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Compass Diversified Holdings Message Board

  • mthiker2004 mthiker2004 Mar 9, 2010 12:46 PM Flag

    Some observations from the CC and PR

    The 10k is due later today, and I'm sure it will have addl facts of importance, but for now, some observations.

    Advanced Circuits, pretty much flat YOY and QOQ with only modest quarterly revenue gains.

    AFM, same.

    Anodyne, same.

    Fox has improved dramatically over 2009, QOQ, even though not typically seasonal. Q1 was 20m revs, 29.9m, 36.9m to 34.6m in Q4. Most revs still come from mountain biking (and most from Europe), not the niche market of the Raptor (although the Raptor is a higher margin item).

    HALO is known for its seasonality. Q1 26m, 29.5m, 35.5m and finally 46.0m in Q4.

    Staffmark revs have increased 15-20% QOQ in 2009: 162m, 169m, 193m and 219m. (MAN reported on 3/9/10 that USA Q1 2010 hiring "dipped" while Europe was up. We will see what impact that has, if any, on Q1 '10.)

    Advanced and Fox are currently the two profit centers with about $16m income each for 2009, with AFM at about 5m, Anodyne at 7m, Halo 5m and Staffmark at 5m (excluding the one time charges in Q2). (The income numbers are mostly correct ... my spreadsheet has the numbers for Q2-Q4 and I extrapolated Q1 instead of looking Q1 numbers up.)

    I thought it interesting there was no discussion in the CC or Q&A about Q1 '10, in light of the fact that Q1 is almost over.

    As to those who are anxious for a distribution increase (or predicting same), I will remind you of the Q3 CC where Manuel said we would get an increase when (a) a couple of acquisitions were completed AND (b) we had 2-3 consecutive quarters of core business improvement.

    Lastly, for those who worry that the distribution in 2009 exceeded CAD, once again: (1) CODI is still carrying +$100m in undistributed cap gains on the books (although admittedly cap gains are not the best source for regular distributions); (2) Even after the distributions in 2009 (and paid 1/10), CODI has a $20m surplus of CAD on the books; and (3) The CAD surplus will increase to $25.5m after the presumed April $.34 distribution (see below). So even if we don't get CAD of $.49/share each quarter of 2010, and it dips below the distribution of $.34/share, the surplus CAD has the potential of making up the shortfall for several quarters.

    Q4 2009 CAD = $17.9m; add the CAD carryover = $20.0m; less the presumed 4/10 distribution of $.34/share ($12.44m) = $25.45m CAD carry-forward.

    GLTA.

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    • Thanks for the executive summary. Sounds like a good CC. Stock is acting quite well considering the price spike followed by the sell off. For those who wish they had traded here today, got to keep in mind that in addition to the gain from buy price to sell price, there is income tax to pay on the adjusted basis. In a nutshell, any distributions that show up as return of capital have to reduce your basis. This is an advantage of a MLP if you buy and hold. Of course, if you hold in a 401k, that is not a concern. On the subject of 401k's, I noticed there was no unrelated business income reported this year on the k1 which is good news for me since I am holding in a 401k.

 
CODI
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