Thanks for the vote of confidence, PMK. Can you share anything about the national accounts? I heard they have signed a large assisted-living account. I have been seeing more Swisher logos. One was in a highend steak and seafood account in Texas and Florida. Another at a Texmex chain with about 40 stores. Definitely making progress.
July 6 was last day SWSH traded above $1/share. 30 business days from then is Aug. 18, 3 days after Q2 earnings release. THIS FROM NASDAQ: If a company trades for 30 consecutive business days below the $1.00 minimum closing bid price requirement, Nasdaq will send a deficiency notice to the company, advising that it has been afforded a "compliance period" of 180 calendar days to regain compliance with the applicable requirements. Thereafter, if such a company does not regain compliance with the bid price requirement a second 180-day compliance period may be available. A company listed on the Nasdaq Capital Market may be eligible for an additional 180-day compliance period if it meets the market value of publicly held shares requirement for continued listing, all other initial inclusion requirements for the Capital Market, except for the bid price requirement, and provides written notice that it intends to regain compliance with the bid price requirement during the second 180-day compliance period, by effecting a reverse stock split if necessary. Similarly, if a company listed on the Nasdaq Global Select Market or Global Market company is unable to comply with the bid price requirement prior to the expiration of its 180-day compliance period, it may transfer to the Nasdaq Capital Market, so as to take advantage of the additional compliance period offered on that market. Such a company must meet the $1 million market value of publicly held shares requirement for continued listing, and all other requirements for initial listing on the Nasdaq Capital Market (except for the bid price requirement), and provide written notice that it intends to regain compliance with the bid price requirement during the second 180-day compliance period, by effecting a reverse stock split if necessary.
Of course there is fear of a #$%$ storm. Why else would a company with sales of $10/share trade for less than $1/share. An average price for a run-of-the-mill company is 1X sales. Good news will come in three weeks from 2Q results as the shareholder meeting approaches. Would I buy a stock for $1 that has a book value of $4, profitable divisions and a chance for a turnaround? You betcha, especially if their base of employees are committed, and that is what I have learned. SWSH sold their southern linen business for 1.3X book. There are other divisions more attractive to potential buyers in the event of a wind down. My criticisms have been that management had unrealistic expectations of the amount of time. Nonetheless, I am long and look forward to their August report.
Reading between the lines, most of the posters on this bulletin board, including Harry, Brian, Ed Blue, SirFact and Spear are former owners or management of businesses purchased by SWSH. Their motive is to bash current management, board and shareholders to seed concerns of bankruptcy to drive down the value of the stock and their former units. Three reasons: 1) repurchase their businesses for a small fraction of their original value, 2) spirit away key employees or customers to competing enterprises, or 3) exact revenge on SWSH for purchasing their businesses for shares not cash. Extensive discussions over the weekend (7/11-12) with current employees at SWSH indicate great strides are being made to integrate the company into a national organization. New national accounts are being won. New employees are being hired. Operations are improving. Employees are focused on a bright future and expect improving results going forward.
This is not rocket science. There are profitable divisions. The simple answer early 2014 when Pierce took control was to shutdown all but the profitable units and eliminate the corporate overhead. Instead, mgt and board held onto the hope of becoming Ecolab II. Pierce did not and apparently does not appreciate the urgency of the situation.
Still no word from mgt as share price sinks. No reason to believe price won't fall beneath $1/share before Aug 14 shareholder meeting. Perhaps mgt's objective is to let SWSH sink into OTC hell so they can buy SWSH for nothing. 30 days below $1/share and NASDAQ will delist SWSH. We shareholders have got to take a more active role. I will attend the Aug 14 mtg and hope it is crowded with concerned shareholders expecting answers.
Not surprisingly, SWSH hit a new price low. For five years management and the board have destroyed shareholder wealth by an average 56% per year. The only solution for us shareholders is to call or write management to demand they sell the profitable units now and shutdown the rest of the company, distributing the proceeds to us shareholders. We might get $4/share. Every day Swisher remains in the control of management and board it diminishes this value. Only new owners, management and board will be able to convince employees, customers, and competitors that Swisher has a future beyond bankruptcy.
Good luck, SWSHIMRICH. I vote for you for investor relations. Lord knows this company could use a double shot of adrenalin. Customers need confidence. Employees need confidence. I hope you cash in a huge win!
This may explain why SWSH moved to liquidate its linen business to boost cash: A deposit account control agreement (DACA) is a document in which a debtor and bank maintaining a deposit account (depositary bank) agree to the handling of funds. The document “perfects” a security interest in a debtor’s deposit account in favor of a secured party under the UCC. DACAs are used to facilitate “springing” mandatory prepayment requirements, providing absolute control of the account when “triggering events” including default occurs. SWSH may have escaped this one with only a hand slap of $35,000. Maybe we'll see a press release later.
After mentioning one, possibly two new major accounts in the Q4 call, management didn't mention anything in this latest call. I guess the accounts didn't work out. Neither did they mention when to expect the proxy statement or provide any details on the "Springing DACA" event. Pierce no longer states Q2 will be cash positive. For an executive who makes $260K/yr, Blake Thompson needs a remedial reading course. He was barely understandable. No analysts were on the call. I guess everyone has thrown in the towel.
No discernible improvement in EBITDA losses for trailing 5 quarters:
We have just $3.8 million of unrestricted cash on the balance sheet and $5M in available credit, assuming the "springing DACA event" didn't default the agreement. 2Q15 is make-or-break time!
The board of directors is entirely comprised of insiders. There are no independents. This is killing us shareholders. When the proxy comes out, we'll have 30 days to identify two independents and rally shareholders to vote them in. More to come.
Thanks. I note the lender is to receive a $35,000 bonus (0.7% for the $5M drawn down thus far) for SWSH's blunder into this "springing DACA event." Why are we shareholders paying a CFO, CAO and chief general council if mgt can't live up to a loan agreement and conduct its accounting on time? We shouldn't have entered the loan agreement to begin with. Mgt should have cut the unprofitable businesses faster and harder to neutral cash flow. Instead, they gave themselves raises.
Are management and board hiding the annual meeting? Last year's occurred May 15. No announcement is made in the amended 10-K with proxy of when or where the meeting will occur. No proxy statement has been filed. This smells very fishy. Why are management and the board at war with their shareholders?