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ZELTIQ Aesthetics, Inc. Message Board

the49erswinbig 65 posts  |  Last Activity: Nov 12, 2013 9:34 AM Member since: Jun 8, 2013
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  • the49erswinbig by the49erswinbig Nov 12, 2013 9:34 AM Flag

    13.5% interest rate - 9.0% cash and 4.5% PIK or cash. Expensive financing but at least they have some breathing room. Thankfully they are working on strategic alternatives. Voce needs to help them get it done this year. Operationally they are a mess but still great products and recurring revenue with 90% gross margins is valuable.

  • Reply to

    Was there a layoff this morning?

    by herblara52 Nov 8, 2013 5:05 PM
    the49erswinbig the49erswinbig Nov 9, 2013 8:14 PM Flag

    No reason to speculate. If Solta is restructuring to align costs with revenues, we should hear about it after the close on Monday when SLTM reports earnings. If Solta is restructuring, that might actually be a positive to rightsize the business for a merger or for progressing towards profitability more quickly at a lower revenue run rate. Regardless, we will all know if layoffs occurred on Monday afternoon.

  • Reply to

    Cutera missed big after the close

    by the49erswinbig Nov 4, 2013 10:18 PM
    the49erswinbig the49erswinbig Nov 5, 2013 6:49 AM Flag

    I still think that SLTM and CUTR should do a merger of equals. Their HQs are about 20 miles apart. CUTR would solve SLTM's balance sheet issues immediately. CUTR actually trades at a discount to the SLTM valuation. Also, together they would do about $250 million in revenues. That critical mass would enable a proven management team the ability to better leverage their business and drive EBITDA higher. It would also significantly enhance the enterprise value in any future transaction with a PE or strategic.

  • Reply to

    Cutera missed big after the close

    by the49erswinbig Nov 4, 2013 10:18 PM
    the49erswinbig the49erswinbig Nov 5, 2013 6:14 AM Flag

    I did say that they were company specific issues for Cutera. However, 38% of SLTM's Q2 Revenues were from Asia and that is primarily Japan for them. Also, it will be critical for SLTM's Liposonix product to do well against Zeltiq which has been taking market share. Nonetheless, these are all fixable management issues. The markets are huge. Unfortunately, because of Fanning, SLTM does not have the balance sheet that we would all like to see. It is not the end of the world, but it is not ideal either.

  • the49erswinbig by the49erswinbig Nov 4, 2013 10:18 PM Flag

    CUTR was expected to do $21 million in Q3 revenues but missed by a large % and only delivered $16.8 million. They had company specific issues with yen currency exchange challenges and a decline in most of their recurring revenue tip business including toe fungus. They also blamed the strength of Zeltiq in the minimally invasive body contouring market. They have $81 million of net cash and bought back about 5% of their outstanding shares outstanding in the quarter. Stock will likely be weak tomorrow. Not sure if we can read too much into it for SLTM.

  • Reply to

    Fanning consulting deal?

    by keithc1971 Nov 3, 2013 11:32 AM
    the49erswinbig the49erswinbig Nov 3, 2013 1:44 PM Flag

    Fanning clearly did not deserve this sweetheart deal after the shareholder destruction and balance sheet erosion he caused over the last 6 years. It is really pathetic to see BODs enable unfair payouts like this and further undermine shareholders.

    However, it does not impact any potential buyout. It simply continues to reduce cash on an already leveraged balance sheet.

    Thank you again Mr. Fanning...unbelievable...

  • Reply to

    Takeover Premium

    by the49erswinbig Sep 14, 2013 7:34 AM
    the49erswinbig the49erswinbig Nov 3, 2013 1:30 PM Flag

    I think Voce et al are acting in the best interests of shareholders. Removing an entrenched management team is not an easy process, particularly when there is no 5%+ shareholders involved in challenging them. Also, getting strategic buyers in this laser sector is not as easy as in other aesthetic lines and might take longer than expected. Frankly, I would be surprised if the new CEO did not want to show that he could execute and create value and sell at a higher price next year.

    Clearly, investors are frustrating with the lack of historical execution and rightly so. Most investors (including the ones you mention) would undoubtedly welcome a transaction. Q3 is being reported on Nov 11th. It will be interesting to see how management handles guidance. After that, we have the holiday season. Consequently, any transaction would likely be delayed until Q1. If we could get a solid Q4 and a fair offer in Q1 2014, it would be a nice way to introduce the new year.

  • Reply to

    Takeover Premium

    by the49erswinbig Sep 14, 2013 7:34 AM
    the49erswinbig the49erswinbig Nov 3, 2013 12:34 PM Flag

    No worries, my comment was rather that investors should not buy more stock when the stock was in limbo in the mid-$2s. I thought that buyers should wait for a more attractive entry point. That happened to be accurate advice. I think a more attractive entry point is coming next week. I would love to see Solta sold in the mid $3s, but I think it is going to require some time and execution before we get there. I don't think that buyers are really lining up at this point. Hopefully I am wrong. There are too many people on this board that are unrealistic with timing and the challenges that face Solta's business. Coupling that with a new management team and a stretched balance sheet, and investors should logically have some concerns. Voce got lucky with Obagi, but a blogger and a guy that owns less than 1 million shares are really not that big of a long-term threat to an entrenched management team. If Voce really has buyers ready to step up, they should put out a bear hug letter and announce an offer. That has not happened to date, but maybe it will happen this month after Q3 is reported. Investors would welcome it.

  • Reply to

    Takeover Premium

    by the49erswinbig Sep 14, 2013 7:34 AM
    the49erswinbig the49erswinbig Nov 2, 2013 6:19 PM Flag

    Moosestash are you still yaaaawning? Not the most helpful response in the world. I was trying to be constructive with my thoughts. You might disagree, but a helpful dialogue is more productive than acting obnoxious.

