Yes,you are a little more optimistic then I and here are why............
In this analysis/tables,I separated IFVH income statement into three components:IFH(exclude IGourment),IGourmet ,plus consolidation adjustment.The three component approach used here hopefully provides more visibility/exposure/insight of the core business(trend in particular),and accretive sale of the new acquisition,and synergistic adjustments of the combined components/operations.
My assumptions on IHF,component 1:
1. 2018 sale/eps projection mirrors 2017,all based on identical performance of 2018Q1/2017Q1:1% revenue growth,cost at 68%(no change),sg&a at 23%(no change).
2. 33 million shares for 2018 and 34 million shares for 2019.
Table 1-
2018 IFV income/eps,component 1
IFH*********Q1****Q2****Q3****Q4***Total
revenue***9.5***10.5***10.5***10.8***41.2
eps********2.9c***4.2c***4.8c***3.3c***15.2c(14.7c for 2019)
My take:
A. The core business revenue Q/Q: trend line is broken in Q1 2018 and the growth rate is flattened down to practically 0%.Also Pro forma comparison of 2017Q1/2018Q1 in the latest 10Q,confirmed it.
My assumptions on IGourmet,component 2:
1. 2018 sale/eps projection also mirrors 2017,all based on yearly performance of 2017/2016:Revenue up 2.3%,cost up 3%,sg&a down 1%,or net even as the bottomline(no growth) is concerned.
3. Weigh factor for quarterly sales are: 1Q(20%),2Q(20%),3Q(20%),4Q(40%)
4. !Q revenue prorated as of Jan 23.
5. 33 million shares for 2018 and 34 million shares for 2019.
Table 2-
2018 IGourmet income/eps,component 2
IFH*********Q1****Q2****Q3****Q4***Total
revenue***1.4****1.8****1.8****3.5****8.5
eps*****-0.5c***-0.7c***-0.7c***-1.4c***-3.2c(-3.5 for 2019)
My assumptions on consolation adjustment,component 3-the most subjective component of all,particularly on the cost savings:
1. One-time expense is capped at $200K.
2. Added adjustments due to IGourmet in 2018 are being off set by higher-than-normal compensation expenses in 2017,or net even to be exact.
Table 3-
2018 Consolidation adjustment,component 3
ADJ*********Q1****Q2****Q3****Q4***Total
one-time**-0.6c***0.0c***0.0c***0.0c***-0.6c
or
For all three
2018IVFH income/eps,all,and before cost cutting adjustments
revenue***10.9****12.3****12.3****14.3****49.8
eps********1.4c****3.5c****4.1c****2.6c****11.6c(11.2c for 2019)
then you add the savings
For every $0.5 million deduction in sg&a from the baseline of $11.8 million(combining IFV of $8.9 and IGourmet of $2.9):
add 1.5c to the eps(annualized).
2018 eps 13.1c=11.6c+1.5c($11.5 million and 0.5 million deduction used)
2019 eps 12.7c=11.2c+1.5c($11.5 million)
Conclusion:
No growth from the core business and the newly acquired business,are likely in the near future.The synergistic topline increase is low to non-existent,and limited to the cost side only.PE likely be capped below 6 for longer than liked.
I stand by my earlier remarks made on 5/17/2018
"eps: 12c-15c(2018) "
"pe: 4-5 or the $1.38 high would not be breached until 2nd half of 2019."
"perception of a "growth company" is broken,main cause for the pe shrinkage,eps>3c is a must for next q to stop the slide.A lot of squeezing ahead for Sam to do ASAP and a chance to see what this CEO is made of or rather lack of."
