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Antero Midstream Partners LP Message Board

  • jrad52 jrad52 Jun 28, 2012 8:32 AM Flag

    Q2 results

    That was a surprise - accounting rules have really changed.

    OK, so the company says it made about 80 cents per share before unusual items, although you have to do the calculations to get there. In May and June, AM issued several 8-Ks about Clinton Cards, but the losses/write-offs associated with the deal are surprising.

    Clinton Cards was a big UK customer and was going downhill fast. It owed AM $ 25 MM for accounts payable (as of the May 9th 8-K)and was in default. So AM seems to have thrown good money after bad by buying Clinton's senior secured debt for $ 56 million, then pushing Clinton into bankruptcy court (the UK equivalent), and then acquiring ownership of a large portion of the operation in exchange for the senior secured debt. So far, I understand. AM wants the customer to continue buying AM cards, so it gets back into retail. Since AM exited US retail a few years ago, this makes no real sense unless AM intends to try to sell the restructured Clinton Cards to someone else, but for the moment, they bought a big UK retail operation.

    Now the write-offs - 35 cents write-off for the payables that Clinton Cards owed to AM. 24 cents write-off for deal costs and related UK stuff. Together with some other smaller items, EPS gets reduced from 80 cents to 20 cents.

    And Clinton Cards (now owned by AM) closed 350 of its 750 stores, so AM will presumably lose half of the sales it previously had with Clinton anyway.

    Unless the Clinton Cards situation deteriorated really quickly, I don't understand why AM didn't write down its receivables at year end, or earlier. I also don't understand why they are getting back into retail in any way, shape or form. I hope on the call they give some explanation, especially if they start off by saying that they will sell the operations as quickly as they can.


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