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UniTek Global Services, Inc. Message Board

per_a.jacobsen 327 posts  |  Last Activity: Jun 6, 2014 5:47 PM Member since: May 21, 2013
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  • per_a.jacobsen by per_a.jacobsen Jun 6, 2014 5:47 PM Flag

    All,

    Ok, I am mystified....

    Is it really possible to spend a lot of energy on a message board saying that the CEO of a company is, well money-grabbing, self-serving, and incompetent (and do I remember the term senile being thrown in as well in an earlier rant?,) and then call the company and ask why the per share price is low?

    I mean, can you actually expect anything else than a low per share price if the CEO is indeed this sort of person? Doesn't the rant suppose the answer to the question?

    More importantly ,however, is the question of whether it probable that the company would engage with a person that speaks that way about its CEO in public?

    I can see a representative for the company maintaining politeness and giving an empty answer, but I certainly can't see such representative actually taking the conversation seriously -- and, yes, of course there is the issue with sharing information that is not public, which, also, I guess would, at best, lead to a polite non-answer.

    I, for one, would like to know who in the company actually had such a conversation with an outsider.

    Just wondering...

    pajacobsen

  • All,

    So the per share price made a nice mini recovery today, which is great news after the market's silly reaction (I say silly because I have now been with Unitek long enough to see this up and down many times, and, frankly, the per share price has nothing to do with the company''s value.) Silly comments aside, the company's recovery has been marked and remarkable.

    The conference call on the other hand was, in my opinion, quite bad, with the CFO sounding -- well -- mousy, tinny, beaten-down, and disengaged, and the CEO rumbling about a number of things that most shareholders probably will not care about (although they were important things,) talking very little about the things that matter to most investors (recouping the money from the earn-out, for instance, and the outlook for new business and refinancing,) and ending the call on the same note as last time, by not taking any questions (something that I personally find both presumptuous and rude -- but, what do I know, perhaps that is how things are done at UPS -- although, of course, this is not UPS, but rather a company that should be catering to its long term investors.)

    Best,

    pajacobsen

  • All,

    As expected, the company's first quarter reflected a massive loss with no indications that this loss will not continue through the next many quarters and with adverse impact on the cash position. Had the company acted early last year, immediately reducing the expenses, this could have been avoided.

    As it is, the company decided to double down, selling its way out of the crisis (including the sale to some really unstable customers,) which unfortunately was a very bad decision that effectively only served to accelerate the loss.

    The CEO is now gone, and the company is in open crisis, with each passing month bleeding the company out the in the same way that Jacada bled out over a couple of years.

    All this was predictable, but with all the speculative noise, partly because of misleading Seeking Alpha articles and postings by so called newsletters and ignorant investors and traders, the company refused to face the music.

    So this is now playing our, starting with the search for a new CEO and, without a doubt, significant expenses related to severance and acquisition of the new CEO, and, therefore, an increased rate of expenses.

    What needs to be done is simple: An immediate reduction in expenses, including a reduction in the US operations and in corporate overhead; the immediate firing of the person responsible for public relations and investor relations, who, frankly, has shown to be highly incompetent; a deferral of the hiring of a CEO; and an acceleration in the pace of the M&A activities. Whether or not the board of directors has the clarity of vision to follow this simple path is unknown, but its past action does not fill me with confidence.

    The only question on this board is where CAss is. We will never know, I am sure.

    Best,

    Pajacobsen

  • All,

    The Q1 results were, of course, disappointing, albeit not surprising given the overall slowdown in the cable business over the winter months, and given the end-of-life AT&T contracts that the company warned about quite a while ago.

    However, looking at the detail, I was actually quite pleased.

    First, because the silly, funny-money goodwill impairment, which has no real meaning, accounted for a full $10 million of the loss, and, so, was really distorting the results.

    Second, because, overall, although the top-line moved down, the overall business looked good, and the company appeared to be in the process of becoming leaner -- something that all owners appreciate, I think.

