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Both CVS and Rite Aid are growing Rx volume, too, so I think market expansion as baby boomers retire is driving the SSS growth, not necessarily expanding market share. There are also new branded and specialty meds to treat Parkinsons, Psoriasis, etc. and a host of new vaccinations (such as for shingles) beyond mere Flu shots that count as Rx's at a high ticket.
If the ACA survives in any meaningful way and 40 M consumers gain pharmacy coverage, this industry will witness enormous growth in 2014. If the Tea Party succeeds in dismantling the ACA, pharmacy and many hospital stocks will be a great short.
The big difference between the first BK and the newest Exide BK is that debt drove the 2002 reorganization after the disastrous acquisition of GNB and other "assets".
This time, operating losses ($233 million for FY13), pending debt principle-due payments, account losses (Walmart), topline degradation from lack of winter in both Europe and the Americas, shutdown of Vernon, clean-up liabilities due EPA from a 2011 settlement and the Frisco, TX closure, a shareholder class action suit, a virtual library of additional off-balance-sheet enviro-liabilities and a competitive landscape making lead-acid technologies at risk vs. new technologies emerging at Toyota, Nissan, Tesla, BMW, GM, Honda and Ford affecting both OEM and replacement battery demand in the future ALL contribute to the second BK.
All is NOT well. Neither is all OVER. But the architects of change that are steering the Plan of Reorganization will earn their keep if they are to sustain Exide in any position of leadership in the battery business IMHO.
GLTA.
When Exide emerged from its first bankruptcy in 2004, its shares traded at $22.50 and have steadily eroded, since. Exide reported audited losses for FY13 of $233 million. The high share prices prior to the first BK filing were based on accounting and oversight irregularities that led to much of the company's senior management being discharged by the Board of Directors and several executives were convicted in Federal Court and sentenced to jail time and substantial fines.
Exide management clearly stated that its common shares are likely to have little to no value in its Plan of Reorganization. The P-O-R is not expected to be released until 2014.
Exide's product portfolio is not much changed from what it looked like in 2002 when it last declared bankruptcy and did cancel all common shares. Neither has its operating geography changed much, since that time.
Exide will survive as a corporate entity and existing shareholders may come out significantly ahead if they are very patient and, quite possibly, somewhat lucky. This is a large and complex company and will not be quick to turn around, IMO.
Exide's technology in its largest business segment, transportation, is limited to advanced lead acid which is virtually an oxymoron compared to EV technologies such as fuel cell, nickel-metal-hydride and lithium-ion technologies that are at the forefront of the global vehicle business. And Exide's Vortex is a marginally enhanced variation on JCI's Optima spiral cell design that is 20 years old.
http://www1.eere.energy.gov/vehiclesandfuels/pdfs/merit_review_2012/energy_storage/arravt004_es_atkins_2012_p.pdf
Exide's technology in motive tower is still playing catchup with tubular designs popularized by competitors over a decade ago, in my recollection.
If Exide is to survive, it must IMO invest in new tech platforms that will replace its lead acid albatross.
You can put lipstick on a pig with better results that owning this dinosaur stock.
http://www.nytimes.com/2013/11/03/business/at-sears-those-big-losses-get-in-the-way.html?pagewanted=all&_r=0
Costco, Walmart, Target, Macy's and Amazon are the future. Sears, JC Penney, A&F and GAP are the past. You can make money trading ANY stock for short durations, but the longer you own SHLD, the more you are going to lose, IMO).
Robb, I LIKE having a tax problem that manages a nice gain and tries to preserve the gain at lower rates. I will sell if the S/P takes a severe hit, but I doubt it will be necessary.
WAG's free cash flow is enormous and can easily absorb the file purchases that do drive the topline. Just as they have been comfortably paying down the debt in advance of tranch #2 of the A-B deal which they will also comfortably pay down.
This is no longer a Walgreens play. This is now a sector play. The baby-boomer retirement deal is finally occurring and MAY get an even larger spike from ACA and 40M new drugstore insureds. If you do not like Walgreens, buy CVS or RAD but this sector is a no-brainer gainer for the next few quarters and could go to the moon with a flu outbreak of any consequence.
It won't last forever. But it looks real good for the foreseeable future and I put my money where my mouth is.
GLTA.
If they are working on new technologies, don't you think they would either have some products "on test" with Ford, GM, BMW, Toyota or some carmaker? They have OEM relationships on a global scale. No news... no product tests... no PR... "no gots"! Alternatively, President Obama has done at least 2 visits to JCI.
