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* Fairholme, Ackman deal may push Simon to boost bid
* Creditors could drop opposition to GGP plan
* Ackman benefits whoever wins
By Paritosh Bansal and Dan Wilchins
NEW YORK, March 9 (Reuters) - Activist investor William Ackman is doubling down on General Growth Properties (GGP.N) and however the current battle for the second-largest U.S. mall owner turns out, his hedge fund will likely emerge as a big winner.
Ackman's Pershing Square Capital Management and fund manager Fairholme Capital Management have agreed to invest up to $3.925 billion more in General Growth to help it emerge from bankruptcy as a stand-alone company.
Brookfield Asset Management (BAMa.TO), a Toronto-based property and infrastructure investor, is also helping to bankroll that effort. [ID:nN08196419]
The new financing plan is a blow to Simon Property Group (SPG.N), the largest U.S. mall owner, which has made a $10 billion offer to buy General Growth in bankruptcy.
Ackman and Fairholme's offer increases Simon's costs to buy General Growth by granting warrants to the two investors that any rival bidder would have to buy back. These warrants are similar to those being offered to Brookfield, and Simon has estimated the Brookfield warrants alone are worth more than $300 million.
The Ackman offer also removes a key advantage that Simon's bid had. General Growth, like Simon, can now offer unsecured creditors cash for their claims, instead of the cash and stock it had proposed earlier.
Unsecured creditors who have backed Simon's bid could drop their opposition to General Growth's plan now, provided there are no contingencies around the cash payout, a source close to the unsecured creditors said.
That brings the fight down to winning over General Growth's shareholders. If Simon still wants to buy General Growth, it really only has two options: boost its $9-a-share bid on its own, or find a partner and boost its bid, experts said.
"They have to do something to raise the price," said John Mallin, head of the real estate practice at law firm McCarter & English. Mallin added that he did not think Simon would walk away without making a better offer.
Australia-based Westfield Group (WDC.AX) and several institutional investors have signed agreements to look through General Growth's books.
Westfield, the world's biggest mall owner, is probably not interested in the whole company, real estate experts say. It may instead want to partner up to acquire certain assets.
"Is it possible that a company like Westfield and Simon might make a joint bid to, if you will, split the empire?" Mallin said. "It's certainly possible."
Westfield has declined to comment on General Growth. Brookfield and General Growth declined to comment. Simon and Pershing Square were not immediately available.
MEETING AGAIN
Ackman, who has said General Growth is worth between $24 and $43 per share, feels strongly enough about the owner of more than 200 malls to give up some of his control of the company.
He stepped down from General Growth's board to avoid potential conflicts as the company evaluates bids.
Ackman and Simon have crossed paths before. Last year during Target Corp's (TGT.N) bitter proxy fight with Pershing Square, Simon came down on the side of the retailer. [ID:nN18375105]
Now, even if Simon wins, Pershing Square will make a tidy profit. Ackman is General Growth's largest shareholder, having exposure to about 25 percent of the company.
He bought in at an average cost of less than a dollar a share, while General Growth's shares currently trade at $14.55. (Reporting by Dan Wilchins and Paritosh Bansal; Editing by Steve Orlofsky)
U.S. Concrete Reports Fourth Quarter and Year-End 2009 Results and Provides Update on Debt Restructuring Efforts
HOUSTON, March 10 /PRNewswire-FirstCall/ --
U.S. Concrete, Inc. today reported a net loss attributable to stockholders of $16.7 million, or ($0.46) per diluted share, for the quarter ended December 31, 2009, compared to a net loss attributable to stockholders of $132.2 million, or ($3.63) per diluted share, in the fourth quarter of 2008. The net loss attributable to stockholders during the fourth quarter of 2008 included an after-tax non-cash charge of $119.8 million, or ($3.29) per diluted share, to reduce the carrying amount of the Company's goodwill. The net loss attributable to stockholders for the fourth quarter of 2008, excluding these items (a non-GAAP financial measure), would have been $12.4 million, or ($0.34) per diluted share.
