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Westport Innovations Inc. Message Board

ejschultheis 32 posts  |  Last Activity: May 30, 2015 7:26 PM Member since: Oct 3, 2000
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  • ejschultheis ejschultheis May 30, 2015 7:26 PM Flag

    I still think that RWC would be a good fit for TASR. They both chase the same clients and TASR could argue that they could purchase both the relm radios and taser body cameras for the same price as a Motorola radio. Synergies and growth for a combined company. Taser stock would be a cheap currency to complete the transaction.

  • bringing total to 13.1% of outstanding shares.

  • It may be enough for a bounce in the stock back to the 6-8 range. Many shorts may have been betting that the company would not survive (they may be right). The latest release provides some breathing room for the company to maneuver its finances and hopefully provide another few quarters to produce cash flow to pay down some of these loans. The company based upon core earnings may be worth about $20 a share but subtract the debt and potential suit liabilities and I would think at this time you would be hard pressed to get to 6 or 8. The shorts are down nearly 100% today. Some will cover but I expect most to play out the the long term uncertainty.

    Small position but fun to watch.

  • COMPANY indicated that they expect earnings by month end. The fact they haven't released them by now indicate to me that the earnings will disappoint and will be released after the close on Friday, or worse yet, not be released by month end.

  • Thats more than 5% of outstanding but still no SEC filing.

  • Reply to


    by freetzwilly May 16, 2015 2:46 PM
    ejschultheis ejschultheis May 18, 2015 6:59 PM Flag

    read the loan document (december 4 or 5 ) sec filing.
    They repaid about 86mm revolver and knew they would pay 60-70 mm in peaks loans. If you read other filings you see that they have to add about 140mm in other than PEAKS loan guarantees to the balance sheet. This is the delay and the reason they are 6 months behind their filings. These credit union loan guarantee losses above 35% and the actual losses have been in excess of 61%. Total losses from these off balance sheet loan guarantees may be near 50mm ( 61% -35% )* 190mm initial loan amount.

  • Reply to


    by freetzwilly May 16, 2015 2:46 PM
    ejschultheis ejschultheis May 18, 2015 5:54 PM Flag

    ARE YOU KIDDING....Buy back program....

    They Just (December) pledged every asset they have with very onerous conditions. They had to pay 3% up front. over 10% annually 2% pre-pay penalty,
    with limitations on EBIDTA leverage.

    This may be the last loan the company ever gets. Nothing left, no other asset to lend against. Peak loans are over 10% this loan is over 10%. any unexpected loss on PEAKS or other off (soon to be on) balance sheet loan guarantees and this company will violate loan covenants. The lender may be able to demand full repayment with no chance for the company to get additional funding.

    I have a small long position and am just hoping they can survive the next few years and repay some of these loans. Maybe in a year or two they may be able refinance at more reasonable rates and then use the savings to pay off these debts. I think nearly a billion in stock repurchases for a company with $50 million market cap has been enough.

  • ejschultheis by ejschultheis May 13, 2015 11:57 AM Flag

    Writing down the value of PEAKS loans may actually be good.

    What !!!!

    Writing down the value now and actually collecting some in the future may actually have a positive impact for ESI. The peaks loans have interest rates that are over 10%. Cash on the balance sheet earns nothing.

    By writing down the value of the student loan assets the company must repurchase peaks loans to bring the ratio of assets to loans at 1.40 to one. In the 3rd and 4th quarter the company repurchased about 114mm in peaks debt. This should save about 11.5mm in annual interest. In the future if they actually are able to collect on some of these assets they will be able to reverse the accounting entry.

    The downside, naturally, is that they give up their liquidity, which the market values at a premium at this time.

  • Reply to

    $2.00 OPTION

    by ejschultheis May 13, 2015 11:05 AM
    ejschultheis ejschultheis May 13, 2015 11:46 AM Flag

    I don't think they are on the hook for any loans other than the PEAKs loans which were down to 96mm at the end of last year. Do I think some or many of these loans will eventually fail? Sure I do. But at this point I believe that the loans still outstanding will be manageable. They will be a drag on earnings for the next few years but manageable.

  • ejschultheis by ejschultheis May 13, 2015 11:05 AM Flag

    ESI at this time is just a $2.00 call option. Most times options expire worthless but this option doesn't have an expiration date. The company earned over 700mm in the past 10 years and spent it all on ill times stock repurchases. The market cap is now less than $50 mm. I believe that the company with new management could shrink the portfolio of schools to a level that provides the students with a quality of education in industries that will allow them to repay their student loans at a much higher rate than the past few years. This should prove to be a profitable model.