Exide WAS the technology leader for a long time, and bought a ton of talent at Tudor, Chloride, Fulmen, Sonnenshein and even a few visionaries from GNB (Tony Sabbatino) and Dunlop (Bill McDowell). They let their edge slip away into a hollow brand: The Exide Edge that retains no genuine justification except as a "brand" with no realistic underpinning.
The timeline for qualifying an OEM battery is about 3 years from presentation to delivery. Exide ain't even in the game in the EV market unless you include golf-cart dinosaurs like Club Car and EZ-Go.
Exide management earlier cited the rationale for filing BK which included debt limiting the company's ability to invest in its business and future survival. Why would the court approve such an imperative that could include wiping out common shareholders? Maybe there is a clue inherent in today's Tesla announcement regarding batteries.
Tesla assembles its own lithium-ion battery packs in California with cells purchased primarily from Panasonic, and possibly some from a new arrangement with Samsung. The Chevy volt uses a battery similar to the largely similar Valence Technologies design. The Prius uses a nickel-metal-hydride battery pack that is sourced, I believe, from Japan Storage Battery. These are the technologies that are driving the electric car market which is still evolving, but I do note with interest that the Prius is now the #1 selling automobile in Japan and, overall, EV's are a happening phenomenon on a global basis. Exide is NOT a leader in any of these technologies.
Exide's high end is in absorbed glass mat lead acid. The graphite grid hoopla is fine for interruptive use (battery kicks in at idle) like Johnson Controls and others offer, but it is no knockout punch and not satisfactory for EV power sourcing.
In 2000, Exide was in the forefront of EV technology with its Lion Compact Technologies investment that was also graphite based but was cannibalized during the first BK and the promise mortgaged into a low-value usage in a low tech product tier that has gobs of competition.
Lead acid is NOT the future for Exide. It can only be seen as Exide's eventual cause of death. The recycling issues, alone, doom it to an eventual, toxic demise. Even the Chinese and Mexican recyclers are recoiling from lead/acid "junk" and new technologies poses better, safer and more reliable performance without the same calamitous environmental liabilities.
Exide NEEDS a new technology base for it to survive as lead acid gives way to the next generation of mobile power sourcing. That technology will require major R&D investment to bring products to market fast enough to replace lead-acid as it goes the way of the horse-drawn carriage and buggy whips. I hope that the P-O-R recognizes this need before it is too late to do so.
JMHO.
Look for Exide 10Q to be released after market close today. With Vernon reopen should show improvement from June Q.
I bet that at least 25% of the stands in Phoenix are empty and covered over with banners to try and conceal the horrendous lack of fan interest. The TV audience will only be tuned in to see if there is another altercation between Jeff Gordon (rectum) and Clint Bowyer (wrecked him).
In 2004 Sears & KMart store count was at around 3500. Today it is around 2050. SHLD has lost about $4.5 billion over the last few years. It lacks the resources to open many ne stores or remodel old ones due to its financial red blanket condition.
Eddie Lampert owns about 55% of SHLD and has done little beyond online initiatives that has succeeded.
This company is a dinosaur, like JC Penney.
Yes, the hearing was cancelled by the court because the noteholders agreed to the stipulation and no objections to it were filed by anyone else. This is largely a neutral outcome... Vernon stays open, the costs of remediating the infractions that led to its initial closure will commence.
Had the court repudiated the stipulation that Exide and Cal agreed to, the share price would have collapsed, IMO, so be happy some progress is being made despite an erosion of the modest shareholder's equity still existent.
GLTA.
There is very little on the agenda for the 3PM hearing except the stipulation on remediating the Vernon site. I see no issue with the court on this, which is good news. However, the cost of the stipulation will commence once court approval is granted which will affect forward metrics.
Personally, I would not advocate selling shares based on the possibility of share cancellation, nor would I advocate buying shares based on some strange correlation between the future of Exide and some bizarre, presumed similarity with American Airlines. I do not predict common shares will be cancelled. Nor do I see ANY parallel between lead acid batteries where only Exide has now filed TWO bankruptcies and the airline business where EVERY carrier has filed for BK in the post 9/11 era and the travel malaise that affected American, US Air, Delta, United, Southwest and virtually ALL other airlines, globally.
Exide is a battery company. It's products are necessary. And Exide is unlikely to go away as a productive resource except to whatever extent, if any, that some better capitalized company like JCI or Japan Storage Battery or Yuasa may be willing to absorb some of its lead acid capacity in both car batteries and/or motive power.
