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"This has been the most useless beating of a dead horse that I've seen in ages."
- While I like the dead horse reference to the product :)... The etc cabinet is THE single most important thing about this company. With the $100M brick tossed out there, it dwarfs the rest of their business by an order of magnitude!
"these relatively minor obstacles is ludicrous"
- Minor obstacles... <VBG> And the Grand Canyon is a gopher hole...
"premise that they don't know what they're doing flies in the face of their many years of experience in the cabinet industry."
- How many consumer products have the invented and marketed?
"added to patent as adendum 1 part# 001-2"
You can not add design features as an addendum to a provisional patent. At the point of filing a real patent, you can elaborate on details, but if they weren't disclosed in the provisional, you'll have to file an additional patent.
FWIW, your approach is infinitely better than theirs. I haven't done a thorough search, but I suspect that it wouldn't be patentable. Additionally, your post just legally became "prior art" on that idea, so they could no longer patent it... you could, however.
"said it was a simple fix by using a side slide design."
Aside from the fact that their pending patent won't cover that... and the fact that if there is a cabinet or wall next to it, it won't work either... and it would require some very special hardware to accomplish that...
Maybe you should consult your "connections directly in the industry" and have them answer the last two items there...
"all correctable with one click of the engineer's mouse,rev. 1"
Please explain how you mean this, I don't follow...
"The retailer LOVE IT"
What was he going to say? Actions speak louder than words... and they didn't order any or sign a deal with him, or he would have announced it, no?
"Kitchen cabinets are modular and are secured in place by a few screws. It will be a very simple matter to remove a few screws, slide the cabinet out three inches, switch faces frames, slide the cabinet back three inches and resecure it. What's the big deal here?"
1) The top is often glued to the base with construction adhesive.
2) The holes in the back of the cabinet cut for the plumbing connections aren't large enough to pull through the back with the hot and cold lines attached.
3) The drain stopper lift mechanism and the hot/cold connections to the faucet will collide with the back of the cabinet before it can be pulled out an inch.
4) With heavy countertops, the cabinets are pinned by the weight.
5) Inside corner cabinets are pinned by adjacent cabinets.
6) Often times flooring is installed right up to the cabinet preventing it from pulling forward.
7) There are often shims between the cabinets, and if you pull the screws, they will drop down between the cabinets.
8) No tools required... remember? :)
But other than that...
"Lots of monir adjustments occur along the way with any product."
We aren't talking about a "minor adjustment" here. The concept of their "invention" is flawed. Deviation from the current design would render their pending patent useless.
Replaceable front cabinets have been repeatedly "invented" since 1942. If the practical ways of doing this have been commercial failures, why would an impractical one succeed?
Why have all the products that came before that offered replaceable cabinet fronts, many of which offer superior solutions, IMO, to EXPH not succeeded? EXPH's only niche is the slide up concept, which is totally impractical.
Start here, and look at this and many of the other patents cited.
http://www.patentstorm.us/patents/7207636/description.html
This has been tried for years and no one has ever been successful. Why would EXPH be successful when many of these superior solutions (patents running all the way back to 1942) never went anywhere?
DOA.
"It's funny how you always miss(i'm sure by accident) THE MOST IMPORTANT aspects of the new product.
THIS ISN'T FOR THE CONSUMER IT'S FOR THE RETAILERS!"
REALLY?
Then why is the product website called easytoinstall?
Why is the product called "etc"... "Easy Transitional Cabinetry"? How is it transitional for the retailer?
You are incorrect... EXPH clearly targeted the product primarily at the consumer at the lauch...
"There doesn't look to be any additional hardware. If anything it looks to be where they can eliminate some hardware. Any addition machining would be done in a manufacturing environment with mass production in which any additional cost would be minimal. It's a smart design. Any additional costs your talking about would be pennies on a unit."
If it was a lower cost way to produce the product... wouldn't ALL cabinet makers have been building them this way? Wouldn't the patent be on a lowered cost cabinet manufacturing technique?
It is more expensive. PERIOD.
