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Like the attitude, Smoke. Now let's work on the content. Sam is paid VERY well for the work he does. We, as shareholders, have every right to expect competency for our money.
Second, profits, plans, and execution are very sexy to me. I don't care if the company is doing trash collection, food or accounting services. Restructuring a near dead company, making it profitable, growing, eliminating debt, and working towards a known goal is attractive to many long term investors.
Some things Sam does well. Other things, not so well. The plan is unknown. The profitability is lagging. The IR effort is non-existent. And growth is largely via acquisition. The organic growth component is not apparent. On a more positive note, debt is coming down, the company is no longer receiving a 'going concern' notice, and it is profitable. And that's good, but not great. Much of the missing components require simple communications, not a skill that Sam appears to have in abundance.
Smoke, you may be happy with half a loaf. I'll agree that it beats no loaf at all. But when I am paying my CEO prime rib prices, I expect more than a decent burger.
It is far from absurd if you assume, as I do, that the company has the ability to be far more profitable than it is. It is also not absurd if you think management will not take some action given that the stock sells for 5 times operating earnings, fully diluted. Clearly, they have shown no interest in doing a competent IR job. One has to ask why?
Do not confuse the $2 million reported earnings with anything that remotely resembles reality. They earned almost $600K for the year. The rest is adjustments, some of the funny money variety.
I have no way of knowing whether IVFH management is truly interested in going private via an LBO or if they just aren't capable of promoting this company. But I wlll tell you that if I was running this company, an LBO at 5x fully diluted EPS would be always in my mind. I happen to believe that this company can easily do $1 million in annual operating earnings, maybe significantly more. Why they didn't in Q4, I don't know.
Management will suck out just so much of company earnings and cash flow. Eventually, they'll want it all.
To respond to your questions, let's take the question of how a price is determined. Management hires an 'expert' to determine a fair value for the price. Think of this as a legal case. The prosecution hires a forensic investigator to say the defendant is guilty. The defendant hires a forensic investigator to say he's innocent. You and I and 300 of our best friends don't like the price. We sue. Management lawyers up and the lawyers sit in a room, jack up the legal bill and when the bill is high enough, they compromise on a fairer price and that's what you and I get.
The why should be obvious. Management doesn't have to deal with anyone. No shareholders. No filings. No investorshub and a-holes like me who tell them when they screw up. And best of all, no one to share dividends with. No one to share the spoils with when they build the company to $75 million and sell it off.
Going private, however, comes with a cost. The company typically takes on a boatload of debt to buy shareholders out. As long as that debt carries a 3% interest rate, it's not too bad. If rates rise and if the loan is a floating rate note, interest can get very expensive. Companies who do LBO's are often cash constrained for many years. If you are familiar with Winn Dixie or Pathmark Supermarkets, these are two companies who did something similar to a LBO. Neither had the cash to remodel stores because they had so much debt to pay off. Winn Dixie went bankrupt. Don't remember if Pathmark did, but I do know that their stores we ranked among the worst in the industry. They had no cash to improve and spruce them up.
One takes a company private by doing a LBO, a management led leveraged buy out. The company finds a lender. The funds are used to buy the shares from the shareholders, that's you and me, at a price the directors deem to be 'fair'. Your fair, my fair and management's fair may not be remotely similar. The company tells you that either you sell out or you will have dead stock. They delist the stock and anyone who doesn't submit their shares for sale holds wallpaper suitable for wrapping fish or placing under a bird cage. Think puppy training.
Sorry to throw cold water on some enthusiastic boys and girls reading this board, but fully diluted, this company does 4.8 cents/share per year. Take away the non-cash BS and just look at operating earnings. This company is averaging $150K/quarter. That's exactly what it did in Q4. I was of the opinion that it would do closer to a million for the year. Fool me.
The stock is still undervalued but not as much as I originally thought. I did notice that Sam eliminated a huge block of debt and that is very favorable. Note the fully diluted shares came down year over year. For that, Sam gets kudos. But he has to work on making this company more profitable and the IR is nothing short of world's worst. Whoever let Sam issue earnings on the equivalent of a Friday night should be shot.
Un-freakin-believable. I forgot that tomorrow is a market holiday. So putting this report out tonight is the equivalent of burying the filing on a Friday after the closing bell. This is managerial incompetence of the highest order. Simply de-freakin-plorable.
I got Friday 2:07PM in the when the annual report is released pool.
The stock is untouchable because A) it doesn't trade B) there is virtually no float C) to say the the IR job done to date has been pathetic would be giving them too much credit and D) the company has yet to show that it believes shareholders actually own this company.
At least 2 of the 4 have to change to make this stock worth owning.
Let's not get carried away. $400K was operating earnings. The rest was adjustments due to warrant and convertible debt repricing.
You need to look at the company on a fully diluted basis. Even still, at a reasonable PE ratio, this company is selling at a very healthy PE ratio. Looking forward to the annual report to see what Q4 brought in operating earnings. Then take the Q3 and Q4 operating earnings and compute the fully diluted PE. That is the way to truly understand where the company really stands.
