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AFC Enterprises, Inc. Message Board

cohsgrad 181 posts  |  Last Activity: Oct 22, 2014 10:06 AM Member since: Feb 27, 2000
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  • cohsgrad by cohsgrad Sep 19, 2014 9:49 AM Flag

    about the decline in price is that if it continues and the price gets below $1 it becomes conceivable that someone might agree to buy them. Not sure what that price would be. I've always said around 60 cents would be good which is still quite a ways from here. Greedy I think is around 80 cents which is probably more realistic.

    Only thing the buyer would be purchasing are the distribution channels and those aren't particularly valuable.

  • Reply to

    One good thing

    by cohsgrad Sep 19, 2014 9:49 AM
    cohsgrad cohsgrad Sep 19, 2014 10:37 AM Flag

    Imagine that any buyer would have to pay the management team off in a big way. That is too bad but it seems to be the way that small Canadian firms I have followed over the years work. What really baffles me is why people are always so willing to pay a premium to get taken advantage of. It is like they set out to lose money.

    Who knows, maybe every so often one succeeds enough to justify the risk.

  • Reply to

    quarterly earnings forecast

    by ltetelecom Sep 25, 2014 10:32 AM
    cohsgrad cohsgrad Sep 25, 2014 12:00 PM Flag

    He sounded positive on China sales and everything else under the sun. Only a sucker would believe it without question. They hit guidance which wasn't particularly good.

    One good thing. With the higher share count the loss per share will decline over last year.

  • Reply to

    Best call I've heard in a while

    by shanti.ashwin Aug 8, 2014 11:25 AM
    cohsgrad cohsgrad Aug 8, 2014 12:32 PM Flag

    Raina has a pretty good record. Not perfect but if they lost him I think they would be in a world of hurt.

  • cohsgrad by cohsgrad Sep 25, 2014 9:41 AM Flag

    Going to miss the extension date. I get how difficult it is getting through a system conversion but it isn't like they have difficult accounting issues.

    Good thing Steel Partners is there to prop up the share price.

  • Reply to

    Sprint to go it alone

    by octopop Aug 6, 2014 2:54 PM
    cohsgrad cohsgrad Aug 6, 2014 3:58 PM Flag

    Wouldn't count on Softbank's backing them unless by that you mean issuing more shares. Besides, isn't Sprint abandoning the network that DRWI was a part of due to its economic failure?

  • cohsgrad cohsgrad Jul 24, 2014 5:02 PM Flag

    Can understand the need for the offering and they might as well bite the bullet.

    What I can't understand is the need to mislead investors with this unit garbage. Just sell the shares at whatever price the market will take without warrants and without any ratchet provisions.

  • Valuing the warrant is obviously difficult but I plugged it into a Black-Scholes model with the following values:

    Stock Price $1.80 (was $1.87) prior to deal being announced so I was conservative.
    Exercise Price of Option $2.25 (price is adjustable in certain situations such as follow-on stock offerings but at least there aren't any full-blown toxic elements in this offering).
    Number of years is two.
    Risk-free interest rate 0.5% (.005)
    Standard deviation of 83% (Yahoo beta)

    Value of Call $0.69
    Price of shares $1.80
    Net $1.11

    I don't pretend to know everything about valuing options. The share price has obviously declined far below $1.80 and I didn't do a calculation of the standard deviation (just used Yahoo beta) but I'd say it is probably a pretty reasonable calculation.

  • cohsgrad by cohsgrad Jul 28, 2014 8:45 AM Flag

    Boy they sure do extend good payment terms to their customers. If they could get that under control they wouldn't need to issue shares.

    Really took a big hit in Latin American sales. Don't guess that was a surprise. Made it up pretty much across the board elsewhere. Took another $2 million hit in currency devaluation. Didn't really provide earnings guidance but I'm guessing they'll be break even to mildly profitable.

    No word on number of shares to be issued. Hoping they keep it down to 10 million but can't say it would surprise me if it were 20 million.

    Down around 4% in Israel.

  • Reply to

    Mongolia foreign investment craters 70%

    by navin_r_johnnson Aug 1, 2014 11:53 AM
    cohsgrad cohsgrad Aug 2, 2014 3:43 PM Flag

    Would be nice to have a feel for what the Mongolian people and their leaders think. On the one hand, it is a 100 year mine so they have to plan for the long-term but maybe they don't really want it? Hard to imagine not wanting it but it isn't completely unheard of for people to turn their back on development.

  • Reply to

    o.k. Quarter

    by cohsgrad Jul 28, 2014 8:45 AM
    cohsgrad cohsgrad Jul 28, 2014 9:24 AM Flag

    Projecting revenues of $105 to $150 million as they exit year (in other words, next two quarters). Will range from mildly profitable to around $10 million (after tax). Certainly something negative could happen but I don't see it coming out of South America, the source of their problems over the last year so it would have to be somewhere else.

  • Reply to

    o.k. Quarter

    by cohsgrad Jul 28, 2014 8:45 AM
    cohsgrad cohsgrad Jul 28, 2014 9:15 AM Flag

    Reliance Jio. CRNT is primary supplier. To-date is 80/20. Knew they were supplying them but sure didn't know they were dominating.

  • cohsgrad by cohsgrad Oct 9, 2014 9:27 AM Flag

    That financial status slide sure is misleading. Saying they have access to $40 million in debt is wrong. Excluding inventory provisions when you regularly have inventory provisions from cash flow from operations is wrong.

    As for working capital position, it may be technically correct but its net effect is misleading.

    Just complaining because this looks like information they may be giving to customers. Misleading shareholders is one thing but you can't do that to customers for very long before you get a really bad reputation.

  • Reply to

    Why is greedy right so far

    by beekay425 Oct 21, 2014 7:24 PM
    cohsgrad cohsgrad Oct 22, 2014 10:06 AM Flag

    Just to add one other point, why is it that the share price was up yesterday? Did others have knowledge of the press release that was to be issued?

    Few things are more irritating (fudging is worse) that companies that leak information. It is insider trading folks and it takes place on a regular basis with Dragonwave.

  • cohsgrad cohsgrad Oct 8, 2014 1:38 PM Flag

    Because the banks are first in line in the event of bankruptcy as their loans are secured by tangible assets such as inventory, equipment as well as intangibles such as receivables.

    The bond holders are taking much bigger hits to value than equity holders.

  • Reply to

    How low can this go?

    by topline1 Sep 18, 2014 10:11 AM
    cohsgrad cohsgrad Sep 18, 2014 1:56 PM Flag

    Imagine it is obvious, but zero is possible (maybe even probable) because they took on so much debt to do the ICG acquisition at the peak. Even if they shut down everything that isn't profitable and are low-cost producer that wouldn't be enough unless they earn enough to pay back the debt.

  • Now get the accounts receivable balances under control. They have been out-of-whack for years which one can reasonably attribute to South America but with SA becoming a smaller portion of sales can we start to see some declines please?

  • Reply to

    Late 10-K

    by cohsgrad Sep 25, 2014 9:41 AM
    cohsgrad cohsgrad Sep 25, 2014 9:43 AM Flag

    Not that Steel Partners is doing them any favors. The high share price makes it difficult for them to sell-out which is exactly what they ought to do.

  • 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

    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.

AFCE
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