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Ancestry.com Inc. Message Board

audphil78 628 posts  |  Last Activity: 3 hours ago Member since: Feb 21, 2007
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  • Reply to

    Stock green all day til last few minutes

    by hweb2 May 4, 2016 5:34 PM
    audphil78 audphil78 3 hours ago Flag

    I agree that his background would lead one to think he will certainly keep an acquisition of the company on the table; however, his compensation package (and all EVOL compensation packages are VERY reasonable compared to most other companies) does not skew heavily towards incenting him to this result. If I were the BOD I would give him 300,000 or 400,000 options at $7 or $8 that vest over 6 years, but vest immediately upon a "change of control" transaction. That would certainly light a fire under him towards being acquired at a good price.

  • Reply to

    Stock green all day til last few minutes

    by hweb2 May 4, 2016 5:34 PM
    audphil78 audphil78 May 5, 2016 3:11 AM Flag

    I am less sanguine than you are shorter-term. I love the company for its simplicity, transparency and the fact that they are extremely shareholder-friendly. It doesn't hurt that even in a #$%$ quarter, and taking a huge "one-time" expense, they still make money the old fashioned way (GAAP). However, I was less than impressed with the conference call. Thekkathala even made an ugly math error when describing the "service" model relative to the "one-time" sale model, and the only analyst asked a generalized industry question. I am also not very excited about Q2 and Q3 this year and feel that it may take till Q4 and then 2017 for EVOL to show its enormous operating leverage (with a 78% gross margin and taking out a huge amount of fixed expense). I believe the stock is "dead money", but as you pointed out, we do get paid quite well to wait. I could see the stock drifting back closer to $5 as Q2 results approach. I already have too large a position in this relatively illiquid stock, so while I think that $5.60 is an attractive buying price, it would take a lower price to entice me to add more, just based on overall safety and diversification for my portfolio. Also, I am not sure that a microcap like this can gain much "sponsorship" and still believe that the future gains in this stock will be based on increasing dividends as they gain traction in 2017 and the possibility that someone like a Synchronoss or a RedKnee will find them attractive for their customer relationships and the fact that with the cash availability that they have, a profitable acquisition would be accretive (by definition, since cash is earning close to zero right now.)

  • Reply to

    Earnings Projection for Q1

    by audphil78 May 2, 2016 11:05 PM
    audphil78 audphil78 May 3, 2016 9:47 PM Flag

    You were on the mark and I was too optimistic. That being said, I don't see the bookings and backlog translating to revenue as rapidly as I expected EVEN WITH THE "service" model than the one-time fee. I also find it curious that they put the payment date as July 1, which implies to me that they are trying to meet certain covenants for June 30 cash, working capital, current assets, ratios etc. Last year the dividend was pad around June 1. Just a subtle, but perhaps meaningful tipoff.

  • I think that Q1 will be the last "meh" quarter for EVOL and much of their new billings and backlog will start to kick in more heavily in Q2 and throughout the year. I look for about $8mm in revenue with $1.3mm in "operating income". That will be before at $1-$1.1 "one time" restructuring charge. I expect an $.11 dividend to be declared payable before June 1.

  • Reply to

    Need to knock out the squatter

    by o08o.ugh64w Apr 13, 2016 1:02 PM
    audphil78 audphil78 Apr 13, 2016 9:43 PM Flag

    In about another 40 days they will have the record date for the next $.11 dividend. Seems curious anyone would just throw away $.11??

  • Reply to

    EVOL sales growth

    by chrisdress Mar 21, 2016 1:22 PM
    audphil78 audphil78 Apr 7, 2016 6:43 AM Flag

    Each company has a different definition of bookings, but for EVOL it is:
    "Bookings are defined as sales orders expected to be recognized as revenue during the following 12 months."
    This covers both licenses and services.

  • Reply to

    Love that dividend

    by hweb2 Apr 1, 2016 8:50 AM
    audphil78 audphil78 Apr 3, 2016 5:49 AM Flag

    Your broker is quicker on the credits than Schwab, who waited till 4 hours after the market closed before mine was showing up; however, no matter, as you point out, we "double dip" for the $.22 if bought early enough.

  • Reply to

    Big bid

    by o08o.ugh64w Mar 31, 2016 1:31 PM
    audphil78 audphil78 Apr 1, 2016 8:44 AM Flag

    The buyer should go to the institutional desk of his broker and see if they can line up a cross with a motivated seller who might have that large of a position.

  • Reply to

    insider buys.Director Julian Singer

    by chrisdress Mar 23, 2016 11:09 AM
    audphil78 audphil78 Mar 23, 2016 9:54 PM Flag

    The options are VERY VERY thin...make the stock look liquid

  • Reply to

    2... .1.... 0

    by raleigh Mar 18, 2016 11:45 AM
    audphil78 audphil78 Mar 18, 2016 10:07 PM Flag

    NO

  • They will pay their dividend around 4/1 to shareholders of record 3/28 (due to intervening weekend, that would imply to shareholders who bought by 3/23). They SHOULD pay another dividend around 6/1 (which will be announced with their Q1 report). Thus a new shareholder will have a $.22 "cushion" against their purchase price within around 67 days of their purchase on 3/23.