For the full year 2009, the Company reported a net loss attributable to stockholders of $88.2 million, or ($2.44) per diluted share. The net loss attributable to stockholders for the full year 2009 included several non-cash charges in accordance with existing authoritative accounting guidance. The Company recorded a non-cash charge of $45.8 million to reduce the carrying amount of the Company's goodwill, a non-cash charge of $8.8 million to reduce the carrying amount of long-lived assets in our Michigan market, and a $3.0 million non-cash loss on the sale of plants in the Sacramento, California market, all of which occurred in the third quarter of 2009. Additionally, the results reflect a gain of $7.4 million related to purchases of the Company's senior subordinated notes during the first and second quarters of 2009. The net loss attributable to stockholders for the full year 2009 excluding these items (a non-GAAP financial measure), would have been $40.8 million, or ($1.13) per diluted share, compared to net loss attributable to stockholders of $12.6 million, or ($0.33) per share, for the full year 2008, excluding the items noted above from the fourth quarter of 2008.
A reconciliation of (i) the Company's net loss attributable to stockholders for the full year of 2008 and 2009 and fourth quarter of 2008, to (ii) the Company's net loss attributable to stockholders for the full year of 2008 and 2009 and fourth quarter of 2008, excluding the goodwill impairment charges, asset impairment charges, non-cash loss on the sale of the plants in Sacramento, California and gain on purchases of the Company's senior subordinated notes is included in the attached "Unaudited Non-GAAP Condensed Consolidated Statements of Operations" schedules.
As previously announced, the Company has retained financial and legal advisors to assist in evaluating potential strategies to strengthen its balance sheet. The Company also amended its credit agreement to provide access to an additional $5.0 million in liquidity and obtained waivers for certain potential future events. While the Company is currently in compliance with the provisions of its amended credit agreement, the continuing economic conditions impacting the ready-mixed concrete industry in the Company's markets and the impact of unusually severe winter weather have placed significant stress on the Company's liquidity position, which has further weakened in 2010.
FOURTH QUARTER 2009 RESULTS
Revenue in the fourth quarter of 2009 decreased 30.9 percent to $119.9 million, compared to $173.3 million in the fourth quarter of 2008, reflecting lower ready-mixed concrete sales volumes and lower precast concrete products revenue. This decline was the result of the continued decrease in demand for the Company's products due to the significant slowdown in construction activity in our U.S. markets due to the U.S. recession.
The Company's ready-mixed concrete and concrete-related products revenue for the fourth quarter of 2009 was $111.0 million, a decline of 31.6 percent compared to the fourth quarter of 2008. Ready-mixed concrete sales volume in the fourth quarter of 2009 was approximately 1.01 million cubic yards, down 33.7 percent from 1.52 million cubic yards of ready-mixed concrete sold in the fourth quarter of 2008. On a same-plant-sales basis, fourth quarter 2009 volumes were also down 33.7 percent from the fourth quarter of 2008, with volume declines in each of the Company's major markets. The primary reason for the decline in volume continues to be the depressed economic conditions in the U.S. construction industry.
The Company's consolidated average sales price per cubic yard of ready-mixed concrete increased 0.6 percent during the fourth quarter of 2009, as compared to the fourth quarter of 2008. Increased pricing in certain markets was mostly offset by lower prices in certain of the Company's other markets. On a sequential quarter basis, the Company's average sales price per cubic yard of ready-mixed concrete decreased 0.5 percent in the fourth quarter of 2009 from the third quarter of 2009. The Company anticipates that pricing will continue to be affected by the recessionary conditions into 2010.
Revenue in the Company's precast concrete products segment was $11.8 million for the three months ended December 31, 2009, a decrease of $3.1 million, or 20.8 percent, from the corresponding period in 2008. The Company's fourth quarter 2009 precast concrete products revenue was down as a result of the continued downturn in residential construction in the Company's northern California and Phoenix, Arizona markets and lower commercial construction activity in the mid-Atlantic market.
Adjusted earnings before interest, income taxes, depreciation and amortization ("EBITDA") was ($0.9) million in the fourth quarter of 2009, compared to ($1.4) million in the fourth quarter of 2008. The Company defines adjusted EBITDA as net income (loss) attributable to stockholders plus expense (benefit) for income taxes, net interest expense, goodwill and other asset impairments, non-cash gain/loss related to asset sales, depreciation, depletion and amortization. Adjusted EBITDA is a non-GAAP financial measure. For a reconciliation of adjusted EBITDA, free cash flow and net debt (other non-GAAP financial measures used in this earnings release) to the most directly comparable GAAP financial measures, please see the attached "Additional Statistics" schedule.