"disign could easily be changed in rev 1 to push pin connector,no need to remove counter top. easy fix."
You're forgeting about their patent pending on the vertical slide and competitive patents...
So you acknowledge that sliding it up and out and having to remove the countertop is absurd?
"go in your kitchen and look under your countertop. I would bet that there is space between your ff and ct edge?
there is normally about 1/4 to 1/2 in. which is plenty of space to remove ff, if it wasn't nailed."
- Watch the video... you don't understand how this works... Ii comes straight up vertically!
"IT WILL REDUCE THE COSTS TO THE RETAILER BY 40%"
That is a projection of inventory cost, not product cost silly...
Do European countertops hinge upward to allow the cabinet face to be slid up WITHOUT removing the countertop?
"A benefit the product has is great for retailers."
The product absolutely positively HAS to be more expensive to manufacture than existing cabinet designs which have been optimized over the years to remove cost. To market etc at the same price would be unlikely. The additional hardware and machining unquestionably adds cost. So how desireable is a product that is more expensive to retailers, that would offer no advantage to consumers, and the retailers can't charge more for?
If the product does not offer a benefit to the consumer, retailers can not charge more for it than competitive products.
You are missing the key points...
1) The concept is ok, but the design itself is impractical.
Everyone can see this. No one is going to remove their countertops, plumbing, range top, etc. to change the faces of their cabinets.
2) This product will be lucky to sell at all... certainly not a $100M product.
"How do you know retail margins are greater than EXPH?
You'd have to be an insider working for EXPO to know their margins."
- I am assuming that their margins are comparable to the rest of their industry. Are you aware of some reason that I shouldn't?
"the FACT is FACTORING in quite alright and widely used by many Fortune 500 companies..
No! Margins are the key to when factoring makes sense! Retail is FAR different than a wood shop margin-wise.
Yes, but the others do it for a different reason (it makes the books look better)... they have a completely different financial situation... that should be obvious! Do you REALLY think that EXPH belongs in your string of companies as a peer?
Factoring is used for many reasons... your post is nice and all... but factoring is a 3 out of 10 for a company, and a LOC is a 10 out of 10. This is not an opinion. You won't find the answer on Google. This is TRUTH...
Sounds accurate. We have no independent verification, but that is what they claim. All that considered... EXPH is worth sub-penny valuation. It is hard to be worth much per share with a BILLION shares outstanding!
"Anything less is just YOUR OPINION THEN!
It is NOT my opinion! It is FACT based on public information. Period.
Could it be true? No! They haven't even shipped their $12k order, and won't for weeks... and we have NO idea where it is going, whether it be Lowes (doubtfully) or Harry's Tacos and Toiletries...
There has never been any release that said they DO sell Lowes their etc line. Now I am supposed to find a press release that says they don't? That's absurd!
"it just seems like many on here equate our product being in Lowes "
Read my lips... EXPH DOES NOT HAVE A RETAIL PRODUCT AT LOWES!
They sell them store fixtures only, umkay?
"like Lowe's aren't doing business with scam fly by night companies."
-I have never called EXPH a scam or a fly by night company. I know EXACTLY what it is... a boring wood shop that makes store displays. It is many of the longs that are building it up to be something that it is not...
You have to admit that there is a BIG difference between due diligence and proclaiming the CEO to be "ethical , competent , and successful"...
Just keeping it accurate...
"if CEO JDB is not ethical , competent , and successful . Lowes , H.D. , etcetera , and the three Banks believe that he is."
- I believe that Crestmark Capital (the $1M line) is not a bank (although it is owned by one), but rather a factoring company. And... invoice factoring is based on the customers' creditworthiness, not EXPH's... So it is incorrect to suggest that this relationship is validation of JD/EXPH.
I also would say that it is a <stretch> to suggest that companies buying product from EXPH is equivalent to a testimony that they believe that JD is "ethical , competent , and successful"
Other than that... great post Renee!
You are correct, I did not mean to have the $ sign there.
