SlowAppreciation Posted January 31, 2018 Share Posted January 31, 2018 https://www.docdroid.net/aAW5LqM/arquitos-capital-q4-2017.pdf Link to comment Share on other sites More sharing options...
mbrock77 Posted February 14, 2018 Share Posted February 14, 2018 Earnings out https://finance.yahoo.com/news/alj-regional-holdings-inc-announces-211000301.html Link to comment Share on other sites More sharing options...
Tim Eriksen Posted February 14, 2018 Share Posted February 14, 2018 Carpets and Phoenix continue to look like bad acquisitions. For the life of me I do not see what others (who I have great respect for) see here. Link to comment Share on other sites More sharing options...
mbrock77 Posted February 14, 2018 Share Posted February 14, 2018 Also, getting a little close to breaching their leverage ratios, no? Link to comment Share on other sites More sharing options...
Foreign Tuffett Posted February 15, 2018 Share Posted February 15, 2018 Also, getting a little close to breaching their leverage ratios, no? I agree. At this point you don't have to have much imagination to conceive of ALJ going bankrupt during the next recession. I think it's fair to describe their quarterly results as "challenged", as Ravich does in the press release. Thoughts on their three segments: 1) The carpets segment can't consistently generate positive adjusted EBITDA, even in a strong Las Vegas housing market. I think they should try to sell this to a larger building materials company that can create real synergies. 2) The Phoenix segment printed a -6.9% organic growth revenue #. If their revenue keeps declining ALJJ is in trouble. 3) Faneuil, which I think is the best part of their business, produced a strong revenue #. The issue is that it isn't large enough to carry the entire company, the other two segments need to pull their weight too. Link to comment Share on other sites More sharing options...
LowIQinvestor Posted February 15, 2018 Share Posted February 15, 2018 No clue why anyone thinks this is a good company to own: What is the bull case here? http://www.aljregionalholdings.com/news-and-events/news/press-release-details/2018/ALJ-Regional-Holdings-Inc-Announces-Earnings-For-The-First-Quarter-Ended-December-31-2017/default.aspx Link to comment Share on other sites More sharing options...
_JJ_ Posted February 15, 2018 Share Posted February 15, 2018 Well, obviously not a great quarter. But in their conference call on January 5th (so after the just reported quarter finished) they guided for midpoint FCF of $19 - $20M for the year ending September 30th 2018. That would be almost a 20% FCF yield. Don't ask me if that's realistic, but that's pretty much the bull case: high FCF yield + rapid deleveraging. Link to comment Share on other sites More sharing options...
Foreign Tuffett Posted February 15, 2018 Share Posted February 15, 2018 Well, obviously not a great quarter. But in their conference call on January 5th (so after the just reported quarter finished) they guided for midpoint FCF of $19 - $20M. That would be almost a 20% FCF yield. Don't ask me if that's realistic, but that's pretty much the bull case: high FCF yield + rapid deleveraging. I totally agree on this being the bull case. The bear case is that this is an overleveraged "bet the jockey" type stock with (1) a distracted Chairman who has a full time day job and is facing sexual harassment allegations (2) two poorly performing business segments in a very strong US economy and (3) a real chance of going bankrupt. Given how poor their results were, I think the stock should be down more than it is. Link to comment Share on other sites More sharing options...
LowIQinvestor Posted February 15, 2018 Share Posted February 15, 2018 With the debt on this thing it could be a zero Link to comment Share on other sites More sharing options...
Foreign Tuffett Posted March 10, 2018 Share Posted March 10, 2018 Ravich is on the board of Cherokee Global Brands (CHKE), a business I don't claim to be particularly familiar with. Ravich owns lots of CHKE shares and was buying more late last year. He's actually been on the board since 1995. He has also loaned the company money in the past. CHKE has a loan from Cerberus. Per CHKE's latest 10-Q: "As of October 28, 2017, the Company was not in compliance with certain of its financial covenants set forth in the Cerberus Credit Facility (see Notes 8 and 11) and there is substantial doubt about the Company’s ability to continue as a going concern." I believe they have taken some steps in the last few months to improve their liquidity situation. As you might imagine, CHKE's 5 year chart is absolutely horrific. Hmm....Ravich owns lots of shares, loan from Cerberus, Ravich as director, overly leveraged....it all seems so familiar. Will ALJJ also breach the covenants on its loan from Cerberus? If so, will Ravich loan it money? Link to comment Share on other sites More sharing options...
Foreign Tuffett Posted March 20, 2018 Share Posted March 20, 2018 Ravich recently bought more shares on the open market. Since the purchases were made only about 2 weeks away from the end of the quarter, a reasonable person might suspect that ALJJ's next set of quarterly results will be significantly better than their last. https://www.sec.gov/Archives/edgar/data/1094988/000094787118000251/xslF345X03/ss84412_4.xml Link to comment Share on other sites More sharing options...
Snorky Posted March 26, 2018 Share Posted March 26, 2018 Is anyone a buyer at these level ? Link to comment Share on other sites More sharing options...
