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Olin Corp. Message Board

equity_360 155 posts  |  Last Activity: 6 hours ago Member since: Mar 29, 2013
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  • equity_360 equity_360 6 hours ago Flag

    Yes, Debney is a top tier manager. He does have the ability to make an acquisition... If swhc wants to stay in the $15 ++ price range, they have to make an acquisition, or face acquisition.

  • Looks like the shorts covered in the last half of june...they were essentially covering while no one was caring...

  • Reply to

    So what is it?

    by equity_360 14 hours ago
    equity_360 equity_360 12 hours ago Flag

    Since money is fungible, who is to say that some or none of the newly raised money will be used for the $27 million buyback. As such, they had to list buybacks as one of the uses of the proceeds. Note that the statement of uses declares that it can be used for anything, just to cover all bases, legally.

    That all said, they can increase the buyback authorization. I think they did not increase because there was good potential for some other use.

  • Reply to

    So what is it?

    by equity_360 14 hours ago
    equity_360 equity_360 13 hours ago Flag

    Buyback authorization not high enough to use $75 million. I think there is only $20 million left in buyback

  • Short covering or the buyback? Something is spurring this growth in pps. If the shorts are so sure that the pps will collapse, then they would wait just a liittle bit longer. Same goes for the buyback...

    So, why is the price going up so soon after the "dreadful" earnings release?

  • I thought this was going to$7

  • I do not think that the sporting group is going to get spun off in time...

  • Reply to

    Anyone know what Colts debt is selling for?

    by tjpatroit Jul 21, 2014 3:20 PM
    equity_360 equity_360 Jul 21, 2014 6:09 PM Flag

    Its even simpler than that, but the info is hard to get. Distressed debt is traded like pork bellies. My guess is the unsecured is 50-60% of par

  • Reply to

    When do the fireworks begin, Dad?

    by equity_360 Jul 21, 2014 10:18 AM
    equity_360 equity_360 Jul 21, 2014 3:16 PM Flag

    Colts debt is crazy high at $300,000,000.00. It has union contracts and other baggage. The unsecured sr debt is $250,000,000 if i recall, and recntly they got another secured strip at $50,000,000. Obviously the company has too much debt with no hope of repayment, and AR demand is slackening. So where is the hope?

    Potential covenant violations are looming. The lenders have to be looking for an exit, and a 363 (bankruptcy) sale would be a likely mecanism. In the alternative, a buyer could buy up all the debt and then foreclose, but a prepackaged chapter 11 is just a neater process. Swhc has the technology to make colts production and likely can do it cheaper. Swhc has stated that it intends to make acquisitions for growth. So lets see how it shakes out.

  • Reply to

    When do the fireworks begin, Dad?

    by equity_360 Jul 21, 2014 10:18 AM
    equity_360 equity_360 Jul 21, 2014 1:09 PM Flag

    Hey. I am looking at colt as it is in really bad shape right now, before anything further decline in sales. AR sales are in the tank and the june quarter is going to be a stinker for ARs. Colt has an alarmingly high inventory. They better come up with something fast. Perhaps they can sell out when all the wars kick into high gear, but i would not count on it. Colt computes its bank covenants on a rolling 12 month basis. They just might default with the june numbers release. So, looking realistically at the colt situation, i would expect some sort of transaction prompted by the lenders before the lenders lose any more value. I think they know they have a stinker on their hands.

  • This is the time in the cycle where some players realize they should have sold, where great numbers are dissappearing and are no longer able to hide poor management. Where demand can fall off the table,,,,where everyone says oh sh...... Swhc is not in that category, but there are many who are. There is no doubt that swhc will make a meaningful strategic play soon.

  • Reply to

    Colt takes a dump...

    by equity_360 Jul 20, 2014 12:57 PM
    equity_360 equity_360 Jul 21, 2014 9:23 AM Flag

    For all the talk about swhc, Colt is probably the next big deal in the space. It looks like the bottom is falling out with the release of March numbers. The 2nd quarter is always very slow for long guns, so i would expect colts numbers to go further into the tank. The unsecured creditors have to be worried at this point as a normal sale will result in a loss, most likely. The company value is impaired by the union contract, ancient manufacturing techniques, and some other legacy garbola. What spooks me most is that some key people have fled the coop recently. ....and those inventory balances! Inventory on a relative basis, is three times higher than swhc!

  • Colt Defense 8.75% senior unsecured notes have traded at all-time lows on Friday following the company’s loss of a long-term contract and a subsequent announcement by Moody’s that it will place the gun maker on review for a downgrade, according to trade data.

    The $250 million issue of CCC+/Caa1 notes, placed in November 2009 via J.P. Morgan and Morgan Stanley as part of a loan-and-bond refinancing effort, traded as low as 57 Friday and Thursday, according to trade data, down from the mid-60s at the start of the month.

