Q1-2020 CSM Financial results & OutcomeOk, INV. fellows, I got chance to take a look at CSM q1'20.
- There is something wrong here and did strike me, their CEO "Yves" started his shareholders letter blaming Covid 19_OPEC & Russia for the very bad and disappointed results in Q1'20................but wait a minute, we know that both events did happen on or after March 20, 2020!!!!.......so such events should not have any impact on CSM results.........there must be under performance by the operation team...or losing money in some areas.....
- Also he saying "Nevertheless, the Company's performance in the first quarter of 2020 increased in comparison to the same period in 2019....."....... again covid 19, OPEC, Russia events happened in the last 10 days of Q1'20 so it should not have any impact on Q1'20 results...........
- "we have also requested our lenders to defer interest and principal payments, waive compliance with financial covenants if required and defer other payments and fees"............ What that means???.......if you don't have answer yet then don't address it......
- Overall the letter did not address any of key financial results in Q1'20, overall I would rate it 1 out 10.......you can't give zero in investment world!
- Disclaimer on the face of the "Letter of Shareholders"!!!!
- Lets take look at the numbers, so revenue increased by 50% vs. q1'2019.....but if you look at gross margin it did increase by only 5%......WHAT?......there must be something wrong here......it looks like operation is underperforming, very obvious they are losing money in the execution phases...........what’s going on here!!!!
- if you go further down, they recorded non-cash impairment, $5M too early!!!, most of the companies waited to Q2'20, who is your external auditor??? Get some advice!
- AD-EBITDAS for q1'20, very disappointed..................change is needed!!!
- The MD&A analysis and discussion don't make any sense, they can't blame Covid 19, OPEC, Russia for the bad results in Q1'20, these events happened in the last 10 days of Q1'20 so it should have immaterial impact....................
- SG&A...comment,.... they are saying "SG&A decreased y-o-y!!!! but in fact it did increase....$6,542 in 2020 vs. $5,150 in 2019...........so it did increase not decrease...........you can't use % as basis of compression, you are reporting numbers not percentages, this abc....financial reporting fundamentals........Do they have a "Financial Reporting Team"!!!!!!.....
- Interest burdens increased, bad decisions made in 2019 to overload the company with more loans to acquire outdated assets.............
- CSM mentioned........ "Adjusted EBITDAS as a percentage of revenue decreased due to gross profit decreases in the Maintenance and Construction Services segment and Wear Technology Overlay Services segment.".............why such decrease???????? Don't blame covid19 or OPEC, Russia, be realistic!..
- Cash flow is very disappointed as usual for this company, so no need to waste my time on it.
Overall very disappointed performance & results from the current management team! Do something!......does anyone know when they will have their next investor call so we can ask these questions and grill them!