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Chromcraft Revington, Inc. Message Board

biblioguy 16 posts  |  Last Activity: Dec 10, 2014 8:04 PM Member since: Jul 26, 1999
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  • Reply to

    Q1 results

    by biblioguy Dec 7, 2014 12:52 AM
    biblioguy biblioguy Dec 10, 2014 8:04 PM Flag

    Use of the word "promotion" clearly implies price or volume discounts, and not additional salespeople or more business development efforts. Someone asked on the conference call about this, and the reply was that this would come off of the top line, and would not be in SG&A.

    Biblioguy

  • biblioguy by biblioguy Dec 7, 2014 12:52 AM Flag

    Somewhat surprised that no one else has commented on Q1 earnings thus far. The quarter was softer than I was hoping for, but not the disaster of the two previous quarters.

    Note the sentence in the "Lookiing Forward" section of the press release that states "Our promotional dollars for these and existing products will be directed away from mass media and toward targeted trade and consumer promotion." I read that as meaning such costs will be accounted for as reductions in sales, and not as SG&A.

    Biblioguy

  • biblioguy biblioguy Dec 5, 2014 12:09 PM Flag

    That's always one way to look at it, though I am expecting a good report. ODC typically reports results the weekday evening before the conference call, and since the conference call is this Monday, they are releasing results tonight. A number of ODC's contracts allow them to raise prices at the start of their fiscal year, so I am optimistic that the quarter will be good. Plus, sales should be higher than last year, because they acquired the MFM assets at the end of last year's first quarter.

    Biblioguy

  • Reply to

    Downgrade...

    by seevalue2020 Nov 17, 2014 5:41 PM
    biblioguy biblioguy Dec 1, 2014 10:07 PM Flag

    I agree, MFM can't be accretive and have a negative impact at the same time. But while MFM had a short-term negative impact, in the long-term it will be accretive. While I only named two customers in my previous post, I am sure MFM had many more than two customers - those are just the two I know of. The strategy with MFM is actually long-term, and involves hopefully getting the former MFM customers, to purchase ODC's lightweight scoopable litter, for their private label brands.

    Regarding outside shareholders owning more ODC stock than the insiders, I know of one outside shareholder who owns more shares than any non-Jaffee director.

    Biblioguy

  • Reply to

    Downgrade...

    by seevalue2020 Nov 17, 2014 5:41 PM
    biblioguy biblioguy Nov 25, 2014 10:27 AM Flag

    I think MFM began to be accretive as soon as ODC finished integrating it into their supply chain. I'm sure there were expenses involved in the effort to purchase MFM, plus considerable expenses to make sure that customers did not see any interruption of supply. MFM was in the private label coarse litter business, which has got to be one of the lowest margin businesses in this industry. But it was worthwhile for ODC, because they gained customers such as Publix and Meijer, and hopefully down the road the former MFM customers will purchase ODC's new lightweight scoopable private label litter, which likely has much higher margins than coarse litter.

    Sure, the former MFM business will help with economies of scale, but the margins are probably so thin, I doubt it will make a huge difference in and of itself. I am hoping that this year's first quarter will be an improvement compared to last year's not so good quarters.

    Biblioguy

  • Reply to

    Downgrade...

    by seevalue2020 Nov 17, 2014 5:41 PM
    biblioguy biblioguy Nov 24, 2014 8:24 AM Flag

    While I can't speak for Seevalue, my reading of the post is not that 27 is fair value, but that he likes ODC stock at 27 - meaning it's a good value.

    I think earnings this year will get a boost from price increases - ODC usually increases prices on several products at the beginning of the fiscal year (August 1st). I don't see the bottom line as hostage to advertising needs.

    As for private label scoopable, I am truly baffled as to why you think ODC is not pursuing this - both in the Q4 conference call and in the recent letter to shareholders, the CEO made clear that ODC -is- pursuing the private label scoopable opportunity. But it won't happen overnight, even if we wish it would.

    Biblioguy

  • Reply to

    Downgrade...

    by seevalue2020 Nov 17, 2014 5:41 PM
    biblioguy biblioguy Nov 24, 2014 8:17 AM Flag

    Regardless of what one thinks of the CEO's long-term strategic thinking ability, I agree with you that the current board is likely to look very different in five to ten years. Two board members (Mr. Selig and Mr. Cole) are 80, Mr. Jaffee is 78, and Mr. Miller is 72. Collectively, they have 159 years of service on the Board of Directors, or just under 40 years on average. The board will look very different once these four directors retire. But the most recent addition to the board, I also think is very good: Lawrence Washow, former CEO of AMCOL International. He has decades of mining, mineral, and clay experience, which should be very helpful.

    Biblioguy

  • Reply to

    Downgrade...

    by seevalue2020 Nov 17, 2014 5:41 PM
    biblioguy biblioguy Nov 20, 2014 6:07 PM Flag

    My only connection to ODC is as an outside shareholder. How long have you owned ODC stock? Yes, it is true that ODC only has 2% of the private label (unbranded) scoopable litter market at the present time. However, if you read the CEO's letter in the recent annual report, he makes it quite clear that they will be offering ODC's lightweight scoopable litter as a private label option. My personal opinion is that a number of chains will take them up on this offer, but as for -when- this will happen, I don't know. My guess is that by this time next year, they'll have several accounts buying the lightweight litter for private label.