    The Army Contracting Command gave a lucrative contract worth $84 million for producing up to 120,000 M4/M4A1 carbine rifles to Remington in Ilion, N.Y. The Moody’s report described the loss as a “significant setback,” as Colt had historically been the sole supplier of M4s to the U.S. Army, its largest customer. However, Colt has become less dependent on sales to the U.S. government, with such sales accounting for 33% of fiscal 2011 revenue, versus 60% in fiscal 2009, Moody’s noted.

    Colt Defense has turned around to file a protest of that award with Government Accountability Office, according to the GAO.

    Colt Defense was split off from 160-year-old Colt’s Manufacturing in 2002. Colt’s Manufacturing now serves the civilian market, while Colt Defense serves the law-enforcement, military, and private-security markets worldwide. The company is controlled by Sciens Capital Management, and Blackstone Group joined with a $30 million equity stake alongside a dividend recapitalization in 2007

  • Reply to

    Colt takes a dump...

    by equity_360 Jul 20, 2014 12:57 PM
    equity_360 equity_360 Jul 20, 2014 1:21 PM Flag

    3/2014 $ 77 million
    12/2013 $ 67 million
    12/2012 $40 million
    12/2011 $36 million

    ...absorbing alot of overhead costs into inventory..... I am starting to get dizzy.

  • Reply to

    Colt takes a dump...

    by equity_360 Jul 20, 2014 12:57 PM
    equity_360 equity_360 Jul 20, 2014 1:08 PM Flag

    OOOF! Take a look at the terms of this COLT note: LIBOR PLUS 9.75% and it SOLD AT A $2.3 Million DISCOUNT... That my friends is not typical of a healthy company

    On July 12, 2013, in connection with the Merger, we entered into the Term Loan, which matures on November 15, 2016. The Term Loan bears interest at a variable rate of 9.75% plus the greater of the 3-month LIBOR rate or 1%. Interest is payable quarterly in arrears on the first day of the subsequent calendar quarter. Under the Term Loan, our obligations are secured by a first priority security interest in our intellectual property and a second priority security interest in substantially all other assets. The Term Loan was issued at a discount of $2.3 million from its principal value of $50.0 million. We also incurred $2.0 million in financing fees. The discount and the financing fees are being amortized as additional interest expense over the life of the indebtedness. Principal repayments, which are due quarterly on the last day of each calendar quarter, are as follows ($ in thousands):

    The Term Loan agreement contains financial covenants including a minimum EBITDA threshold, a fixed charge coverage ratio and a maximum secured leverage ratio, each as defined by the Term Loan agreement. In addition, we cannot exceed specified levels of capital expenditures. All financial covenants are calculated on a rolling 4-quarter basis based on financial results for the current and three preceding fiscal quarters. We were in compliance with our debt covenants as of December 31, 2013 and we monitor our future compliance based on current and anticipated financial results. The Term Loan agreement also contains non-financial covenants that limit our ability to incur additional indebtedness, make investments or certain payments, pay dividends (other than for the payment of taxes to Colt Defense’s members) and merge, acquire or sell assets.

  • equity_360 by equity_360 Jul 20, 2014 12:57 PM Flag

    March 2014 quarterly sales off 26% from March 2013.

    March 2014 sales $50,080
    March 2014 Net loss $7,828

    March 2013 sales $63,849
    March 2013 Net income $5,070

    The company also reports about $260 million in NEGATIVE TANGIBLE EQUITY. The company is controlled by an equity fund... Several directors/officers have left the company in recent months. Colt might be lining itself up for a breach of covenants soon, as its debt coverage is getting thin. Thank god for rolling 12 month covenants! Colt might have to go into the tank (bankruptcy) to clean off the debt. At this point, its debts far exceed any takeout valuation, so a BK might be the answer. Some lucky bidder will take the assets in 363 sale.

    Who gets the spoils? Colt likely has some ancient manufacturing techniques and equipment, so there may be an opportunity for a technologically savvy company like SWHC to make vast improvements. Colt, like smith, is on the upper end of the AR market. However, SWHC might have to install an electric motor in CT to replace the water driven apparatus.

  • Reply to

    I would like to discuss the following:

    by equity_360 Jul 17, 2014 11:09 AM
    equity_360 equity_360 Jul 18, 2014 4:02 PM Flag

    ...or not. Atk may be willing to break it up.

  • Thanks to our fearful leader. I hope john kerry takes a flight across the ukraine.

  • Is it smart for atk to own firearms manufacturing and an ancilliary products business?

    I speak directly to bushnell division. Bushnell products go on any rifle, and until atks acquisition of bushnell, competing manufacturers may have been more inclined to form association with atk. Now, they are feeding a competitor in savage. So, should a firearms company go horizontal? Should atk bust out savage?

    Should atk stick to bullets and riflescopes?

    When will we experience the second coming of Dat?

  • Buyback is about over...maybe $20 million left in authorization.....

    Maybe they are going to buy........savage? Remington?

    Swhc has developed a knack for marketing,,, they are being copied in certain situations.

    Something meaningful is coming up.

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