Very good post lurker. Clearly many investors have no clue how the dividend will function at all and the ramifications of it.
Your post is NOT supported by facts. Please do some DD before posting!
"1. The co don´t need extra money from selling shares"
- They sold $2M shares just last Tuesday. Clearly your statement is untrue.
"2. The co dont need to raise A/S or O/S"
- There can be no assurance of that. With 982M out of 1B authorized, and the company still selling... I wouldn't bet on it!
"3. When the co see that the price is cheap , is better than the co buy shares at market to sell that we can see in financial information as extraordinay results."
- I don't understand your point?
"4. The co is operating with Line of credit with Prime banks to Large Scale Production for all 2009 / 2010."
-They have no line of credit. They have $1M in invoice factoring. That is NOT credit. They sell their invoices as an asset at a discount prior to them being paid. They lose an additional several percentage points of margin on every order.
"5. The co dont need to do a R/S (this is only for losers co)."
- No it isn't for losers. When you have a billion shares trading at a penny, it actually makes sense! Why would you think that not doing a reverse split is some type of advantage?
Hooka,
Where is JD's response to the latest questions? It has been 24 hours. Did I miss it?
"Are you finally accepting some ones point of view or were you just being funny with your crazy sense of humor?"
I was agreeing with fastfish720 because he is absolutely correct. I agree with FACTS everytime!
"So you admittedly say they havent disclosed their cash balance in a "long time", so why would you speculate so assuredly they you know that they have "very little cash on reserve"? That seems rather contrived to me..."
Simple... they were selling shares 3 days ago! Obviously they needed the money!
"How tight are they?"
- From past year's SEC filings... very tight. Like 10% if memory serves. Look it up. Invoice factoring will shave off another few percentage. No reason that in this cutthroat economy that their margins would have increased. For most companies the opposite is true.
"As of when exactly do you know this to be a fact?"
- Well, we are both speculating as they haven't disclosed their cash position in a long time, and don't seem to be in any hurry to do so.
"Also, do you also believe they won't have more cash in the near future?"
- I would hope so as they are shipping some products, but without a line of credit, they would have had to spend their own cash to get the materials to build the Lowes fixtures! Their margins are very tight, so it isn't like they'll be flooded with cash anytime soon.
"and they have the ability to buy companies"
With what? They have virtually no cash, and they can't issue anymore shares... well, they can, but no one wants that!
"or develop new products"
The jury is still out on that one...
"Generally, special dividends are declared after exceptionally strong company earnings"
Note the term "generally". This is absolutely not the case with EXPH or any pink sheet stock.
Just be weary, this move is not done from strength, but rather as a desperate defensive strategy. You did notice that the release appeared minutes after the price dropped below $1?
Additionally, from the PR, they are: "currently reviewing the possibility of a special dividend". This is just a headfake. Did the MMs flinch, or did MOMO guys misread the release? My guess is the latter.
There are considerable legal costs to restructure the company and spin off a division via a special dividend. Is this REALLY the best use of the company's very finite cash reserve? I'd bet that it never actually happens...
Hooka,
Any response to your email from JD?
"spin-offs are often used to UNLOCK VALUE"
-That's not the case here.
By doing the spin off as a dividend, short shares would be in a real pickle!
IF the price holds or continues to climb, the short theory is correct... if it retraces. I'd say the short theory is busted.
"Sounds like shareholders might get to keep their stock in EXPH...but might also receive additional shares of company EXP"X" as a dividend."
I'm sure that is exactly how it would work.
"I call this a solid green flag that CEO JDB has contemplated to enhance the market value of Expo Holdings's trading stock"
- Please explain how divesting a division started 3 days ago can "enhance the market value of Expo Holdings's"? The only way this could add value is if doing so somehow requires all shares to be called in or something. Maybe to pay the dividend all shareholders of record would need to be identified, and this could put an end to any shorting going on. If this is the case, then JD is a genius!
"To share that news today JDB is attempting to counteract the
very obvious manipulation of EXPH ."
- So you are saying that they are trying to manipulate their shareprice?