooper has bought CHMT and that was through his Jet Capital. Again this is his buyin/maintenance to stay on the board.
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