I hope Sam is planning to issue the financials VERY soon. Waiting to the last minute sends all the wrong messages to any serious investors.
Totally agree with your assessment. It may not be bad news but there is no way it is good news.
After waiting until the last, or almost the last day to release the quarterly, if the news is good and Sam doesn't have a full court PR program ready to go, I am going to publicly call for his resignation also.
This is absolute stupidity. It doesn't take 90 days to get an audit done and report annual earnings. If they are bad, you bury them. If they are good, you tell the whole world we have arrived. If the news is good and Sam continues to bury the story, either he's going to steal the company from us by going private, or he's a freakin' moron. I've searched for a third alternative and can't find one.
Let's agree to disagree. I saw no volume again today. I didn't buy any shares today and neither did anyone else. Long term relationships with a bank are fine, but since they must have a corporate checking account, they obviously had a relationship with a bank before. It is nice to see a new bank take an interest in finding the company to be creditworthy, but we have known it was creditworthy for several quarters before. I'm just surprised it took this long.
Now let's see them get a SBA loan and really start moving this thing forward. I sincerely hope this is just a first step. Late, I suppose, but maybe they are finally beginning to execute the job they are charged with doing.
As for this PR, it was not the sign I have been waiting for to add to my holdings. Let's see what the quarterly looks like and pray that Sam doesn't bury the good news on a Friday late afternoon as he has done before.
Seriously? Maybe they would issue a PR stating that their lease was over and that they had a secured a new location that left no room for growth which was not anticipated anyway? A high school student could have written that PR. A Freshman. It says absolutely nothing you wouldn't expect it to say. The market's reaction to today's exciting news tells you everything you need to know-another day in a long string of days with no trades.
Still waiting for management to show some interest. Not likely going to get investors interested if a building PR is the best they've come up with since the beginning of the year. Freakin' pathetic. De-Freaking-plorable.
A little more accumulation and this will be selling at 1.2 cents. Don't believe everything a computer tells you. Common sense tells you there is no one building a war chest in this as it plummets like a rock.
Smart money is accumulating? Seriously? The stock has moved from 2+ cents a few months ago to 1.5 cents now. What evidence do you have that smart money is accumulating? I keep waiting for a pop, but it never seems to come. The stock action does not indicate a stock under accumulation.
Time to stop the amateur financial management. The organization looks bad when we announce earnings at the last possible moment. Q4 started almost 6 months ago. A little professionalism would go a long way in helping to establish IVFH as a serious company.
And the last day of the month is a Sunday so I suppose we'll get the results either Friday after the close or Monday morning on April Fools Day. Either way, releasing earnings on the last possible day is another way of saying this business is more than we can handle.
Friday afternoon, of course, is when you typically announce things like your CFO has been arrested or your factory in Singapore was nationalized. It's old news by Monday morning and by then no one cares. Sam - this is when you announce bad news. This is also how you bury good news when you don't want a stock to react. Take note.
Huff, I feel your pain. I have become increasingly convinced that management's seeming intransigence about running this business as a public company with shareholders/co-owners is a prelude to taking the company private.
I support my assertion on the basis of several pieces of information. The first is that management knows the company is in better shape than it has been in years yet has done virtually nothing to publicize it.
The second is that the company must have spent years to find an IR partner who could do so little with so much material. It's sheer genius.
Third, the company continues to outwardly show that it is only marginally competent in the performance of routine duties. Financial reports are always made public on the last possible day, even if that day is a Friday night and the news is good.
Fourth, management pushed for a 50:1 RS knowing it would virtually eliminate all trading. The little trading that might happen would be sells from frustrated shareholders. With no PR to support the stock, even the few sells would drag the price down encouraging more people, life our friend Huff, to want to throw in the towel.
Fifth, the company's marketing may be improved, but still has miles to go. Let's say I wanted to learn more about molecular cooking, an area that IVFH has a product line to accommodate. Where's the starter kits? Where is the package deal with a book, recipes, chemicals, etc? Doesn't exist. I, for one, believe this is by design. Too much good news is bad for a LBO. I refuse to believe any other possible reason is valid.
Wait for it. If they tank earnings in Q2 or Q3, you know we are close. No one runs an organization like this without a reason to do so. I believe we will see that reason become clear in the coming quarters.
Does anyone want to call Sam and tell him whatever he's doing isn't working?
What? No pump? Bummer. We have to be close.
Another monster day. $33.50 in stock sales. Sam - I have a suggestion. How about a 50:1 split? Let's go back to .004 per share where at least we had some volume. If you're going to hire an ineffective IR firm, save the money and just be the best penny stock you can be. At least we can trade at .004. We're dead here at 25 cents.
I have no idea why you expected anything but failure from the IR program. What possible reason could you have for expecting anything else? Company ownership doesn't even pay lip service to giving a dam.n about shareholders. Marketing ranges from poor to nonexistent. The IR group took forever to start and then did little once it engaged.
If they wanted to start a show of competence, they might try issuing an earnings report more than 20 minutes before the SEC deadline.
And you are surprised? What surprises me is why you are surprised.
Still waiting for the announcement that the company will be taken private by management. I expect it will happen within the year.