A LOT can happen between now and the P-O-R that is expected sometime in 2014. Some of those possible outcomes could be huge for existing common shareholders. And some of the negative outcomes could be catastrophically lethal for common shareholders including irrevocable cancellation of all common shares.
I urge diligence over euphoria or a herd mentality for investors seeking gains here. Traders can make money, daily, as long as they don't find the music has stopped and no chair is available.
GLTA.
For tax reasons I need to continue to hold WAG for at least another 9 months or see my gains drained by a 40%+ ordinary tax rate instead of the cap gains rate of 20%. So I am hoping Wasson can keep it together for at least that long, and maybe I'll stay around longer if the uptrend continues. I think that is a good bet as the entire retail-Rx segment is outperforming as ACA reaches critical mass and the baby-boomers march into retirement in an unrelenting onslaught that has also kited CVS and Rite Aid's S/P and prospects. Meanwhile, all is not happy in grocery store pharmacyland, and rumblings persist that even Target may be exiting the Rx business as margins give way to 90 day and mailorder fills on maintenance meds. There are huge store closings as Delhaize, Winn-Dixie and even some of the majors are shrinking store count as older stores become obsolete and victims of Walmart, Costco and BJ's cost cutting.
I am awaiting Citibank Analyst Deborah Weinswig's updated retail forecast and her prognosis on WAG, and others like COST that I also own. My projections are mine, alone, and are based partly on prior experience during and following WAG's previous splits and the institutional activity that followed those events.
GLTA.
Unfortunately, there is no assurance that we will ever have that "Aha moment" and get let in on all the secrets behind the mysteries of Rotech's reorganization and sacrifice of shareholders equity. Awhile back, investor2004 and I were comparing Rotech's antics to another bizarre case in Arcadia Healthcare that sold off its assets, closed its doors and all its management and B-o-D quit, leaving a vacant corporate shell with around $33M in debt, no functioning businesses and no employees. Yet, Arcadia never filed for BK or cancelled shares which continue to trade in subpennyland at some worthless valuation. They just quit filing SEC doc's and went dark.
Exide has stated that it envisions common shares to have little or no value, going forward. This can be because shares are cancelled, as took place in the earlier 2002 BK, or it can mean that they are heavily diluted in some form of swap of debt for equity. In my experience, most Q's do end in cancellation of common shares. That is not my expectation in this case because the expressed rationale for filing cited Vernon, loss of Walmart volume, upcoming debt payments coming due and inability to invest in future opportunities because of strangling debt from earlier adventures. There is no going concern warning from either the board of directors or the auditors.
I simply can't believe that Nelson Obus will sit passively by and watch $millions evaporate without attempting to extract his pound of flesh. Any action he takes may not net us any gains, but then again... who knows, for sure?
Interesting to note no re-emergence of stock trading under a non-Q symbol? Talk about flying under the radar!
That would be my sense. There are so many options and outcomes because Exide is a huge company with a ponderous array of assets. One point that was raised a few months back dealt with the possibility that Exide-U.S. and Exide-Rest-of-World could be separated... or... that Euro assets which could be highly marketable could be divested and the proceeds used to clean up the balance sheet and remediate the environmental liabilities that contributed to the BK filing in the first place.
I can't speak for the court, but I really doubt that the judge would have granted so liberal a grace period for Exide to prepare its P-O-R were it not for the complexity of the company's business architecture. I further doubt that the BK petition would have been granted in the first place were the operating challenges not truly grave, as stated by Exide's management at the time of filing. I do NOT see any quick, surprise exit from Q as likely or even possible, no matter how exciting this could be to common shareholders looking for some miracle trading reward.
GLTA.
CQP is the controlling owner of the LNG conversion/export plant in Sabine Pass, Louisiana. LNG is the extraction and Nat Gas pipeline factor within Cheniere.
LNG competes with Chesepeake and many others in nat gas. CQP only has competition attempting to gain governmental approval to operate in similar fashion to its own operations which will not truly begin attaining positive results until 2015, or slightly later.
LNG is a nat gas play that trades up or down with the market. CQP is a high risk/high reward investment that can pay patient investors huge rewards if they are willing to wait several years and can endure the risk it could all fall apart.
Walgreens is an imperfect company in a perfect storm at a perfect time in a perfect industry with some perfect partners in an almost perfect strategic position.
Some things about Walgreens still really suck. Willy-Nilly store growth in way too many U.S. oversaturated store markets (empty lots, empty stores), stupid/incompatible initiatives in new ventures that seem senseless (printer ink refills) and WAAAY overpriced acquisitions to buy Rx count from local/regional acquired drug chains.
