I see that M.P. has pulled the plug on the dreams for the Alltrista Bd and management team. I also see that T. Clark announced that the quarterly loses will be approx. 15-20%. Claiming industrial slow downs, yea right Tom And their stoc plunging to 12.54 and it will go lower. Lets see how many spammers post on this encouraging news.
Recent developments in ALC's business indicate further margin erosion at the expense of profit. Like many OEM suppliers, companies are being forced to compete on price; and many are sacrificing profit to keep factories running, and matertial costs low.
The plastics segment is at the bottom of a very deep hole. Stakeholder value cannot be served by attempting to wait out this economic near-recession. Current management has proven their inadequacies in managing this business, and need to focus on driving costs out, divesting non-performing assets (including high-priced management) and allocate sufficient resources to sustain current business. This is not rocket science, just good business. IMHO
You may have put your finger on the dilemna.
The metals business is there for now, but I don't see much chance for growth. And as battery makers continue to follow the NAFTA trail, even that market dwindles to nothing.
Even though it has bled money, the plastics business is the only growth opportunity there is here. Whether what has happened there is bad luck or bad planning or a mix of both is not real easy to see. Since the big OEM's that the Triangle/TriEnda segment serve have, like the big automakers, been pushing design and development down the food chain, a downturn protects them and puts the first and second tier suppliers (guess who?) in a tight spot. Which is what has happened. That is one of the risks of being tied too tightly to one single market. Of course, the bean counters and mismanagement consultants call that "focus".
Anyway the problem becomes one of developing new products and market efforts in spite of tossing your better people overboard, or encouraging them to leave. And despite the official line, this is, like most others, a business that people run. And it is the people who can find a way to make it all work. Or it won't work and will fade away.
There are not that many shareholders holding on to double-digit profit margins on this stock right now, so there isn't a lot of activity. I really don't see this stock going anywhere until the debt is paid down, divisions are sold or a solid offer materializes (including MBO).
Even then, one must consider the plastics business bled $XXX million out of the company, and the major customer bases for the metals division will eventually go away.
Current management has not supported increasing shareholder value, and smoke & mirrors/cost-cutting initiatives are, at best, a two-quarter excuse. IMHO
Thanks for the reply. I am only in this stock b/c they are selling the company. Hopefully this gets done quickly before any more value erodes. But, it is possible that they will have to wait a while for a rebound in their plastics biz, in order to not receive an embarrassingly low price for the whole company. Any thoughts?
From the 7/3/2001 Proxy:
"Also as previously reported, the Corporation and Marlin Partners terminated their Letter of Intent dated May 7, 2001, except for its expense reimbursement provisions. The expenses of Marlin Partners to be reimbursed by the Corporation are estimated to be $500,000."
Another addition to this revised proxy is the following statement:
"For the Chief Executive Officer and Chief Financial Officer, in light of their many
years of service to the Corporation, the Board of Directors also approved amendments providing for the payment of one year's total target compensation and benefits should either be constructively terminated or terminated without
According to the Q2 release, the charges for the strategic options evaluation the past two years has been over $1 million, and continues to negatively impact EPS without any realized benefit to shareholders. M.P. had asked for the elimination of the poison-pill amendments, it appears they have suddenly changed their minds since joining the board. IMHO
ALC management showed their lack of real business acumen when they purchased Trienda to become "North America's largest thermoformer." In grand style, they built up the management team, relocated personnel, and cleaned house with the naysayers. An ounce of due diligence is worth several million in EVA, as I always say.
Now that the hounds are lying with the dogs (M.P. on the Board), I believe the thermoforming business will eventually be sold - at a staggering loss to the shareholders. The business will recover, but not quickly enough or high enough to match the over-zealous assumptions that sealed the deal.
One of the few possibilities left for Tom and his merry men is to take the company private. However, with a consolation payment to M.P. in the amount of $500,000, M.P.'s average share price drops nearly a dollar. The majority shareholders should really question the value of this alliance. IMHO
Probably don't care, since it appears that employee retention at all levels is not a primary concern. And as far as pinning the blame, every financial report that Alltrista has published since purchasing Triangle/Trienda, has repeatly blamed them for falling profits and falling stock prices. If this is the true opinion of the Board, then the sale of the thermoforming operations should not have been a deal breaker in the proposed purchase by Marlin Partners. If one segment is dragging down the rest of the company, wouldn't the smart money tell you to get rid of it? I'm not aware of many companies that sell a product that consistently loses money for them. Those that do or did, are either out of business or on the way out. Look at the mom and pop type plastics manufacturers that these people keep throwing out there to validate the excuse that the entire plastics industry is collapsing, and therefore is the entire reason for the collapse of Triangle. When I worked at Triangle, those were exactly the types that J.B. used to prey upon to build his company up. Now it would seem that they, meaning Alltrista (through their management style), have become the hunted instead of the hunter. Just whose best interests have the Board of Directors been working for?
Exactly Gold, you can't have an effective management team that has self serving goals and practices. I believe it is counter productive and has proved it self to be true, if you research it. This management team is totally blind to what really goes on in middle management or maybe they aren't! Maybe they just don't care. This should be so obvious to upper management, you would think that they would want to find the problems and fix them. I mean after all the adjustments they have made so far and the problems still exist, dah. What should that tell you. I believe they either don't care, haven't got a clue on what to do, or are waiting for someone or something they can pin the blame on. Kind of gutless wonders with no direction.