Commenting on the fourth quarter results and the restructuring process, Michael W. Harlan, the Company's President and Chief Executive Officer, said, "Our revenue was down about 30 percent, which was about what we expected as we began the quarter. We continue to experience challenging market conditions, which have negatively impacted our revenue, profitability and liquidity. We have implemented further cost control measures, including expanded wage freezes, elimination of our 401(k) matching contribution, reduction of employee benefits and emergency-only capital expenditures." Mr. Harlan continued, "2010 has gotten off to a slow start, with inclement weather causing delays in concrete projects in most of our markets. As a result, our volumes are approximately 20 percent lower than our expectations through February, which has added further pressure to our liquidity. From a restructuring perspective, we are working diligently to right size our capital structure and enhance our liquidity position. In light of these circumstances, we have initiated discussions with the lenders under our credit agreement, representatives of our 8-3/8% senior subordinated notes and others regarding a permanent restructuring of our balance sheet. Such a restructuring would likely affect the 8-3/8% senior subordinated notes, our credit agreement and our outstanding common stock, and may be effected through negotiated modifications to the agreements related to those debt obligations or through other forms of in or out of court restructurings."
The Company's selling, general and administrative ("SG&A") expenses were $15.3 million during the fourth quarter of 2009, compared to $23.5 million for the fourth quarter of 2008. The Company experienced lower costs during the fourth quarter of 2009 related primarily to reduced compensation as a result of workforce reductions in 2008 and 2009, reduced incentive-based compensation accruals, reduced litigation accruals and other administrative cost reductions such as in travel and entertainment costs, professional fees and office expenses.
Net interest expense in the fourth quarter of 2009 decreased approximately $0.4 million, to $6.5 million, compared to $6.9 million for the fourth quarter of 2008. This decline was primarily due to the interest savings from the repurchase of some of the Company's senior subordinated notes and lower interest rates on borrowings under its credit facility when compared to the fourth quarter of 2008. This reduction was partially offset by increased interest associated with higher amounts outstanding under the Company's credit facility.
The Company recorded income tax expense from continuing operations of $2.1 million for the three months ended December 31, 2009, as compared to a $19.9 million benefit for the corresponding period in 2008. For the year ended December 31, 2009, the Company applied a valuation allowance against certain of its deferred tax assets, including net operating loss carryforwards, which reduced the effective tax rate from the expected statutory rate.
The Company used cash in operations of $3.9 million during the fourth quarter of 2009, compared to cash provided by operations of $10.2 million in the fourth quarter of 2008. Cash flow from operations decreased in the fourth quarter of 2009 compared to the fourth quarter of 2008 due to lower collections associated with lower product demand. The Company's free cash flow (defined as net cash provided by (used in) operations, less capital expenditures for property, plant and equipment, net of disposals) for the fourth quarter of 2009 was ($4.4) million, compared to $3.6 million in the fourth quarter of 2008. Capital expenditures were down $6.1 million to $1.5 million in the fourth quarter of 2009, as compared to $7.6 million in the fourth quarter of 2008 as the Company continues to control capital spending.
The Company's net debt at December 31, 2009 was $292.3 million, up $4.2 million from September 30, 2009. The sequential quarterly increase in the Company's net debt was primarily related to a reduction in our cash balances. Net debt at December 31, 2009 was comprised of total debt of $296.5 million, less cash and cash equivalents of $4.2 million.
Robert D. Hardy, Executive Vice President and Chief Financial Officer of U.S. Concrete, stated, "As of December 31, 2009, we have $4.2 million of cash on hand and $45.3 million of available borrowing capacity under our revolving credit facility. We had $16.7 million outstanding on our revolving credit facility and $11.6 million of letters of credit. However, the Company's liquidity (cash and revolver availability) has dropped significantly, to less than $25 million as of the end of February. Additional letters of credit to support our self insurance and surety bond programs and a reduction in the borrowing base computation due to significantly reduced sales volumes reduced our revolver availability." Mr. Hardy continued, "Absent a successful restructuring, there is substantial doubt about our ability to continue to operate as a going concern."