    This is now an option and not a stock. The risk is not an expiration but does the company have the resources to get on the other side. I don't think the government wants to push them to chapter 11 because it will be too expensive if all of the students get the same opportunity that was given to coco students and not repay student loans. On the other hand the government doesn't want to continue to provide loans to a large percentage of students who have no marketable skill to repay the loans. Law suits and government fines will extract much of the current value of the company and lessen the chance for success but I believe that they may be able survive.

    I am now willing to bet on this option but won't be upset if it becomes worthless. On the other hand if the company can restructure their portfolio my option could be worth 10-20x what I paid.

    Good Luck
    This is only a bet not an investment

  • ejschultheis ejschultheis May 12, 2015 1:10 PM Flag

    I disagree. Gross margins don't have to expand, but they do have to keep a lid on SG&A. If you look at the income statement on google finance for the last four years. Sales increased about 6mm and SG&A advanced about 600k or marginally about 10% of sales. If Gross margins are 43% and marginal SG&A is 10% then you would expect pre tax 33% of sales falling to the bottom line. If RWC were to go from 31mm to 50mm in sales about 6.25mm falls to the pre tax level (one should assume additional R&D) or about 4mm additional after tax earnings. Earnings of 50 cents would only be a p/e of 11. Too low for the growth.

    You also should factor in the possibility that they get a large contract. Kenwood won a 70mm contract with the dept of state about 2 years ago. These large contracts don't come along very often but Relm has a real possibility of winning one of these contracts.

  • AT PRICES as high as $6.74. I would believe that after the earnings report last night and the drop this morning that they will be buying again under 6.

    I added to positions today (couldn't believe that it dipped down to 5). They just had their best first quarter ever, and indicated that the pipeline of opportunities is full and they hope to convert some of this opportunity in the second and third quarters.

    I already have an over sized position but couldn't resist the discount that was provided earlier today. The stock was down $1.75 from the highs just 6 days ago.

    Good Luck

  • THAN LAST YEARS poor first quarter and kept pace with the margins of the 4th q last year. The first quarter is usually slow but last year it was strong. I was only hoping to match last years good number and we were 11% better. This is a nice start to the year and if we get some of those lumpy contracts this stock could go much higher. It looks as if some of the weaker hands were unwilling to hold thru earnings. Barring any major market sell off this stock should move back toward the highs.

    Good Luck

  • ejschultheis ejschultheis May 1, 2015 11:02 AM Flag

    THIS IS A CUT AND PAST FROM THE 10Q. The numbers in the 10q are in (000) except per share.

    The whole report drops the last 000s

  • page 30 (not 29) of the 10 q

    "payments totaling approximately $64,900 that we made from October 2014 through December 2014 to satisfy our obligations under the PEAKS Guarantee with respect to the increased minimum required Asset/Liability Ratio in the current and prior periods."

    Does this mean they will have a 64mm writedown when the next earnings are released? Also looks as if this eats a lot of their cash.

  • ejschultheis ejschultheis Apr 30, 2015 3:31 PM Flag

    Take a look at page 29 of the 10q

    they paid 64mm in the 4th q so a good chunk of your cash is gone.

  • Reply to

    PEAKS ACCOUNTING ???? Anyone understand this???

    by ejschultheis Apr 30, 2015 12:17 PM
    ejschultheis ejschultheis Apr 30, 2015 2:50 PM Flag

    I understand that ITT guaranteed the peaks but I don't understand the accounting on page 23 of the 10q and then am further mystified by the 64mm payment made in the october-december 2014 quarter on page 29.

    Maybe I should consult an Astronomer and not an Accountant. They have more experience with black holes.

  • Kinda like watching David Copperfield while riding the Cyclone roller coaster.

    I don't know whats good
    I don't know whats bad.

    No wonder why these reports are six months late.

  • about 165000 shares in the quarter. Nice to see SG&A COSTS lower even though sales increased.
    no earnings guidance, lets hope for a good call.

  • Dave Storey CEO and President exercised options on 8333 shares and kept the stock. These options only became ecercisable in March of this year and ran thru 2023. Why would someone exercise options 8 years prior to expiration and keep the shares? TAXES!!! Options are taxed at regular tax rates (39%) on amounts between the exercise price and price when exercised and capital gains rates after (20%) on gains after the exercise. The only reason to exercise this early and keep the stock (and pay the taxes) is because you believe that the stock will soon rise. Gains will be at the lower tax rate rather than a higher rate if you wait and exercise the option at a future date when the stock is higher.

    This is the 5th time in 2 months that insiders exercised options early and kept the stock. Another director exercised 3 blocks in early March and another block last week. All were options that had several years to run and they kept all of the stock. Not the normal, exercise the option and sell the stock that you see with so many other companies.

    The fact that this happens during the quiet period (between two weeks prior to q end and the earnings release date +2 days) lead me to believe that they may expect some good news in the next week or two.

    Good Luck

5.30+0.01(+0.19%)Jun 1 4:00 PMEDT