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The Active Network, Inc. Message Board

cohsgrad 134 posts  |  Last Activity: 5 hours ago Member since: Feb 27, 2000
  • Reply to

    Truly sad

    by anomolypursued Sep 29, 2014 4:29 AM
    cohsgrad cohsgrad Sep 30, 2014 4:33 PM Flag

    Would add that they have obviously declined a great since the acquisition proposal so it isn't obvious or even likely that they can do a transaction at this point in time.

  • Reply to

    Truly sad

    by anomolypursued Sep 29, 2014 4:29 AM
    cohsgrad cohsgrad Sep 30, 2014 4:25 PM Flag

    Agree with your statement regarding merchandising and fact that holidays will be rough for them. A marginal business can't show huge negative operating trends such as they have.

    Why didn't folks vote to support the acquisition?

  • Reply to

    Late 10-K

    by cohsgrad Sep 25, 2014 9:41 AM
    cohsgrad cohsgrad Sep 30, 2014 9:19 AM Flag

    90 days since year-end. Things must really be out of control.

  • Reply to

    Alco as a small town store

    by dkwilk Sep 26, 2014 10:18 PM
    cohsgrad cohsgrad Sep 29, 2014 12:37 PM Flag

    The Dollar stores have certainly done well and I would have said there was no way they should succeed. Obviously merchandising is a problem but I wonder about distribution too and that isn't a problem that can be fixed without substantial expansion which obviously isn't going to happen.

  • Reply to

    Truly sad

    by anomolypursued Sep 29, 2014 4:29 AM
    cohsgrad cohsgrad Sep 29, 2014 9:18 AM Flag

    I don't see any reason to think that they will turn it around. Go through their old annual reports and there is just nothing but talk of a turnaround for the last decade. That is through multiple management teams.

    At some point in time one has to face the fact that it just isn't working and try to evaluate the alternatives. Maybe there are alternatives but I'm sure not aware of them. The best hope seems to be to manage to get to break even at some point in future following which they will generate significant losses.

  • Reply to

    Alco as a small town store

    by dkwilk Sep 26, 2014 10:18 PM
    cohsgrad cohsgrad Sep 29, 2014 8:39 AM Flag

    Have you compared their prices and assortments to dollar stores? I'm not much of a shopper so if that is a stupid question I'm sorry.

  • Reply to

    no judge going to let them sign for bankruptcy

    by stangbark Sep 26, 2014 10:44 AM
    cohsgrad cohsgrad Sep 26, 2014 11:00 AM Flag

    Assuming inventory could be liquidated at cost they could pay Wells Fargo but they would then have to pay $119 million to cover future lease obligations. That liability isn't recorded on the books as they are operating leases.

  • Reply to

    They hired Houlihan Lokey?

    by belco_mc Sep 26, 2014 7:54 AM
    cohsgrad cohsgrad Sep 26, 2014 8:47 AM Flag

    o.k. look who is accusing someone of providing skewed information. Look the firm up. They specialize in restructurings. Doesn't mean they are definitely going bankrupt but it is a pretty good indication that it could happen.

    Whatever happens happens and you are not posting anything of value.

  • Reply to

    overhaul the balance sheet?

    by belco_mc Sep 25, 2014 9:00 PM
    cohsgrad cohsgrad Sep 25, 2014 10:29 PM Flag

    You are ignoring the lease liabilities that aren't on the balance sheet as well as the fact that they are losing significant amounts of money every quarter.

  • cohsgrad cohsgrad Sep 25, 2014 9:05 PM Flag

    Those activists also are not buying shares.

  • cohsgrad cohsgrad Sep 25, 2014 9:03 PM Flag

    Yes as a matter of fact I have read their financials. Drawing down inventory is not a business strategy.

    The activist shareholders are (1) selling (Michael Price-8.1%) and (2) indicted for fraud (Everbright-17.4%). There are others but I don't know much about them other than that they didn't own many shares and are now collecting fees for operating the company.

  • cohsgrad cohsgrad Sep 25, 2014 6:29 PM Flag

    and if they can't they want to file a pre-packaged bankruptcy. If they can't do that they will let a bankruptcy court sort it out.

    They are in a liquidity crisis. Those frequently lead to bankruptcies. Retailers with significant lease obligations have to go the bankruptcy route even without immediate liquidity issues.