FULL YEAR 2009 RESULTS
Revenue for the year ended December 31, 2009 decreased 29.1 percent to $534.5 million, compared to $754.3 million for the year ended 2008, reflecting lower ready-mixed concrete sales volumes and lower precast concrete products revenue. This decline was the result of decreased demand for the Company's products due to lower construction spending and depressed economic conditions in the Company's markets.
The Company's ready-mixed concrete and concrete-related products revenue for 2009 was $491.8 million, a decrease of 30.0 percent compared to 2008. The Company's ready-mixed concrete sales volume for 2009 was approximately 4.2 million cubic yards, down 30.7 percent from approximately 6.2 million cubic yards of ready-mixed concrete sold in 2008. Excluding ready-mixed concrete volumes attributable to the Company's acquired businesses, volumes during 2009 were down approximately 33.3 percent on a same-plant-sales basis from 2008. This decline in volume reflects the continued slowdown in construction activity in each of the Company's major markets.
The Company's consolidated average sales price per cubic yard of ready-mixed concrete increased approximately 1.2 percent during 2009, as compared to 2008. This increase was attributable to higher prices in certain of the Company's markets, offset by lower prices in certain of the Company's other markets.
Revenue in the Company's precast concrete products segment was $57.0 million in 2009, a decrease of $11.1 million, or 16.3 percent, from 2008. This decrease reflected the continued downturn primarily in residential construction in our northern California and Phoenix, Arizona markets and lower commercial construction activity in the mid-Atlantic market.
Adjusted EBITDA was $25.3 million, or 4.7 percent of revenue, in 2009, as compared with $40.5 million, or 5.3 percent of revenue, in 2008. Adjusted EBITDA for 2009 was lower than the comparable prior-year period, primarily due to reduced profits resulting from lower ready-mixed concrete sales volumes and lower precast products revenue. This was partially offset by a gain on the repurchase of some of the Company's senior subordinated notes and cost reductions.
The Company's selling, general and administrative expenses were $66.1 million in 2009, compared to $79.0 million in 2008. This decrease was primarily due to reduced compensation as a result of workforce reductions in 2008 and 2009, lower incentive compensation accruals, lower litigation accruals and other administrative cost reductions such as in travel and entertainment costs and office expenses. This was partially offset by an increase in our bad debt provision when compared to 2008.
The Company's loss on sale of assets increased to $2.3 million during 2009, compared to a loss on sale of assets of $0.7 million in 2008. The sale of ready-mixed concrete plants in the Sacramento, California market resulted in a $3.0 million loss after the allocation of $3.0 million of related goodwill.
The Company performed an impairment test on remaining goodwill as a result of the Sacramento asset sale and current economic conditions and recorded an impairment charge of $45.8 million during 2009. The Company also evaluated the recoverability of its property, plant and equipment. As a result, the Company recorded an $8.8 million impairment charge related to its property, plant and equipment in the Michigan market in 2009.
The Company recorded a $7.4 million net gain in the first and second quarters of 2009 related to the purchase of $12.4 million aggregate principal amount of its 8-3/8% senior subordinated notes in open market transactions for $4.8 million. The Company used borrowings under its revolving credit facility to fund the open market purchases.
Net interest expense for 2009 was down approximately $0.6 million to $26.5 million, compared to $27.1 million for 2008. This change was primarily due to the interest savings from the repurchase of some of the Company's senior subordinated notes and lower interest rates on borrowings under the credit facility when compared to 2008. This was mostly offset by increased interest associated with higher amounts outstanding under the Company's credit facility.
The Company recorded an income tax benefit from continuing operations of $0.2 million for the full year 2009, as compared to $19.6 million in 2008. For 2009, the Company applied a valuation allowance against certain of its deferred tax assets, including net operating loss carryforwards, which reduced the effective benefit rate from the expected statutory rate.