  • the49erswinbig the49erswinbig Nov 2, 2013 4:52 PM Flag

    Balance sheet management remains critical in the quarter. Positive guidance on deleveraging the company would be well received.

  • Reply to

    Takeover Premium

    by the49erswinbig Sep 14, 2013 7:34 AM
    the49erswinbig the49erswinbig Nov 2, 2013 4:50 PM Flag

    The stock is starting to get interesting, but I still don't think you want to buy ahead of Q3 results on Nov 11th. Downside in this sector is usually about 1x EV/REV. Only CUTR and ELOS trade below that at .75 & .95x respectively. If we assume a reasonable revenue run rate of $165 million and net debt of $35 million with nearly 100 million fully diluted shares outstanding (thanks to Fanning after all the acquisitions have been fully paid for), that gives a potential downside of $1.50 or so. Stocks can overreact, but if management delineates a solid operating plan, it is probably a reasonably safe entry point with tremendous upside if management does execute or the Company is ultimately sold. However, they could still surprise everyone this quarter with a deal or amazing results, but that appears unlikely.

  • Reply to

    Takeover Premium

    by the49erswinbig Sep 14, 2013 7:34 AM
    the49erswinbig the49erswinbig Oct 18, 2013 1:20 PM Flag

    Complacency is a killer...

    There is definite concern over Q3 results. If they are challenging, management should take this opportunity to reset expectations and right size costs to be consistent with a more manageable growth rate. That could enable the stock to put in a bottom and move higher over time.

  • Reply to

    Who's buying?

    by rumorwhisperorbuzz Oct 10, 2013 1:38 PM
    the49erswinbig the49erswinbig Oct 16, 2013 12:03 PM Flag

    Unlikely...

  • Reply to

    Takeover Premium

    by the49erswinbig Sep 14, 2013 7:34 AM
    the49erswinbig the49erswinbig Oct 14, 2013 7:23 AM Flag

    Goldman Sachs upgrades ZLTQ to buy this morning and raises price target to $12. GS expects ZLTQ to have a strong Q3. Will the rising tide help lift SLTM Q3 or is ZLTQ taking market share? If the new SLTM CEO delivers a strong Q3, that should significantly bolster future valuation expectations. However, it still might take a couple of quarters to right the ship.

  • Reply to

    Takeover Premium

    by the49erswinbig Sep 14, 2013 7:34 AM
    the49erswinbig the49erswinbig Oct 10, 2013 11:20 AM Flag

    I am not bashing. I would actually like to buy more SLTM, but I am reluctant to do so ahead of the Q3 report given the recent changes in senior management and the sales organization. Also, I am less confident than others that a takeover is imminent.

    Ultimately, Solta should command significantly more value since it has tremendous assets, a strong world-wide distribution network, and valuable intellectual property. However, I still believe that operational disruptions might give us a better entry point next month.

  • the49erswinbig the49erswinbig Sep 20, 2013 1:23 PM Flag

    Any potential buyer will likely wait until Q3 results are reported and perhaps even longer. Consequently, we will at least get to see some of this momentum and progress towards strong profitability of which you are so confident.

  • the49erswinbig by the49erswinbig Sep 17, 2013 9:08 AM Flag

    In NY today at 10:00 am. Management will be discussing success against competitors at 10:45 am.

  • Reply to

    Takeover Premium

    by the49erswinbig Sep 14, 2013 7:34 AM
    the49erswinbig the49erswinbig Sep 14, 2013 10:21 PM Flag

    Incredibly helpful commentary...you must be a genius...we all appreciate your input and thoughtful investment advice

  • the49erswinbig by the49erswinbig Sep 14, 2013 7:34 AM Flag

    New CEO was buying stock at $1.75. Since those purchases, SLTM missed Q2 expectations by a wide margin. Consequently, it appears that there is at least 40 or 50 cents of takeover premium in the stock.

    Q3 will likely be a challenging quarter given all of the turmoil with management changes, new VP of sales, and product integration. Some clarity from Management on: (1) termination or implementation of approved reverse stock split, (2) have there really been credible offers for the Company as Voce states, (3) is Management's plan to get a permanent CEO and run the Company or would they prefer to sell. Competitors are likely using the sale discussions against their customers. Zeltiq continues to hit them hard in the market. Lack of transparent dialogue with shareholders is not helping the situation.

    Unless a takeover happens, it is hard to justify buying stock at this level given current fundamental challenges. New LOC has a trailing 12 month $15 million EBITDA threshold. New CEO needs to properly set analyst expectations and start achieving those estimates in a consistent manner. Solta definitely has great assets, but new management needs to work with Voce to sell the Company or show that they can finally execute to drive revenues and higher EBITDA. It is hard to get constructive on the stock at current levels without some clarity. We are really looking at a binary event: either a takeover happens or Management resets expectations and works on creating value over time through better execution. It is hard for most investors to know which is more likely.

  • the49erswinbig the49erswinbig Sep 6, 2013 9:54 PM Flag

    If you want to see the Company get sold, I completely agree with you. Mark's prior operational experience was less than stellar, and the SLTM Board (of which he has been a member since 2006) was clearly asleep at the switch allowing the last two dilutive transactions. My concern is that Mark wants to run Solta and will engage with Voce only to try and placate their immediate concerns. Every month that passes is eroding the intrinsic value of the Company. The sales reps are also in a challenging position against their competition with a new CEO, a new VP of Sales, new products with some delayed deliverables, a Company that might be in play, and a Company that has a stretched balance sheet. So Maybe you should mention that to your pal Jack the next time you speak.

ZLTQ
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