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I sold my big stake too. Thanks pumpers!
Innovative is a small business that just happens to be public. Below is Q&A from the Treasury:
31. Question: Do businesses owned by large companies with adequate sources of liquidity to support the business’s ongoing operations qualify for a PPP loan?
Answer: In addition to reviewing applicable affiliation rules to determine eligibility, all borrowers must assess their economic need for a PPP loan under the standard established by the CARES Act and the PPP regulations at the time of the loan application. Although the CARES Act suspends the ordinary requirement that borrowers must be unable to obtain credit elsewhere (as defined in section 3(h) of the Small Business Act), borrowers still must certify in good faith that their PPP loan request is necessary. Specifically, before submitting a PPP application, all borrowers should review carefully the required certification that “[c]urrent economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant.” Borrowers must make this certification in good faith, taking into account their current business activity and their ability to access other sources of liquidity sufficient to support their ongoing operations in a manner that is not significantly detrimental to the business. For example, it is unlikely that a public company with substantial market value and access to capital markets will be able to make the required certification in good faith, and such a company should be prepared to demonstrate to SBA, upon request, the basis for its certification.
Lenders may rely on a borrower’s certification regarding the necessity of the loan request. Any borrower that applied for a PPP loan prior to the issuance of this guidance and repays the loan in full by May 7, 2020 will be deemed by SBA to have made the required certification in good faith.
I don't believe they have anything close to substantial market value. I think it's the Ruth's Chris, Shake Shack, etc. they are after.
Definition of a small cap from Investopedia:
Companies that have a market capitalization of between $300 million to $2 billion are generally classified as small-cap companies. These small companies could be young in age and/or they could serve niche markets and new industries. These companies are considered higher risk investments due to their age, the markets they serve, and their size. Smaller companies with fewer resources are more sensitive to economic slowdowns.
At a market cap of $11M not even close to be defined as a small cap. Public company with access to capital but at a very high cost. In the food business, I think the odds are zero they have to give the loan back.
Don't know about the heavy demand or not but glad they applied for the PPP. This exactly the type of company that should apply and receive.
I'm not sure why it is one or the other. I think it's both. Obviously a big hit to business that changes operations and it's a small business that qualifies for the PPP loan.
I don't think they have a choice right now but to file the 10K on 5/15. I believe on normal circumstances the 1Q 10Q would be due on 5/15 and they can now take until 7/1 for that. Those are the only SEC delays so far.
Agree it's a new world, having said that I'm interested in 4Q results as that is there biggest quarter by far regardless whether it's ancient history.
The foregoing notwithstanding, the Company expects to file the Report no later than May 14, 2020 (which is 45 days from the Report’s original filing deadline of March 30, 2020).
In the larger context, I don't have a problem with it. Either they start figuring out how to make money or they don't. If they don't then they will be gone either by the big shareholders replacing them or they will be acquired.
no idea
A penny EPS
Look like Pappas is up to 11% now. I assume he will just keep on buying.
The other part of the update in that filing:
On August 15, 2019, JCP Partnership delivered a letter to the Issuer nominating Loukas D. Kozonis, James C. Pappas and Mark Schmulen (the “Nominees”) for election to the Board of Directors of the Issuer at the 2019 annual meeting of stockholders (the “Annual Meeting”).
From the 8K:
On July 24, 2019, our Board of Directors filled a vacancy and appointed David Polinsky to the Board of Directors. Mr. Polinsky is an independent director and was appointed to be a member of each of the Audit Committee, Compensation Committee, and Nominating and Corporate Governance Committee of our Board of Directors.
As a director, Mr. Polinsky will receive as compensation an annual grant of 50,000 options which will vest after 12 months (provided he is still a Director on the vesting date), and will be exercisable for three years at a price of $1.20 per share.
Prior to Mr. Polinsky’s appointment to the Board of Directors, on July 23, 2019 (i) an entity with which he is affiliated purchased 349,650 shares of our common stock for $250,000 which represents a price per share of $0.715, and (ii) through a subsidiary, we purchased certain assets from an entity with which Mr. Polinsky is affiliated for a) nominal cash consideration and b) future potential consideration, the value of which is based on meeting certain milestones related to the assets purchased.