The Company generated cash from operations of $8.0 million in 2009, compared to cash from operations in 2008 of $29.7 million. Cash flow from operations declined primarily due to lower income as a result of lower demand for the Company's products, partially offset by the receipt of a $4.9 million federal tax refund in the third quarter of 2009 and by a reduction of working capital requirements. The Company's free cash flow in 2009 was $4.2 million, as compared to $6.3 million in 2008. Capital expenditures were down $13.9 million to $13.9 million in 2009, as compared to $27.8 million in 2008. The proceeds from asset disposals increased $5.7 million in 2009 due to the $6.0 million sale of the Company's plants in Sacramento, California.
CONFERENCE CALL
U.S. Concrete has scheduled a conference call for Wednesday, March 10, 2010, at 10:00 a.m., Eastern time, to review its fourth quarter 2009 results. To participate in the call, dial (480) 629-9819 at least ten minutes before the conference call begins and ask for the U.S. Concrete conference call. A replay of the conference call will be available through Wednesday, March 17, 2010. To access the replay, dial (303) 590-3030 using the pass code 4255647.
Investors, analysts and the general public will also have the opportunity to listen to the conference call over the Internet by accessing http://www.us-concrete.com/. To listen to the live call on the Web, please visit the Web site at least 15 minutes early to register, download and install any necessary audio software. For those who cannot listen to the live Web cast, an archive will be available shortly after the call on the Company's Web site at http://www.us-concrete.com/ within the "Investors" section of the site.
USE OF NON-GAAP FINANCIAL MEASURES
This press release uses the non-GAAP financial measures "adjusted EBITDA," "free cash flow" and "net debt." The Company has included adjusted EBITDA in this press release because it is widely used by investors for valuation and comparing the Company's financial performance with the performance of other building material companies. The Company also uses adjusted EBITDA to monitor and compare the financial performance of its operations. Adjusted EBITDA does not give effect to the cash the Company must use to service its debt or pay its income taxes, and thus does not reflect the funds actually available for capital expenditures. In addition, the Company's presentation of adjusted EBITDA may not be comparable to similarly titled measures other companies report. The Company considers free cash flow to be an important indicator of its ability to service debt and generate cash for acquisitions and other strategic investments. The Company believes that net debt is useful to investors as a measure of its financial position. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, the Company's reported operating results or cash flow from operations or any other measure of performance as determined in accordance with GAAP.
ABOUT U.S. CONCRETE
U.S. Concrete services the construction industry in several major markets in the United States through its two business segments: ready-mixed concrete and concrete-related products; and precast concrete products. The Company has 125 fixed and 11 portable ready-mixed concrete plants, seven precast concrete plants and seven producing aggregates facilities. During 2009 (including acquired volumes), these plant facilities produced approximately 4.5 million cubic yards of ready-mixed concrete and 3.0 million tons of aggregates. For more information on U.S. Concrete, visit http://www.us-concrete.com/.
Great Article - Check it out 7-Mar-10 08:18 am http://10baggerstocks.com/?q=node/15
Hype True Or False?? VSTNQ 3/6/10
Submitted by admin on Sun, 03/07/2010 - 00:02
VSTNQ - Visteon Corporation
With action in VSTNQ that has got all of the penny stock world talking we figured we'd give you our 2 cents. In case you are unfamiliar with our "Hype True or False" articles, here's our track record of all of the articles that we've released. XMDC at .010 (FALSE), VKNG at 1.05(FALSE), ECTE at 1.90(FALSE), and ZVTK at .0044(TRUE). Needless to say we've been correct on all of our articles and we're looking to keep up our reputation with VSTNQ.
Let's start with what sparked this move for VSTNQ, because two weeks ago it was trading around .06-.08 and now all of a sudden it's now at .88, it was the release of their 2009 financials, and these were nothing to scoff at. When a company with a market cap of $10 million comes out with a PR saying that they just profited $128 million then of course this is going to go off the charts. But the question is has VSTNQ become overvalued all of a sudden? Or is it still a bargain to pick up shares under $1?
