Mega Brands Inc MBLKF

Clarification on something I am missing.

[langer]

I am attempting to use historical SP along with the share dilution and subsequent consolidation in order to come up with a BASIC SP value comparison over the last 4 years.

Numbers I am working with:

Before share dilution 60,000,000 shares outstanding, $20.00 SP (2007)
After share dilution 556,000,000 shares outstanding
.50 SP
After share consolidation 28,000,000 shares (16,000,000+12,000,000 warrants) $7.50 SP

As the SP was $20 prior dilution comparative value of the SP after dilution would be 2.00 (1/10 the value). With the consolidation of the shares (20 to 1) the value comparison today is $40.

This is just a SP value assessment and has no basis other than a starting SP and share dilutions and consolidations. It does stand to reason however that the market previously valued MB at a much higher value with the Co. in much worse financial shape (dept).

Did I missing something. Please feel free to pick apart my math, as when things look to good to be true they usually are.

[nerzaa]

in short, eps is a lot lower than it was in 2006.

[langer]

I get that. I was more interested at this point to ensure I understood the before / after picture in term of additional shares / consolidation in relation to "a point in time in 2007.As far as why the SP is lagging ... no question due to EPS. They are on track for $400,000,000 rev this year. Once the warrants are issued the debt will be more or less done and EPS will have the potential to get

[FFHwatcher1]

In 2005, MB had about 30M shares outstanding.2005 sales were $400M.Earnings before tax were about 15% of sales.Net earnings after tax were about 10% of sales.2005 Debt was $300M due to the Rose Art acquisition.In 2011, MB may have about $400M of sales again.Shares outstanding are about 16.4M now.Debt (debenture) is about $120M plus $20M in debt on their working capital credit facilityWarrants will

[langer]

Thanks for the reply / info.Question: was net earnings after tax of 10% inclusive of interest payments on the $300M? If it inc.'ed the interest payments I'm amazed they still managed a 10% profit. I'll have to find 2005 and 2006 year end reports to get more deets.At the end of the day the lack of debt is key. Roughly same amount of Shares (post warrants) and rev should be similar. I

[jjsto]

So, I agree FFH that "margins are the key driver of share price improvement." I closed out my position in the warrants a long time ago, so I havent looked at the numbers in a while. Back then, I looked at the 03,04,05 annual reports and tried to get a feeling for the business both pre and post rose art acquisition in terms of margins. Once the recall/litigation began, the numbers