I don't know. History would say it's here to stay. Press release says we should see improvement but also says additional investments are needed. Matter of fact it basically hints that we need to wait until 4Q. Certainly, can't live with a 1.5% operating margin. Not enough revenue growth to make that up. I certainly can't argue with your 2QEPS estimate without seeing any SG&A % of revenue improvement.
Late too. Filed another extension. Due on Monday.
I can't argue that. You could certainly be right.
My expectation is about the same as last year (1Q2018). Last year they were at 2 cents in the first quarter without the $220K in acquisition costs. I see about the same this year. I see about $11.7M in revenue (3% core growth and 25% IGourmet/Mouth growth). Overall gross margins at around 31% and SGA% at 25%. We shall see.
You are Mr. Probability aren't you? Will he stop acquisitions (I doubt it). Does he have what it takes to cut costs (I don't know if it's that or is the infrastructure in place now or soon so that additional revenues don't need much additional SG&A).
Yes, Dickmo nailed 4Q EPS. I was a bit high. Too low projecting revenues and too low on SG&A as a % of revenue. As for a non-stock owning crackpot conspiracy theory, I don't buy it and never had.
Sorry dude. I don't have a model. Just stating the present position and current financial facts as I see them. Certainly need to make the E commerce profitable if they stay on that strategy.
My take on Q4 after the PR:
Agreed that it is nothing to write home about but was solid. Biggest concern going forward is the SG&A % of revenues. Hopefully it can drop from the 26% currently and it's not all fixed investments.
If the Specialty Foodservice category plus national brand is really the "core" then maybe that came back. USFood Service was up over 4% from 4Q2017. Be nice to have solid growth back at the core. IGourmet/Mouth were up 23% compared to IGourmet standalone in 4Q2017. IGourmet/Mouth were up almost 20% for 2018 compared to IGourmet standalone 2017.
With out $500K in Mouth acquisition costs in Q3 and IGourmet acquisition costs in Q1, the EPS is just short of 7 cents with core at about 9 cents while losing 2 cents on IGourmet and Mouth.
If they can get 3% core growth and 25% IGourmet/Mouth growth in 2019 then they should be at 8-9 cents range in earnings. With better shareholder relations it should be at least in the 70-80 cent range.
We will see, we have been disappointed before both on earnings and investor relations before.
Well with just full year results in the 10K it is hard to get a total grasp on the 4Q amounts so a more detailed PR would help. But trying to back into numbers it appears to be about $18M in revenues about $800k in net income and 2.3 cents of EPS. Not sure if there are any one time costs or not. If we assume a little growth at the core then maybe $11M of revenues there and about $7M for IGourmet and Mouth.com. I suspect the new businesses are still losing money in the 4Q which with a big 4Q would be surprising but SG&A still seems high and could be integration is still taking place. Hopefully a PR will reveal more. I guess kind of what I expected except higher revenues but also higher S&GA.
I think the answer is two acquisitions. They also answer that revenues will be up and net income down from the corresponding period which is basically a no brainier as well.
Sorry buddy but I never said the odds are 100% on a good EPS report. I made a forecast but there are some huge assumptions that I could be entirely wrong about as this company is so hard to predict without the communication. I hope it is good but I can see anywhere between 0 cents and 2 cents. Be surprised by a loss but boy with these guys you can't rule it out.
On the reporting time, I hope after the market today but technically they have until Monday at 5pm. They did beat the deadline last year for the 10K by a few days.
They have until Monday if they want to take the full time.
Pappas ownership at 8.8% with today's filing
In an 8K today, 3 year contracts for Sam and Justin and BOD compensation.
Pappas ownership up to 7.2% with today's filing.
Well yea I got it from press releases. That's all I have to go on and 10Q historical analysis and my own guesses on a lot of things. I may be wrong but I'm not trying to be misleading.
But I'm not all talk. I don't state what they should be doing or not or bash management like you. I evaluate and make comments on earnings and make some projections based on my own analysis. I'm a patient investor. I've held some stocks for 10 years +. I'm not good with the price right now but I'm not selling either. Don't see the need for any action right now. Doesn't mean I won't in the future.
