All that matters is they have a run rate of $160MM of EBITDA or $1.66/shr on 96MM shares. Rockpile is doing much better than expected and could be spun off. The BS is rock solid and they have a great acreage position. Could be a big company.
Ah! I see the 12/5 statement now but strange it was not in filing. It is material. So that seems OK just the FDA warning letter on $15MM of sales that may be taken off market. Hate any company with CMS reimbursement issues but that is life.
They only have a short note in prospectus about Medicare reimbursement. Their is no mention of lower reimbursement for EPIFIX, their primary product. Their is no mention of revenue in the SEC filings. It appears that reimbursement under the Nov. 2013 CMS ruling will be lower than their January CMS Q4131 rate. Silence cannot be good news. If reimbursement is lower, they will not be profitable in 2014
Last weekend at the Walmart sponsored gun turn in, 900 guns were tendered for $100 each gift card. Six months ago only 198 guns were turned in. The scare is over and sales will be down and margins will collapse.
In California, Gov. Brown vetoed about half of legislation with comments like"more regulation will not reduce crime rates." The gun market went completely soft. AR-15's are now in every gun store sitting on the shelf at $1000 each. Without fear of taking away guns and ammo, the public will not buy. Law enforcement will not carry the crazy margin expansion at SW. SW kept raising prices all year and now is forced to give concessions just to get stores to take inventory. Backlog has evaporate as double and triple orders were cancelled. This quarter will be weak but next quarter will be dismal.
Operating profit in Transportation soaring and Patriot acq will add more. As spin off, Trans worth $160MM or $17/shr. That would leave us with the valuable real estate assets worth $37/shr. Even better, they will turn it into a REIT, and we will get a payout of $2/shr. Stock worth $54/shr.
Upon options exercise, the ordinary income is subject to a 52% tax rate for Federal and California. Almost every executive sells upon exercise. If a portion of the exercise price is used to pay for the option (cashless exercise), it is always sold. We will see further sales from exercise and that is pretty normal. These guys do not have huge salaries.
Looks like they are headed for bankruptcy. How do they refi without somebody taking control. The only thing that can save them is lots of positive cash flow in Q3&4. I would not count on that based on recent happenings.
Looked in line at $3MM operating but interest is $6.5MM. More shares for Oaktree as they are paying in stock. Cash down to $26MM and convert will take $22MM unless they claim insanity and get a deal. In any case working capital will be slim. 4Q outlook was underwhelming--down sales sequentially. Maintain short.
$14.7 mm non recurring charge. They had positive earnings of $2.5MM in the worst environment. Can you imagine what they will be earning in a few years when EPA reduces volumes. In 6 years no more R-22 so they will be earning $2/shr.
Up 16% on same tax rate basis. Last year no taxes and a 74MM credit. This year normal tax rate. Good earnings --stock will open up tomorrow. Buy in after market.
PATR will break up the company into transportation and REIT segment. The REIT will consist of their Washington area facilities. As a REIT we will receive distributions equal to at least 90% of net income but probably more than that as most REITs pay out 90% of FFO. I suspect it will be announced soon. We may also get a one time distribution of accumulated profits.
Sentiment: Strong Buy