  • cohsgrad cohsgrad Sep 25, 2014 5:40 PM Flag

    Given our negative cash flows from operations and in order to meet our expected cash needs for the very near term and over the longer term, we will be required to obtain additional liquidity sources, consolidate our store base and possibly restructure our debt and other obligations. We are exploring alternatives and anticipate engaging in discussions with third parties as well as our key financial stakeholders, including our existing lenders, stockholders and landlords, in an effort to create a long-term solution. Alternatives include the issuance and sale of debt or equity, the sale of our inventory or assets, as well as both in and out-of-court restructuring. We are evaluating all of our alternatives to restructure existing debt terms and other arrangements to provide additional liquidity. There can be no assurance that we will be able to successfully implement a long-term solution.

    If acceptable terms of an out-of court transaction cannot be accomplished, we may not have enough cash and working capital to fund our operations beyond the very near term, which raises substantial doubt about our ability to continue as a going concern. As a result, we may be required to seek to implement an in-court proceeding under the United States Bankruptcy Code (“Bankruptcy Code”). If we commence a voluntary reorganization under the Bankruptcy Code, we will attempt to arrange a “pre-packaged” or “pre-arranged” bankruptcy filing. In a “pre-packaged bankruptcy”, we would make arrangements with new and existing creditors for additional liquidity facilities and the restructuring of our existing debt terms, before presenting these arrangements to the bankruptcy court for approval. In the absence of a “pre-packaged” bankruptcy, we would consider a “pre-arranged” bankruptcy filing, in which we would reach agreement on the material terms of a plan of reorganization with key creditors prior to the commencement of the bankruptcy case. An in-court restructuring proceeding would cause a default on our debt with our current lenders. Our fiscal year ends on the Sunday nearest to January 31. Fiscal years 2015 and 2014 consist of 52 weeks, further consisting of four thirteen week periods, with each period referred to as a quarter. The thirteen week periods ended August 3, 2014 and August 4, 2013 are referred to herein as the second quarter of fiscal 2015 and 2014, respectively.

  • Reply to

    Buyout on the horizon

    by davismichael825 Sep 25, 2014 11:03 AM
    cohsgrad cohsgrad Sep 25, 2014 5:34 PM Flag

    Not here. If they were all located in a small area and they could plug them into an existing distribution system I'd say it is a long-shot but here it is an impossibility given the store locations and a number of other reasons. Maybe someone else will buy them but I don't know who it will be.

  • cohsgrad cohsgrad Sep 25, 2014 5:19 PM Flag

    It is in the latest 10-Q.

  • Reply to

    Buyout on the horizon

    by davismichael825 Sep 25, 2014 11:03 AM
    cohsgrad cohsgrad Sep 25, 2014 5:18 PM Flag

    Yea I think you are right. It has been a few years since I lived in one of those towns but we had to drive two and a half hours to get to a Walmart and we'd do it fairly regularly.

    I can remember wondering how they survived but I've thought that about the dollar stores too so I tend to think that if they could merchandise it properly they might be able to survive. Having said that, they are serving out of a single distribution center so it is probably a pipe dream.

  • cohsgrad cohsgrad Sep 25, 2014 4:21 PM Flag

    Certainly an element but what about the company saying they want to file a pre-packaged bankruptcy? That might have something to do with it.

  • Reply to

    Buyout on the horizon

    by davismichael825 Sep 25, 2014 11:03 AM
    cohsgrad cohsgrad Sep 25, 2014 4:15 PM Flag

    Yea I misspoke. Should have said Walmart Express which is 15K size. Walmart isn't part of the picture here.

  • Reply to

    Buyout on the horizon

    by davismichael825 Sep 25, 2014 11:03 AM
    cohsgrad cohsgrad Sep 25, 2014 4:11 PM Flag

    While you are right about book value, they have operating leases that aren't recorded on the balance sheet of $119 million plus leasehold improvements of around $20 million that they can't really sell.

    The bankruptcy threat has to be primarily aimed at the landlords because the banks do have the inventory that they can liquidate in a pinch to get most of their money back. If anything was left over the lease holders would get most of it but I don't think there would be much left in a liquidation scenario. Certainly nothing for common shareholders.

    As a going concern there might be some assets available for common shareholders but it is hard to say.

  • Reply to

    Buyout on the horizon

    by davismichael825 Sep 25, 2014 11:03 AM
    cohsgrad cohsgrad Sep 25, 2014 3:44 PM Flag

    The question to ask is whether or not the asset values exceed the debts including operating lease liabilities. The difference between $2, $3 or more is small from the perspective of a buyer.

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