We haven't talked as a group. I don't know the others (except one). But I think if a proxy fight happens then there is a decent amount of shares concentrated in a relatively small group. Who knows what everyone's timeline or patience or trust in management is.
I figure you are all talk and no action since you don't own any shares. No stake in the game.
Interesting that with the Denver J. Smith (and associated filers) filing today updating ownership to almost 9%, Pappas at over 6%, myself and a few others I'm aware adding up to over 7%, we can account for 22% of ownership in a small concentrated group. Hope that just means we all will make money down the road on these big bets and that we don't ever have to use that concentration.
Pappas ownership now 6.1% with yesterday's filing.
Yes basically. I will say I feel a little more confident that the revenue number may be closer to my number tan yours but maybe you might be closer on the SG&A %. Neither of us will know for 3 months either way.
My estimate is a little different. I have revenue at $16.3M. Same core as you at $10.5M but IGourmet at $5.8M. Last year IGourmet did $4.6M on their own. I put 27% growth on top of that which is in between the 23% and 30% reports from the three 2018 Q news releases. It may be high but I also haven't accounted for 3 months from Mouth.com.
Cost, I'm at 72% but basically similar to you. As usual it's the SG&A I have the hardest time predicting. If IGourmet keeps at the previous pace or the actual delivery costs eat up margin then you may be right. Meanwhile I'm thinking maybe 23% of revenues which is still a jump from $3M SG&A quarters to a $3.7M SG&A quarter.
With all that I'm at a 2.6 cent quarter (not accounting for taxes which I don't have a clue).
Either way we have to wait April 1rst to find out. Hoping better shareholder governance moves comes before then.
Don't know if it's expansion or expense. I don't know if that high % is for infrastructure or fulfillment of orders or some combination.We don't have that information.
Like I said if it is really for fulfillment (or never ending infrastructure) and your overall SG&A estimate of 28% for the 4Q is right then IGourmet is a big problem. I guess we will see in March.
Not sure what you are saying. They said they increased IGourmet revenues:
(1) 30% year over year for the month of March in the 1Q press release
(2) 23% year over year increase for the 2Q in the 2Q press release
(3) 30% year over year increase for the 3Q in the 3Q press release
Not sure what you mean by "it didn't show up". I'm just talking revenues not profit. Now IGourmet made $4.6M revenues on their own last 4Q so I guess it could be lower then that but the first three quarters of the year would't suggest that.
My estimates are a little different. I have total revenues above $16M. We agree on the core revenues but I have IGourmet at $5.8M which is 27% increase on their standalone $4.6M in 4Q2017.
The 27% could be aggressive as it between the 23% and 30% increases that they had in the press releases this year but obviously it's a bigger quarter and maybe they can't maintain the growth rate. I would say worst case that match last year at $4.6M.
I think on the overall gross margin % we are generally in agreement and my big question is on the overall SG&A %. If it s the 28% then yes, basically no earnings. Honestly on SG&A I have no idea and I wouldn't dispute the 50% odds you laid out there.
If Igourmet's SG&A % of revenue is in the 40% range (my estimate from 2Q and 3Q results) then they will never make money in this business. I can understand getting the infrastructure laid out on low IGourmet revenues in the first three quarters of 2018 but if they can't lower that % of a big IGourmet revenue quarter then we have trouble.
Here are a few more on Mr. Pappas and his activism. I view this as a good thing as they see that it is undervalued and that their is potential there. So I believe it will force governance and operating changes. I guess we will see how active JCP becomes. Or maybe not how active but how soon.
https://www.cspdailynews.com/mergers-acquisitions/activist-stockholder-opens-about-cst-pantry
https://www.nrn.com/finance/activist-takes-aim-fiesta-restaurant-group
https://www.thestreet.com/story/14464492/1/casey-s-eyes-kroger-s-convenience-stores-as-activist-hovers.html
I haven't talked to Sam about all the benefits he hoped to get out of IGourmet. But I'm hoping that the intent was exactly what you stated at the very end of your reply.
I didn't comment whether the "going private" theory is old or new. I just said I don't believe it.
Doesn't mean others that have lived through the past with this company that I haven't can't help seeing a possibility of it.