1. barely profitable when you take out the tax benefit and gain from cash surrender value of insurance 2. margins are way down (-18%) 3. sales are way down 4. a/r up 5. inventory up 6. forecast cloudy- expect a first quarter loss 7. default in loan covenants- expect a "going concern" qualification from the accountant if this keeps up
Bazet has a terrible track record. He always has an excuse. This was a solid company trading at $15 in 2006 with no debt and profitable and now look at it!
Why don't you read all the disclosures? They are DONE with the earn outs on PPL.
The majority of the "other assets" are, indeed, intangibles (but not goodwill).
You have every right to have concerns about management, when looking at the history of the last decade or so....particularly the "disaster" of the domestic GPS deal. On the other hand, quite frankly, I tend to feel that it was "good management" that they were willing to face the music as soon as they did, and "bite the bullet" as soon as they did. (COBR's moving into GPS devices, initially, seemed like a logical extension of the brand...and I'm not sure one could have readily determined that the area would become as "commoditized" or "mass market" as it did, as quickly as it did. Although one COULD make that argument, that management SHOULD have known the market was going to become too LARGE for a "bit player" like COBR, and that, therefore, the strategic thrust should have been avoided in the first place.)
I'm still maintaining an attitude of considerable patience here....as I still believe that this company MAY be able to validate to the Street, over the next year or two, that it can earn more decent returns than it has, in recent years. And, if and when they get to those more decent returns, if the stock price is not materially higher, I tend to feel there's an increased chance that someone is going to WANT to buy it, at that point (and with an opening up financing market in the M&A space), be ABLE to buy it. Just for full disclosure though: I am obviously NOT aware of any specific candidates, or anyone specifically interested. Rather, I see this potential as a "speculative kicker," based upon my own "intuitive" sense of the value of the brand and assets (along with historical profitability of COBR).
Blah blah blah...you did hit the nail on the head, however. see, I don't care about where they were--or returning to where it was.. I will agree that given today's economic conditions they seem overpaid AND the 5 million package to sell this company was a misguided pill to swallow and put before us++but I do believe this management team is intelligent, honest and savoy enough to do something good for those of us who identify the valued opportunity here++I mean HELLO this economy sucks, friend, and they are remaining innovative with product offering, adaptive to lower consumer price point metrics, focuses on branding and content which, IMHO, should allow them to leverage the real asset this company has and that is the COBRA name..Aura looks promising. having a tangible book value around $3.15 helps put in a comfortable floor..They handling the conference call well and I believe they will hit the 5 million EBITA projection this year and turn a profit.. If they hit the EBITA it trades, currently at 2.5 times projected EBITA for 2010 and that's dirt cheap for any company...So complain all you want we will know in just 12 short months.biggest thing in the short term is the banking relationship which they said they are addressing with vigor. seems to be acting fine since the numbers and this stock , given the valuation, should start being picked up on value oriented investors screening programs...
Every point I raised came directly from the SEC filing.
By the way, the company's books show "other assets" in the amount of $16m. This also appears in the previous year's statement. The company has failed to identify the nature of the asset. If this asset is "goodwill", (which I suspect it is) then shareholder's equity is down to around $17m or $3/share in tangible assets.
Also, I would suggest that you read the 2006 Performance Products agreement of sale. The agreement provides for certain earn outs. Are you sure that COBR has no further contingent liabilities resulting from the agreement?
Why are you blasting me for telling the truth? Bazet and his management team have ruined this company. Maybe the stock is worth more then it is presently trading for but clearly the stock will never rebound to its former position.
Way I see it partner, they forecast a profit(during tough times) and delivered on it... Cloudy forecast....?? They forecast a profitable 2010.. We won't know for one year, but, they just delivered on their recent forecast for the 4th quarter...So spew what you want
the loan covenants were breached 10 months ago(old news). you can blame our pathetic banking system in the U.S. ( if you choose ) kinda think this tim fellow, big holder, may have planted a nice seed in COBR for himself, if he's patient enough. imho btw the book vale is now north of $5.00