Should CRC really sell for little more than the value of the cash (after tax refund is received) on the balance sheet? ESPECIALLY with the dramatic reduction in the loss rate, and the possibility for a very nominal loss, or even a break even this fiscal year?
I don't know why, especially with this balance sheet, AND the dramatic reductions in the loss rate, SOMEONE DOESN'T STEP IN AND TRY TO BUY OUT THE COMPANY FOR $4. Hell, I own 4% of the company (based on 4.64 million shares out), and I will support ANY offer of $3.65 or higher, that includes a full 60 day "go shop" clause.
Am I the only one that feels this way? Do the other holders see more potential in a full fledged turn-around? Personally, I'll take the "bird in the hand," at this point.
Why does the ESOP get to "decide" what happens? Can't the rest of the shareholder base "override" that?
Time for Chromcraft Revington to be "put into play," in my book! Great balance sheet, solid asset base....and there' gotta still be some "goodwill value" to the brand name, to boot! The furniture cycle is TURNING. Now is an opportune time.
These comments were made over two years ago. Sounds like a solid plan to "put into play"
Anyone game to enact this out before it is too late. Good thoughts die if no man doesn't act!
There is interesting upside if the mgt team had any idea how to adjust their product offerings and fixed costs to the current market environment. It appears they don't- and thus, will slowly run the business into the ground. It's a cash using business with debt, not a good combination.
You don't seem to get it. The management of CRC thinks of the company's assets as their personal piggy bank. The assets will be liquidated on an ongoing basis to pay their salaries and personal expenses and the shareholders will get ZERO!
estimates for other furniture companies are for revenue increases of 12% to 20% between now and 2012 (LZB, FBN, etc.)....LZB and ETH are already at normalized eps in 2010....furniture market is recovering as long as one has their manufacturing costs properly aligned....will not be as strong a reovery for housing, furniture, etc. as some expect, but make no doubt about it, reovery is in process.....anyone who does not understand this will continue to watch in the rearview mirror
Longtime....as you know I am with you, owning directly and indirectly more than 3% of the shares outstanding......if management can get its gross margin up to the level of LZB, NTZ, etc. around 30% to 33%, and if sales recover by industry expectations of 15% to 20%, than the company should get to its normalized e.p.s. of $0.55/share by 2012 (SG&A is at industry levels).....historically, the shares have traded at 0.65x relative p/e to the market (and most cyclicals trade at higher than normal relative p/e coming out of a recession)....the S&P trades at approximately 15x normalized earnings....putting a 10x p/e on normalized e.p.s. would get you $5.50/share plus cash of approximately $2.00/share post refund.....a discounted free cash flow valuation at a 13% cost of capital would get you $7/share assuming the market stays at 15x (which I doubt)....if the market goes to a 10x p/e by 2012, then the discounted free cash flow valuation for CRC goes to $5.50 per share.....this is also the mid-point between a full on liquidation of the company ($3.50 to $4.00/share) and an orderly wind-down of operations ($6.25 to $7.00/share)....free cash flow burn for 2010 should be minimal.....so the option value for now is open, however my central tendancy valuation is $5.50/share.....I would not accept offers below $4.50/share.
In summary, if this management team can get gross margins up above 30%, than the company should continue to be operated as an ongoing entity.....if they cannot, then the company's asset should be wound down and the cash distributed to shareholders. If this board does not follow this path, they will be personally sued.