    This has several advantages over the coarse private label - most of all, a higher sales price. If ODC can add $30 million in revenue from lightweight private label, that could be huge. We'll just have to wait and see.

    Biblioguy

  • Reply to

    Downgrade...

    by seevalue2020 Nov 17, 2014 5:41 PM
    biblioguy biblioguy Nov 19, 2014 6:39 PM Flag

    I have to disagree. ODC is not a company that mines a raw material and sells it someone else to process or use - they turn the raw material into products that actually do something, and continually invest in R&D. ODC is the only company with sufficient raw materials to produce theiir own lightweight clay cat litter, and ODC stands to make revenue gains once they grow their market share in the scoopable cat litter private label market.

    Biblioguy

  • Reply to

    Downgrade...

    by seevalue2020 Nov 17, 2014 5:41 PM
    biblioguy biblioguy Nov 18, 2014 11:38 AM Flag

    I pay no attention to these type of reviews. Glad to see that despite your concerns, you'd like to buy more ODC stock at the right price.

    I received the annual report on Friday, and for once I actually liked the CEO's letter to shareholders - it explained 2014 results, and gave us a good idea of what the company is planning to do going forward. The potential for growth by expanding into the scoopable private label business is quite good. I think ODC is the only clay manufacturer able to produce lightweight litter on such a huge scale. Plus, my guess is that private label lightweight scoopable, may even be more profitable for ODC than lightweight Cat's Pride scoop litter - because ODC has to advertise and provide marketing support in the form of coupons, for their branded litter.

    Biblioguy

  • Reply to

    Investor's must be smoking Fresh and Light

    by sfiaes Oct 16, 2014 5:00 PM
    biblioguy biblioguy Oct 17, 2014 9:19 PM Flag

    As best I can tell, ODC has the only lightweight litter made only from clays. The Tidy Cats lightweight litter entry is so light, that many people in reviews say that the cats track the litter around the house. I've checked the Tidy Cats website, and the reviews used to be chronological in order. Now it seems that the reviews are organized so that more favorable ones appear first. Plus, the Tidy Cats lightweight litter is ridiculously expensive - they will not attract much of a market at that price point. The Fresh Step lightweight litter is just hitting shelves now, so we'll see how that does. I wonder what, if anything, Church & Dwight is going to do about a lightweight litter product?

    Biblioguy

  • Reply to

    Investor's must be smoking Fresh and Light

    by sfiaes Oct 16, 2014 5:00 PM
    biblioguy biblioguy Oct 17, 2014 8:43 PM Flag

    By far the most interesting part of the CEO's dissertation on the conference call, was when he talked about the possibility of providing the lightweight litter, as a private label option. That could be huge. As he said, ODC has a strong percentage of the coarse private label market, but that is a declining category of litter, and I'm guessing the revenue is about $150-$200 per ton. I'm sure if ODC offered private label customers the lightweight litter, the revenue would be significantly greater than $150-$200 per ton.

    As far as the conference calls being only half an hour, I think the problem is that there are rarely any new participants asking questions. If you have serious questions to ask, I would encourage you to get on the call and ask, so that the company is persuaded to lengthen the conference calls.

    Biblioguy

  • Reply to

    Investor's must be smoking Fresh and Light

    by sfiaes Oct 16, 2014 5:00 PM
    biblioguy biblioguy Oct 17, 2014 12:52 AM Flag

    I'm as surprised as you are that ODC is up nicely this week, but I'm certainly not going to complain about it. Perhaps people who sold prior to the earnings release, driving the price down, were pessimistic, and now that the uncertainty around Q4 earnings is gone, people are buying again???

    Regarding price/book value, ODC's book value is understated, as the value of their reserves on the books is at the original purchase price, and not the value today. Cat litter may be considered a commodity product, but many of ODC's other products are not commodity products.

    Biblioguy

  • Reply to

    will common get anything?

    by energybiz84 Oct 13, 2014 9:42 AM
    biblioguy biblioguy Oct 13, 2014 11:27 AM Flag

    Whether common stock holders will get anything coming out of bankruptcy is a worthwhile question, but I am not yet certain of the answer yet, to invest at this point. It's possible that one reason the new board filed for bankruptcy, is to be able to break leases at stores they want to close. I've only been to one ALCO store, back in May in Perry, Iowa. There was a newer and nicer Shopko store not far away, and I'm not sure there is room for two stores in such a small market. That said, some of ALCO's stores seem to be doing well, such as the newer stores in North Dakota, near oil boomtowns. Considering the investment by the activist shareholders, they do have an incentive to see that shareholders get something when exiting bankruptcy, but that may not be possible in the end.

    Biblioguy

  • Reply to

    some recent news

    by algo41 Oct 6, 2014 10:00 AM
    biblioguy biblioguy Oct 10, 2014 3:45 PM Flag

    In my experience, ODC generally avoids an earnings release on federal holidays, so it should appear this evening. I don't think there's any hold up on the earnings release. ODC decided a few years ago to delay the earnings release/conference call until after the 10-Q/10-K has been filed. That said, I really have no idea what to expect as far as Q4 earnings go.

    Biblioguy

  • Reply to

    some recent news

    by algo41 Oct 6, 2014 10:00 AM
    biblioguy biblioguy Oct 8, 2014 11:10 PM Flag

    Earnings will be released this Friday after the market close at 4:00pm.

    Biblioguy

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