Some things about Walgreens also really rock. Alignments with A-B and ABC... FABULOUS! International expansion... VISIONARY! Cross-pollination of Boots #7 cosmetics boutique... potentially hugely lucrative. Wellness focus... potentially life-definitive IF kept in check and limited to flu shots and vaccinations and NOT expanded to phlebotomy and more advanced medical regimens.
Personally, I still think that Greg Wasson is a schmuck but the stock under his recent leadership has shown huge growth and looks poised for more. If my forward projection proves correct, I may send him a birthday card!
GLTA.
I have said several times that this is a great trading stock until the long term prospects gain definition. It may also be a good long term investment IF the common shares remain, which despite insulting claims to the contrary, I have stated is actually likely in some shape, form or another. Then the question becomes what valuation or at what level of dilution will surviving shares hold for commoners.
Much of the sentiment on this board seems to fall into the all or nothing camps... mostly the "all" view of extreme reward... yet the most likely outcome is modest up or downside return depending on the time of ownership entry.
GLTA.
The "turnaround"? All I see is that the reopening of Vernon has improved the raw materials costs and gross margins, for as long as Vernon remains open and as long as the cost of remediation can be absorbed. Neither scenario is certain on a sustainable basis.
The unaudited financials say Exide lost $3.5 million for the month... better than the prepetition metrics, but nothing to celebrate.
Until the P-O-R is released in 2014, besides watching the docket and PR newsline, my suggestion is to track Pb price trends on the London Metals Exchange and American Metals Market. As long as the smelters remain open, Exide's profits tend to gain in a rising market and decline in a lowered commodity market.
I expect upside S/P action next week as retail players evaluate the monthly results reported to the trustee and conclude that shareholder's equity justifies a higher stock price. Insty's will see through this, however, so I further expect trading volume to remain compressed.
IMO, this remains a trading stock, not an investment stock, until the P-O-R confirms the fate of common shares. Exide's size means NOTHING in this determination since they were also "The World's Largest" in the 2002 BK and all common shares were nonetheless cancelled.
GLTA.
It sounds like Sears is acknowledging a profound failure in its business plan. Forward actions apparently include closing more stores as leases expire and selling and leasing back some real estate, improving cash flow at the expense of balance sheet assets. Same store losses continue in both Sears and KMart locations. Sears Auto Centers are on the chopping block; apparently Hoffman Estates has chosen to ignore the earlier KMart/Penske Auto Center debacle of a decade ago. Lands End will be separated from Sears since the integration into a retail platform has failed to deliver shareholder value despite the investment of enormous S/H value to purchase it, previously.
Eddie Lampert has lost his mojo. This holiday season will be terrible for SHLD. The share price is already down over $10 and likely will return to the $40 level as retail dinosaurs like Sears, KMart and JC Penney inevitably perish as unwanted, unneeded and unwelcome in light of better positioned brick-and-mortar and online competition.
To me, a few flagship stores with upscale amenities would be a non-event except for the amount of PR lavished on the expansive content of these stores and the portrayal of some huge, needle-moving initiative that tended to obscure the larger, universal and highly relevant concept of wellness that benefits ALL stores. The flagship diva departments were resume grooming by Joe LaMagnacca as he was shopping himself to Radio Shack. Walgreens replaced a really talented Marketing contender with this Duane Reade pretender and will pay a long term price for the distractions.
For Walgreens, flu shots make total sense. Fresh food for convenience does make some sense. But even Trader Joe's avoids inhouse-prepared sushi. Brow bars and nail salons actually compete with core sales categories in a drugstore and all that SGA, SGA and more SGA weaken WAG metrics that require strength to fund geographic expansion where the real gains will come from.
I got a letter from my college alma mater this week advising me that Bucknell University is now offering cutrate car insurance. How ridiculous is that? I cancelled my plans to go to a class reunion because of the absurdity of such a nonsensical alignment that confuses the mission statement and panders to driving revenue at the expense of compatible brand extension or even simple logic.
I totally agree with you. This is more extreme than just running under the radar. It's like rigged for silent running.
My shares were cancelled but I have no reported loss to claim on taxes. I can't trade the shares. I have been stuck in Never-Neverland with no apparent recourse. There is no PR.
I have not seen one quite like this, ever!
Anyone still holding out hope? This board will probably go dead soon.
A short squeeze is always possible, but I don't sense the mm's are nervous or about to harvest the "last gasp" since this one is likely to drag on through mid-2014. I keep saying it and I keep meaning it... watch the newswire and watch the docket for meaningful changes to the dynamics of this BK.