    Third, and this is the biggie, because the move of $25 million from long term loan to current loan on the balance sheet will force, I think, the company to accelerate its refinancing efforts (and I want to see the refinancing, the last step in the recovery, to happen ASAP.)

    Generally, I continue to see only the loan as the issue, and, so, the refinancing will be the thing needed to push the company back in investors' favor, leaving all of last years nonsense behind us.

    Overall, quite OK results -- although, of course, Zachs and its junk analysis distorted the information quite a bit.

    Note: It would, of course, also be nice to, at this stage, see us recoup the money from the earn-out, since this amount, in itself, could take care of the $25 million current portion of the loan and could put the company in a better situation with respect to the refinancing.

    Best,

    pajacobsen

  • Reply to

    Just a Thought

    by steinstanley May 13, 2014 1:33 PM
    per_a.jacobsen per_a.jacobsen May 14, 2014 12:54 PM Flag

    BRKen,

    Yes, it can swing either way.

    It is basically impossible to say at this stage. However, since the timing horizon (if the merger locks in that is) is well beyond the timing horizon for the refinancing, which is now, I think, forced to accelerate in view of the the $25 million becoming current debt as of last quarter, I don't think that the merger event is important at the moment.

    Best,

    pajacobsen

  • per_a.jacobsen by per_a.jacobsen May 12, 2014 2:26 PM Flag

    All,

    So, the quarterly earnings announcement is coming up!

    The important facts remains the same, so it will be interesting to see how the market reacts now that the situation will be reflected in the numbers:

    1) The company lost its Simple Mobile contract, accounting for $3.6 million in revenues per year (that's 33% of the total revenues) and substantially all of its margin -- and -- the company's other business, including TEM, declined a full 17.5% in the year.

    2) The quarter will be the first quarter without the "free" Simple mobile revenue and cash. The impact should be obvious to anyone who can use a calculator.

    3) There is a real risk that investments in MTSL, no matter how short time the stock is held, will be classified as an investment in a passive foreign investment company, with adverse tax consequences for the investor.

    Regards,

    pajacobsen

  • Reply to

    What exactly happened?

    by craigleemorgan May 7, 2014 11:58 AM
    per_a.jacobsen per_a.jacobsen May 7, 2014 1:10 PM Flag

    Craigle,

    It think the answer is that there was an (unrealistic) expectation that cost-efficiencies on the supply chain for Hudson's would kick in immediately (instead of over two to three quarters) *and* the Else brand (which is now an unqualified disaster) depressed Joe's Jeans' core results.

    Also, there was a rolling back by the company of the proxy part that would pay for the Hudson acquisition through the issuance of shares, so that the acquisition is now funded through debt. The irony of this decision impacting the share price is, of course, that the original decision to fund the acquisition through paper spooked the market (which as you know generally don't understand why issuance is not dilutive if you get offsetting value,) but the subsequent reaction by the company to this spooking actually spooked the market further -- sometimes you just can't win.

    The quarter demonstrated, btw, that even with near-zero supply chain efficiency from the merger and with the Else brand going down in flames, Joe's Jeans is capable of handling the debt burden.

    Best,

    pajacobsen

  • Reply to

    DTV / T

    by collectoman23 May 1, 2014 3:00 PM
    per_a.jacobsen per_a.jacobsen May 2, 2014 12:50 AM Flag

    Collectoman,

    That is a really good question, and there is also the DishTV transaction that is in play.

    It can swing any which way, I think, but it might not matter, because of the time horizon relative to the refinancing.