Still, it was more excitement than IVFH had had in over a week. Thinking that IR team could use a slightly more aggressive strategy.
Monster day. Closed at almost 45 cents on 100 shares. Whoever did this, I thank you. I don't feel any wealthier, but the number that TDAmeritrade shows me for my portfolio value looks a lot better. One out of two ain't bad.
I would guess that the seller really wants to cash out and doesn't care about the price. discouraging, yes?
Born, that is an excellent idea. I'd like to see someone on the board who would support our interests and maybe get a few things prioritized correctly. Me and my shares will support Drugdoctor's application to the board.
Got some cheapies today myself. Well, the $10K limit was hit today, but all sells. Not exactly what I was expecting. Obviously, I'm not Sam's only fan. Someone just voted strongly with their feet today.
The lack of PR is killing this stock. Is Sam setting this up for a management led LBO at a price we won't be happy about? Sure looks like it.
Day 4 - No trades
Day 3 - No trades
Day 2 - No trades
Day 1 - No trades
How about a split, say 30:1, to build a bigger float and maybe get some trading. Don't think institutions are clamoring for a 40 cent stock anymore than they were a 0.8 cent stock.
Are there people who own 30,000 shares who are not serious?
UNFI is owned by many mutual funds, hedge funds and private equity funds. They reported today. Decent earnings report. This is a quality organization with a nice business model. Unknown, however, it is not. It is on millions of radar screens.
One would think that US Foods needs IVFH more than UNFI does. Sure, UNFI is big in the natural and organic food space. But they probably have hundreds of supplier choices to choose from. US Foods does not. To the extent that they want to be able to provide the exotic items that are hard to find, they NEED IVFH.
Clearly, any agreement that IVFH can make with UNFI will be a benefit, but US Foods is their Daddy. IVFH needs to build size and sustainability before US Foods will consider acquiring them. Once they achieve this level, I believe they will be bought. That is why it is so frustrating to see Sam wasting time and resources on nonsense that doesn't move the ball forward.
It's a risk when you put a lot of effort into developing a relationship if it doesn't work out. But in the end, you come out wiser and stronger, if not richer. This is the course of action Sam should be taking. Wasting time on incubators is simply a waste of valuable resources.
Born, if you read the documentation, these are small companies valued at roughly $400K. Many will be nothing much more than start-ups.
The foodhatch looks like an incubator, sounds like an incubator, and resembles an incubator because is IS an incubator.
Again, I question the value of investing $100K to $200K per year in these companies when there is so much yet to do with the companies we have and possible acquisitions of meaningful size. Were I running things, I would be looking for additional distribution outlets to dilute my reliance on a sole source. I would also be looking at securing and enhancing companies that supply my products, especially those in which nice margins and large markets exist.
Just the result of my few weeks in industry. I could be wrong here.
I thought it was a perfectly rational position to take. If I had a list of projects for IVFH to take on, a food company incubator would not be in my top 20. Maybe not top 40, either.
It's a great for the ego, but is it really the best use of corporate resources a company like IVFH can find? It is still much too early to call the recent acquisition a success, but signs are very good. One quarter does not a success make. But it looks like the acquisition will be a very positive step. Given one success, why not continue with what they know and find another company with the same or a similar business model to the one they just acquired? That would be the first 10 slots in my top 20.
Well said, Cargo Hauler. This is a company with 'going concerns' issues in its recent past and now we are investing in a portfolio of long shots in a low margin business. The same company that has been incapable of exploiting its molecular cooking technology, that has ignored an army of ambassadors/shareholders who would love to feel a part of the organization and promote it, is going to give management lessons to new-bee's?
Is this one of those alternate reality companies?
Gross margins are up substantially and that is very good. I read the report fairly quickly. Nothing sticks out as a huge problem, though we still need to get the debt and the warrants off the books.
I simply refuse to believe that a sane and competent manager would release a positive earnings report on the night before Thanksgiving. What a waste of good news. Absolutely unacceptable. Surely, we'll hear a story about how they worked all night to meet the 11/21 deadline. But this is simple inexcusable. De-freaking-plorable. We get one PR a quarter and IVFH just trashed the one for the last three months.
Geodan, tomorrow is the day before Thanksgiving. The Markets will most likely be half deserted by 2 PM tomorrow. Friday is a half.
Riddle me this. If I had a great quarterly report to issue, what would be the one day of the year to issue those numbers to maximize the number of people who did NOT see the quarterly report?
Hint: It's tomorrow. You really have to question the credibility of an IR firm that allows a client to issue a great quarterly report on the day before Thanksgiving. That's the day you issue a report that writes off every mistake the firm has made for the last 10 years to clean the slate for future quarters.
Maybe we can do a 50:1 split, go back to .006, and put a share in every other box of Cracker Jacks. That would get the word out.
I had a feeling that the date would get pushed out due to the storm. When Sam didn't file a late notice, something seemed odd.
The stock seems to have generated a tiny bit of interest today. It's rare. While the 1:50 RS makes the stock look almost reasonable price-wise, it killed the float. And since Sam issues news, infrequently (that means never), this stock only trades for a few days around each quarterly release.