GLTA.
You do the math. Pessina owns how much of Walgreens? If tranch 2 completes and A-B is wholly WAG-owned, how much more does Pessina own? Then, in 2 years, if revenue rises by $50 billion, how much is Pessina worth?
Personally, I think WAG should seriously lose the brow bars, the barristas and the nail technicians. I actually think these adventures are stupid. But, in time, if they don't pay off, Deerfield will shipcan them and move onto something else. That's life and big business.
Wasson is in the right place at the right time. Lucky for him, because he is not competent enough to manage successfully in a more challenging day and age, IMHO. But he IS there and WAG is on a roll and if I can make a profit from it then why fight the inertia of momentum. It is, after all, about making money. Time will tell.
Good luck.
Yank
Rumor confirmed. McKesson to acquire Celesio for $8.3 billion for 50.01%$ ownership. Looks like Geo-pharma deals are on. Could be PBM-pharma deals are off.
Huge news. Confirms the logic of the Walgreens/Boots partnership. Pessina could actually pass Carlos Slim and Bill Gates in soon-to-be-counted personal wealth.
GLTA.
In 2011, Exide's IR phone alert site stated they had reserved shares for the EPA settlement to avoid dilution. However, the share price was a LOT higher at that time and "the deal" was, as I understand it, to pay off the EPA and NOAA $67.5 million in shares worth $67.5 million. In August, the same judge as oversaw their first BK and who is adjudicating this one, as well, ruled that Exide could dispose of non-essential assets including those covered by the EPA/NOAA agreement; however, court restrictions and approvals are required, and the assurance that disposal of any of these sites can only take place if the new ownere assume responsibility for their share of the settlement.
I am not saying that this is a bad thing (in fact, I think it is a positive sign that Exide is facing up to its sins). The letter Caruso sent to the California legislators which I posted the other day is another positive indication of responsible management trying to extricate Exide from some of these environmental messes, many of which they acquired, naively, IMO.
There is a cost to these clean-ups and that can play a role in shareholder equity when the POR is revealed. Long term, the impact would be for a far healthier Exide, going forward.
Survey results released yesterday per CNBC show consumer preference shift favoring online sources like Amazon. Walmart e-site is huge and growing, could favor them, as well. Last years site-to-store was hugely successful... even had their own Black Friday deals that were incredibly sharp.
Daypart checkout staffing appears satisfactory for the present. Walmart seems better staffed than Target on the frontend.
Exide owes the EPA and NOAA $67.5 million in settlement of approximately $800 million in earlier environmental claims at 31 sites from its 2002 BK. the settlement is to be PAID IN STOCK AND WARRANTS. As I understand it, the WSJ reports that the court has now put this obligation on hold, citing the uncertainty over whether stock or warrants will have any value when the newly filed bankruptcy process is concluded.
Think this might represent a bit of dilution?
Down again. The trend continues...
"All in all it's just another brick in the wall." -- Pink Floyd.
Eddie Lampert has lost his mojo.
For investors, could be worse; you could own the even SICKER competitor, JC Penney whose S/P has suffered an EPIC decline.
Community resistance to ongoing Vernon operations remains a concern for forward operations. I am not predicting an outcome, just trouble as residents disfavor Exide's position.
Yeah... so if there are no other issues, why did Exide file for bankruptcy and why did the Judge allow them to restructure?
This is a huge company with a complicated geographic structure and a host of off-balance-sheet items that entangle simple analyses such as just comparing assets to impaired liabilities and assuming that's all you need to comprehend financial wellness.
JMHO. I think you need to dig much deeper with a Q like this.
Down from $68 to $56 and down, again, today. Eddie Lampert has lost his mojo. The only worse retail PIG is JC Penney.
Choosing to ignore Exide's enormous environmental legacy cost is like totally detouring from investor reality. The pending clean-up costs are almost beyond comprehension... or any BK company's ability to pay.
http://www.leadfreefrisco.com/exides-impact-on-other-communities/
There comes a point in time where the can cannot be kicked down the road for an umpteenth postponement of the inevitable. It is my sense that Exide, at very long last, has entered the final phase of corporate accountability and financial reckoning. This is a GOOD and very responsible outcome, by the way. But such an outcome does NOT favorably affect shareholders seeking the Tooth Fairy or some bloated-value Diva ride like a Tesla.
JMHO. Do your own DD.
After Laureldale, don't forget Muncie, Indiana.
Omigod, not MUNCIE!!!!!
LOL.
Double-LOL!!!!