The last time I checked the post office is down 26 billion envelopes a year mailed from 2006. Technology has destroyed the envelope industry. Check out the last time anyone under 50 years old mailed a letter. The answer is never. The best part our dope purchased 3 envelope companies to add to our mess. Next time try buggy whips.
For me, its not the fact he is in the envelope business. Its that he bought a business, loaded it up with debt, and continued to load it up with debt over 8 years. He even said in his last call the idea was to sell this company after building it up. My problem is he has been playing private equity guy. He has taken a huge salary (btw its equal to almost 10% of the market value of the company) He has slashed benefits, shamelessly pushed employee stock purchases (even subsidizing the cost), driven payroll costs down, and for what? Those are actions taken by PE guys before they sell a company. He obviously over-estimated the future of this company. Even if the economy didnt tank, who buys a company with more debt than even total assets? Forget cashflow. This company barely covers interest. First 9 months of 2012, cash flow negative 7.5mm. No consistency. No positive trends. The best he can hope for is to roll-over the 2013 bonds into more debt. Who cares if its unsecured? All that means is you can screw someone by defaulting. Is that your plan Bob? Your plan to buy, borrow and sell failed. Since you never had any intention of running this business, you havent spent money updating or keeping plants efficient. How will you sell a business that is cash flow negative, overloaded with debt, losing major customers to declining business models and filled with plants in disrepair and employees who want to lynch you?