    Best,

    Pajacobsen

  • Reply to

    Yahoo has certainly lost control

    by per_a.jacobsen Apr 29, 2014 2:06 PM
    per_a.jacobsen per_a.jacobsen Apr 30, 2014 2:20 PM Flag

    I simply don't understand why Yahoo does not outsource the process of manual spam control (but then, on the other hand, I have the same issue with Craig's List, which is rapidly becoming useless -- and LinkedIn, which is also rapidly picking up spam)

  • Reply to

    Yahoo has certainly lost control

    by per_a.jacobsen Apr 29, 2014 2:06 PM
    per_a.jacobsen per_a.jacobsen Apr 30, 2014 2:18 PM Flag

    Well, it only takes one person not to act for evil to triumph

  • per_a.jacobsen by per_a.jacobsen Apr 29, 2014 2:06 PM Flag

    All,

    Well, it is really too bad that Yahoo can't simply assign a person at, say, $25 per hour to systematically canvas for these spam messages and simply erase ALL messages from the posters. You could clean all the message boards in a day, or so.

    And, if you simply blocked the IP address of the spammers and sued the companies that hire the spammers, the spam flow would stop immediately.

    As it is, the spam traffic is now so strong that it is choking all conversation. Really, too bad.

    Of course, I really have problems accepting that anyone would actually google for the newsletters that are being spammed, but I guess it must be the case -- ipso facto.

    Best,

    pajacobsen

  • Reply to

    And up she goes again.

    by caaashisk Apr 20, 2014 5:58 PM
    per_a.jacobsen per_a.jacobsen Apr 22, 2014 5:06 PM Flag

    CAss,

    Great that you are back and sharing your wisdom with the world. Does your suggestion to go short mean that you have given up on the $50 million AT&T contract and $9 in per share value in a heartbeat (oh sorry, I forgot that much time has passed since you made this claim first time, second time, third time....)

    Anyway, as you know:

    1) The company lost its Simple Mobile contract, accounting for $3.6 million in revenues per year (that's 33% of the total revenues) and substantially all of its margin -- and -- the company's other business, including TEM, declined a full 17.5% in the year.

    2) The next quarter will be the first quarter without the "free" Simple mobile revenue and cash. The impact should be obvious to anyone who can use a calculator.

    3) There is a real risk that investments in MTSL, no matter how short time the stock is held, will be classified as an investment in a passive foreign investment company, with adverse tax consequences for the investor.

    Thank you for posting, and, thus, giving us the opportunity to post facts.

    pajacobsen

  • per_a.jacobsen by per_a.jacobsen Apr 14, 2014 3:43 PM Flag

    All,

    Another upgrade from Moody....

    "New York, April 14, 2014 -- Moody's Investors Service changed UniTek Global Services, Inc. ("UniTek")'s outlook to stable from developing due to the company's recent filing of its 10-K for the fiscal year ending December 31, 2013 with an unqualified audit opinion and its steady operating performance in 2013."

    Although, frankly, we don't need the rating at this stage, it is nice to see that Moody recognizes the work done.

    Best,

    pajacobsen

  • per_a.jacobsen by per_a.jacobsen Apr 11, 2014 10:47 AM Flag

    All,

    The current BID/ASK spread is $0.11 cents (~7.5%.) A Mexican stand-off, where, this morning, the BID side blinked first, moving a 100 share order to $1.75, hitting the high end of the spread.

    Best,

    pajacobsen

  • Reply to

    Outlook ?

    by fredmahnke Apr 10, 2014 10:49 AM
    per_a.jacobsen per_a.jacobsen Apr 10, 2014 1:59 PM Flag

    Fred,

    Thanks, I am glad that I can be helpful.

    Well, the good think about the per share price being governed by some internal event is that it tends to insulate you from external events.

    In terms of intraday stuff, it is, of course, the 3 p.m. to 4 p.m. hour that is going to be determining where we end up. All else being equal, I would not be overly surprised if we recoup the lost ground.

    BTW, the after hours action yesterday, which included a sprint up followed by a drift, was quite telling. If you feel really energetic, you can map it to the time-line and, I think, learn a lot.