Foreign Tuffett Posted May 16, 2018 Share Posted May 16, 2018 I bought some of this yesterday at $1.85. Given the risks inherent in their debt load, this is a small position for me. Here are a few notes, in no particular order: * If they hit the lowpoint of their 2018 adjusted EBITDA guidance the company is trading for less than 5.5X EV / adjusted EBITDA. Even after I made some adjustments due to [insert Buffett's standard criticisms of EBITDA here], the company still looks cheap. * D&A runs far in excess of capex, with lots of amortization expense that I don't think has much bearing on economic reality * The quarterly segment revenue guidance the company is providing doesn't seem to make much sense. The midpoint of the Q2 revenue guidance was $87.55M. The actual print was $95.1M! I think their Q3 revenue guidance is similarly conservative, due to a mismatch between the revised 2018 EBITDA guidance and Q3 revenue guidance. I don't think both can be right. * The EV of the company is currently less than the sum of what they paid for their acquisitions. I don't think this is a decisive data point, but it means more than nothing. * I don't give the NOLs or Carpets any value in my model. I continue to think they should sell the Carpets segment. Link to comment Share on other sites More sharing options...
Foreign Tuffett Posted July 5, 2018 Share Posted July 5, 2018 I bought some of this yesterday at $1.85. Given the risks inherent in their debt load, this is a small position for me. Here are a few notes, in no particular order: * If they hit the lowpoint of their 2018 adjusted EBITDA guidance the company is trading for less than 5.5X EV / adjusted EBITDA. Even after I made some adjustments due to [insert Buffett's standard criticisms of EBITDA here], the company still looks cheap. * D&A runs far in excess of capex, with lots of amortization expense that I don't think has much bearing on economic reality * The quarterly segment revenue guidance the company is providing doesn't seem to make much sense. The midpoint of the Q2 revenue guidance was $87.55M. The actual print was $95.1M! I think their Q3 revenue guidance is similarly conservative, due to a mismatch between the revised 2018 EBITDA guidance and Q3 revenue guidance. I don't think both can be right. * The EV of the company is currently less than the sum of what they paid for their acquisitions. I don't think this is a decisive data point, but it means more than nothing. * I don't give the NOLs or Carpets any value in my model. I continue to think they should sell the Carpets segment. Sold all my ALJJ shares recently at $1.90 - $1.95. Even though, I made a little money here, I consider having bought ALJJ initially a mistake, as it broke my "never buy anything that has more than a minuscule chance of being a zero unless there's a overwhelmingly strong and compelling reason to do so" rule. While I still think ALJJ is cheap, it's not so stupid cheap that i feel compelled to own it. Link to comment Share on other sites More sharing options...
RoadToUtopia Posted August 1, 2018 Share Posted August 1, 2018 Anyone still following this one? I'll be attending the annual meeting on 8/17. I would be happy to ask mgmt any questions folks might have. Link to comment Share on other sites More sharing options...
Foreign Tuffett Posted August 1, 2018 Share Posted August 1, 2018 Anyone still following this one? I'll be attending the annual meeting on 8/17. I would be happy to ask mgmt any questions folks might have. Two questions off the top of my head: 1) Why has the "Carpets" segment underperformed in a strong Las Vegas housing market? Is Ravich willing to divest this segment if performance does not improve? 2) Any plans to de-leverage? Link to comment Share on other sites More sharing options...
OracleofCarolina Posted October 26, 2018 Share Posted October 26, 2018 Anyone still on this? Any updates from the meeting a couple of months ago? Link to comment Share on other sites More sharing options...
Tim Eriksen Posted August 1, 2019 Share Posted August 1, 2019 Another acquisition, lowered guidance, and private placement. https://www.prnewswire.com/news-releases/alj-regional-holdings-inc-announces-acquisition-of-realtime-digital-innovations-llc-amendment-to-term-loan-and-credit-facility-full-time-commitment-of-chairman-of-the-board-and-chief-executive-officer-and-preliminary-third-qu-300894110.html Link to comment Share on other sites More sharing options...
ragnarisapirate Posted August 1, 2019 Share Posted August 1, 2019 Another acquisition, lowered guidance, and private placement. https://www.prnewswire.com/news-releases/alj-regional-holdings-inc-announces-acquisition-of-realtime-digital-innovations-llc-amendment-to-term-loan-and-credit-facility-full-time-commitment-of-chairman-of-the-board-and-chief-executive-officer-and-preliminary-third-qu-300894110.html BUT. Look at what has happened to the company’s backlog! Woah! Link to comment Share on other sites More sharing options...
Foreign Tuffett Posted August 1, 2019 Share Posted August 1, 2019 Any thoughts on Ravich's new pay package? Link to comment Share on other sites More sharing options...
ragnarisapirate Posted August 1, 2019 Share Posted August 1, 2019 Any thoughts on Ravich's new pay package? Seems that they are indicating that they want to sell businesses and de-lever- no? Link to comment Share on other sites More sharing options...
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