  • audphil78 by audphil78 Mar 15, 2016 11:42 PM Flag

    1.) Will be moving part of their business towards a service contract model which smooths revenues over longer period of time rather than taking one up-front fee; but presumably MORE total revenues and clearly less "lumpiness"
    2.) As prior posts noted, they will be taking $1mm charge in Q1, but that, combined with the $533k charge in Q4 will ultimately save $3.5mm pre-tax and based on one of the analyst's questions, most of that will fall to the bottom line.
    3.) New term loan is at prime + 1% which currently is 4.5%; clearly a very favorable borrowing rate.
    4.) Their projections for the future, combined with the terms of the loan leave them, IN THE OPINION of the CFO, capable of continuing the dividend (that is no guarantee, but it is comforting!)
    5.) COO seemed to feel that 100% revenue growth over the next five years was feasible. My calcs say that if they can generate 100% revenue growth, they can generate MUCH higher bottom line growth
    6.) Also, as prior posts noted, tax rate was projected as being lower in the future. My comment is that the NOLs from 6thSense would not be the primary ingredient in that, as due to change of control regulations, the use of those NOLs would be around a maximum of $300k/year going forward.

  • Reply to

    Weak into earnings

    by hweb2 Mar 11, 2016 10:26 AM
    audphil78 audphil78 Mar 13, 2016 4:14 AM Flag

    Reasons for weakness:
    1.) As you duly noted, quarter will probably be a "clear the decks" and not show much organic revenue lift. Many may not look past that when the earnings are released to then look at backlog and bookings, as well as management's comments during the CC.
    2.) Concern that 1.) above, combined with new loan agreement may have them dramatically cut the dividend in the short term.

  • Reply to

    New Credit Agreement

    by audphil78 Mar 4, 2016 4:20 AM
    audphil78 audphil78 Mar 4, 2016 8:32 PM Flag

    I think micro-caps in general have grossly underperformed the market since it became "shaky" during last summer. EVOL's performance will be much more driven by their performance on a current basis as well as their bookings/backlog which are strong indicators of their future performance. The simplicity and transparency of their business and their financial reporting provide one with a lot of confidence if their outlook is positive.

  • They filed an 8-k which details a new credit agreement. Based on my reading they are getting a term loan for $6mm with monthly p & i repayments to start 1/1/2017 for 3 years till 1/1/2020.
    HOWEVER they must repay their TWO $5mm revolvers with the same bank. Thus their cash balance will go down by around $4mm in the short term. There are also restrictive covenants. One of them which relates to leverage uses quarterly EBITDA and one which relates to "minimum fixed charge coverage ratio" uses trailing twelve month EBITDA. What is quite interesting is the last sentence in the following clause:

    "“EBITDA” means with respect to any fiscal period an amount equal to the sum of consolidated earnings before interest, taxes, depreciation and amortization, stock compensation, foreign exchange gains or losses, and non-cash gains or losses. For purposes of calculating financial covenants, the following are permitted to be added back to consolidated EBITDA: $696,000 in second quarter 2015, $711,000 in third quarter 2015, $533,000 in fourth quarter 2015 and up to $1,000,000 in first quarter 2016."

    This might imply that Q1 2016 could be soft?? Also, as I still feel that they may change their dividend policy to align more with their earnings performance over the near term. fwiw

  • Reply to

    The plan will be unconfirmed.

    by lollipimps Feb 24, 2016 2:10 PM
    audphil78 audphil78 Mar 2, 2016 9:03 PM Flag

    Just because you see people jumping off a roof does not mean they have learned how to fly!!

  • Reply to

    Earnings should be out either 3/10, 3/11 or 3/14

    by audphil78 Mar 2, 2016 2:01 AM
    audphil78 audphil78 Mar 2, 2016 9:00 PM Flag

    I will take a shot: $7.3mm Revenue, $1.4mm Operating Income, $700k in FX and Restructuring charges for $700k Pre-tax, $550 After Tax $.05/share and nice growth in bookings and backlog with very upbeat guidance for 2016. Dividend is a "wild card" and they COULD change from fixed amount to a percent of After Tax Income going forward. This would lower dividend in the short run but ultimately increase the dividend as they grow and operations improve. jmho

  • Just hope they do not have their CC after close of market on Friday....that would be a bad signal.

  • Reply to

    Expectations for Q4

    by audphil78 Jan 28, 2016 12:26 AM
    audphil78 audphil78 Jan 28, 2016 9:07 PM Flag

    Could be that the late December buy frenzy related to their liking what they expected for 2016 and not anything stronger than that.

  • audphil78 by audphil78 Jan 28, 2016 12:26 AM Flag

    I expect them to "kitchen sink" Q4. New COO, acquisition with "restructuring" expenses and very touch comp to Q4 of last year. I would guess they will show about $5.7 revenue from "old" EVOL and around $1.3-$1.5mm revenue from acquisition for a total of $7-$7.2mm. I would expect that they will record about $1.1-$1.2mm BEFORE a restructuring charge related to 6th Sense acquisition and come in around $700-$800k in pre-tax income. What will be much more interesting will be to see what bookings and backlog look like for the Q, as that will be much more predictive of future performance. JMHO.
    I also think there is a CHANCE that they may change the dividend policy to start reflecting a % of "net" profits in the future, thus causing a smaller dividend for Q4.

    All of that said, I continue to "nibble" opportunistically and am happy that they did the acquisition for cash rather than stock!