Post by
screamer99 on May 19, 2022 8:59am
Q4 results - shaking my head
What the company doesn't present / mention:
1. The EBITDA of $16m is substantially all from the net gain on the sale of the JV interest.
2. With the above, EBITDA would have been break-even for the quarter.
3. What they did is bury a "long-term" provision of $13m related to the claims that was first recorded in Q4. They've finally acknoweldged there should have been something recorded in the accounts related to future claims which was the subject of my previous posts, but this is amount is a fraction of the potential liability.
Without the above provision, cash claims costs are around $6m which is higher than last year.
4. No mention of the number of claims settled in the quarter or how many remain to be settled. This is a major red flag IMHO. If trends were improving (e.g., claims decreasing or cost per claim decreasing), they would have presented the info.
With the order backlog > 12 months returning to historical norms, I'm expecting a neutral year next year (but still profitable). With the backlog informaiton provided over the last 4 - 6 quarters, no doubt this year was going to be a record year. Can it be repeated? I don't think so.
When you realize the company's cash balance is funded by customer deposits, the cash position isn't as impressive.
Obviously plenty of cautionary notes here and with less information disclosed, I'm continuing to wait on the sidelines. Good luck to those who continue to hold.
Comment by
knicksman on May 19, 2022 2:32pm
100% agree. I think they can generate $30m to $40m in EBITDA next year. The biggest opportunity remains with the working capital. I think they have at least $70 million of excess working capital. It should improve over time. Hopefully they put that capital back to work in a better way.
Comment by
undervalue on Jul 08, 2022 11:24am
Question asked on call. Asbestos, same as last q 4.3 million. ST was annoyed.
Comment by
1condor on Oct 19, 2022 12:21pm
screamer99...good call..since your July post the stock has fell from 8 bucks to about 5. One has to wonder if it going to dip to the 2020 lows (just above 4 dollars). I will continue to monitor and may look at a trade on further weakness.