With earnings of $128 million and a current market cap of $115 million the P/E ratio is under 1! That wasn't before the move, that is now! But the fun doesn't stop there. Their net income was up $809 million from the previous year, so they are growing. And because of the fact that they reported $276 million in earnings for 4th quarter we can assume that they were on track to lose approximately $150 million for 2009, until they had their monster 4th quarter! So let's assume that can continue making that $276 million every quarter in 2010, which isn't really too much to ask, is it? Then they would have a profit of about $1.2 billion for 2010. So if this is still trading at .88 by this time next year the P/E would be under .1, which would mean the price would have to go up 150 times just to get to the average P/E ratio (of 15)! And .88 times 150 is $132 per share! So correct us if we're wrong, but according to those 4th quarter numbers VSTNQ should be trading over $100 per share at least by this time next year.
But let's not get ahead of ourselves. We forgot to take into account the $1.1 billion that VSTNQ has already in cash balance, so factor that into the equation and things are looking even better. They even said in their latest financial report that their business has been more diversified than ever before in this past year, but the best part is who they are working with, corporate giants like Hyundai and Ford.
This all being said it is clear that VSTNQ should not be a penny stock any longer. The hype is TRUE.
In the short term we see VSTNQ realistically reaching $2 per share, although it's always nice to think about that $132 number.
Great day today up 17%
Glad I am not shorting this stock$$$$
Why ZANE will go MUCH HIGHER from here and over $10 next week 6-Mar-10 05:38 am -$50 million revs and growing
-3.5m outstanding float
-60% insider ownership
-a tiny $16m market cap
-funds/institutions buying shares yesterday into close. on level II several bids of 100,000 flashing through in the $2.10 range before close.
-these large buyers will wipe out completely anyone crazy enough of thinking of shorting this stock with such a tiny float of 3.5m shares.
-market cap next week will be at minimum in parity to revenues
-ZANE is now on the radar and followed by many, including funds/institutions and they will be fighting for every share because of 60% institutional ownership and only 3.5 outstadning float
-for an example of what will happen to ZANE, see similar float and undervalued stocks such as DDRX (from $0.34 to $35.00), VRML (from $0.01 to $34.00).
We are valuing this company at minimum $110 million based on only 2x $55 million and growing revenues
Thanks for your thoughts. If so, this should flush it out a little faster with Ackman resignation - that seems serious and like almost a done deal. I suppose a higher offer could be in the works - we will see.
I hope it goes to $20 then to $100 as rumors have it.
This stock is GREAT!
This stock is GREAT!
If this goes to 100, WOW$$$
Wow - so this could go to .5? Amazing!!!
Any idea what typical uplisting does to the ol' pps? I would think it would at least double, but not sure.
Hi Rain - which one of these movies are tied to Hemdale? Thks
Very good thank you - I may pick up a few more and round it up to an even number.
Nope - was going to get in below .5, but was too volitile for me - now the reports are looking good. I like the company.
Does this board agree with Yahoo's - that this is going WAY UP?
Anyone think this will go back up to 6?
If their voices are tremblin with fear, that would not be good.
I don't like them voting soon to increase the number of OS.
I wish I had picked up a ton at 10 cents! Was thinking it would go to 6 cents as some on this board was callin.
Do you happen to have the phone number and id to call in?
I am not sure if it will go that far unless there is some real bad news. It is now stabilized and waiting for news IMO. It will go up or down depending upon good or bad news. Have you contacted sales or anyone regarding if they are getting some of that stimulus money?
Where's MY DIVIDEND???
The website seems to be a work in progress - much better than before; however, when I hit subscribe it went into DOS...
Low volume with positive gains - love it.
Strange stock - may need to rethink this one.
Great news$$$
Perhaps we break $2 tomorrow?
Great$$$
When the PR's come out stating they sold a mall - this would be perhaps a catalyst.
Looks like a winner!!!
I heard that GBE was selected to sell GGWPQ malls - has anyone else heard this?
$2.5 alright with me
I guess it depends upon news
Where's Sunday? Was he not the one calling for around 6 cents? Wow - wish I had loaded up around a dime.
$34 would be good for us - offer from BAM
To the moon Alyce!
Hope your right - seems logical to me. Pop on monday as news was not available to the general public - priviledged few may have gotten wind of this letter and ran up the price 5. This may jump another 5 to 10.
OK - great - so perhaps another pop on Monday - or was that news perhaps relaesed yesterday afternoon prior to the pop to 25?
Great letter! Anyone know when it was released - no date on it.