    Best,

    pajacobsen

  • per_a.jacobsen per_a.jacobsen Apr 10, 2014 12:56 PM Flag

    options,

    You wrote: "and as usual no profit."

    That is entirely incorrect. Gross profit was $21.5 million, up from $14.3 million, a significant leap by any measure.

    If you meant to say no net income, yes, you would be correct, but....

    Net loss dropped from $6.4 million to $2.2 million in spite of the interest on debt and the expenses related to the merger -- an incredible improvement and perhaps a harbinger of things to come.

    pajacobsen

  • Reply to

    Outlook ?

    by fredmahnke Apr 10, 2014 10:49 AM
    per_a.jacobsen per_a.jacobsen Apr 10, 2014 12:48 PM Flag

    P.S. As you probably noted the earnings results for Q1 were, in fact, very good and confirmed the wisdom or acquiring Hudson to offset the slowing of "core" Joe's business and to insulate from the, now quite obviously, faltering Else line. Certainly, I, for one, saw no red flags related to the transaction, and was impressed by the development on Hudson.

  • All,

    Someone just bought 25 thousand shares in one go and at a $0.05 per share (or 3%) premium over the market price.

    A bit unusual for UNTK, I think. We normally see dribble transactions (except for a couple of institutional +500 thousand shares moves into UNTK over the last four months.)

    Best,

    pajacobsen

  • Reply to

    Outlook ?

    by fredmahnke Apr 10, 2014 10:49 AM
    per_a.jacobsen per_a.jacobsen Apr 10, 2014 12:11 PM Flag

    Hay,

    Well, given the cash-flow picture, I don't think that the market's reaction is linked to developments in the cash situation. Rather, I think the reaction is linked to the (not-satisfied, and, frankly, somewhat silly) expectation that the Hudson acquisition would be followed by immediate and impact-rich changes in the supply chain.

    What was said on the conference call was that the turnover for Hudson is three to four times a year, so, if you take this and add to it the re-gearing and repositioning time, then we are looking at Q3 before the changes in the supply chain starts taking measurable effect, which, of course, is exactly what was said in the Q&A part of the conference call.

    So, two things happened I think: (1) the speculators who piled into JOEZ expecting a quick leap in the per share price did not get what they were looking for an immediately pulled out (a day 1 reaction, which, of course, is consistent with best-practices for speculative or short-term trading,) and (2) the institutional investors did not pile in (and offset the drop from the speculators leaving,) since they see no reason not to wait until early in Q3 before committing capital (consistent with best practices for institutional investor.)

    I am guessing that this will bottom out in the early parts of today and, then, recover over the next day or days, so one way of looking at it is that this is an opportunity to capture a strongly discounted price.

    I read the comments about management self-enrichment, and, yes, one could certainly argue that there has been a pattern of this in Joe's Jeans, but I hasten to say that this has been with the explicit approval of the shareholders (you can't vote for the compensation measures and then complain afterwards,) and, frankly, this has nothing to do with today's price action.

    Best,

    pajacobsen

  • Reply to

    And down she goes --- again

    by per_a.jacobsen Apr 1, 2014 11:41 AM
    per_a.jacobsen per_a.jacobsen Apr 8, 2014 6:24 PM Flag

    CAss,

    You are back? Great, that gives me the opportunity to state -- again -- the important facts:

    1) The company lost its Simple Mobile contract, accounting for $3.6 million in revenues per year (that's 33% of the total revenues) and substantially all of its margin -- and -- the company's other business, including TEM, declined a full 17.5% in the year.

    2) The next quarter will be the first quarter without the "free" Simple mobile revenue and cash. The impact should be obvious to anyone who can use a calculator.

    3) There is a real risk that investments in MTSL, no matter how short time the stock is held, will be classified as an investment in a passive foreign investment company, with adverse tax consequences for the investor.

    Thank you for posting, and, thus, giving us the opportunity to post facts.

    Keep coming. We will keep being here!

    pajacobsen

UNTK
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