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  • Willdan: 20% Free Cash Flow Yield, A Ft. Knox Balance Sheet, And Promising Opportunities In Energy Efficiency And Transport Infrastructure [View article]
    Thomson One....
    Dec 19 06:06 PM | Likes Like |Link to Comment
  • Willdan: 20% Free Cash Flow Yield, A Ft. Knox Balance Sheet, And Promising Opportunities In Energy Efficiency And Transport Infrastructure [View article]
    Thanks, interested to hear any new info or thoughts you get.
    Dec 19 11:58 AM | Likes Like |Link to Comment
  • Willdan: 20% Free Cash Flow Yield, A Ft. Knox Balance Sheet, And Promising Opportunities In Energy Efficiency And Transport Infrastructure [View article]
    Thanks for the list of good questions. I will do my best to answer them. On ROIC, I use current assets, removing cash, less current liabilities, or about $32m less $10m cash less $15m A/P or about $7m net working capital investment + net PPE < $1m. I do not add back goodwill. LTM EBITDA is about $4m with minimal cap ex and I expect EBITDA to grow. So ROIC is $4m/$8m or 50%. The key point is the business has potential to generate solid FCF and doesn't use a lot of assets. I am looking forward not backward so I don't penalize for goodwill write offs but those are certainly a ding on management performance. On early 2012, management mistakes, yes, they should have cut costs much faster, they should have not been surprised by the contract delays. You can read CEO mea culpa on Q1 and Q2 calls in 2012 and I give him credit for taking responsibility. Also, they let working capital get out of control, up to 133 days or so, that was a disaster. I hope they learned their lesson but if that happens again, it won't be good, because it obviously eats up cash big time. On buybacks/dividends, I don't really expect these. I expect management to try to do tuck in acquisitions to build up energy over time. I am hoping they are very careful and execute well but this could be another risk. On cyclicality, I would actually argue we could be heading into an up-cycle on engineering services biz and also that energy segment will help smooth out cyclicality over time. So I am hopeful it could become a less cyclical type company, but this is clearly not certain. Lastly, on the EBITDA margin, they are running at about $34m in cash operating expenses, gross margins are improving to mid 40s, and I am hoping for some revenue growth by 2015, to maybe $95m (might be aggressive). This is far from certain, but they have said their backlog is strong for 2014. Assume 44% GM = $42m GP - $34m Op ex = $8m Adjusted EBITDA. And maybe that happens by 2015. This is all very ballpark. Key is that there is a lot of room for error here (I hope). If they can even head towards my numbers, investors should do Ok. But I have found it best to rely on general projections and leave a lot of room for error in case things happen, which they almost always do. Hope this helps. Best, Andreas.
    Dec 18 05:46 PM | 1 Like Like |Link to Comment
  • Willdan: 20% Free Cash Flow Yield, A Ft. Knox Balance Sheet, And Promising Opportunities In Energy Efficiency And Transport Infrastructure [View article]
    I think engineering segment (40-45% revs) is pretty exposed to government spending, either through infrastructure projects, or providing outsourced engineers to local government. However, I would just point out these projects / revs are lumpy w/ long sell cycles and can be volatile quarter to quarter, even with the tailwinds. for example, the high speed rail project in CA they have talked about may not happen any time soon (if at all), although they have said they have not counted on it in their 2014 backlogs. Overall, yes, hoping for nice tailwinds in 14 and 15.
    Dec 17 12:20 AM | Likes Like |Link to Comment
  • Willdan: 20% Free Cash Flow Yield, A Ft. Knox Balance Sheet, And Promising Opportunities In Energy Efficiency And Transport Infrastructure [View article]
    Yes, I think its a good risk reward, but mgmt needs to deliver the goods. Hope its not a lump of coal. Best, Andreas
    Dec 16 07:09 PM | Likes Like |Link to Comment
  • Willdan: 20% Free Cash Flow Yield, A Ft. Knox Balance Sheet, And Promising Opportunities In Energy Efficiency And Transport Infrastructure [View article]
    i think it is non cash write downs of goodwill related to earlier acquisitions.....
    Dec 14 11:22 AM | Likes Like |Link to Comment
  • Willdan: 20% Free Cash Flow Yield, A Ft. Knox Balance Sheet, And Promising Opportunities In Energy Efficiency And Transport Infrastructure [View article]
    thanks for the industry insights. i am always trying to dig deeper into my investments so your inside perspective is helpful.
    Dec 13 09:01 AM | Likes Like |Link to Comment
  • Willdan: 20% Free Cash Flow Yield, A Ft. Knox Balance Sheet, And Promising Opportunities In Energy Efficiency And Transport Infrastructure [View article]
    Thanks. I hope it turns out to be a gem. Time will tell.
    Dec 12 07:47 PM | Likes Like |Link to Comment
  • Willdan: 20% Free Cash Flow Yield, A Ft. Knox Balance Sheet, And Promising Opportunities In Energy Efficiency And Transport Infrastructure [View article]
    on management track record, keep in mind CEO joined in 2007 and walked into a pretty difficult situation, given the focus on real estate infrastructure in SoCal. I give him some credit for the diversification into energy efficiency to offset this decline. that said, management mistakes clearly led to the problems in early 2012 and that has to be considered. I am hopeful that will stay laser focused on generating FCF and effective deployment of excess cash but we will have to see.
    on FCF, you probably have a good point on the NOL, but even if we use EBITDA and assume a modest multiple, we get a pretty strong valuation. Given the energy efficiency focus and growth opportunities therein, I am hoping the business will be less cyclical going forward, so not sure I would view 2015 as peak cycle. I am hoping there less cyclicality going forward. we will have to see...
    Dec 12 01:55 PM | Likes Like |Link to Comment
  • Willdan: 20% Free Cash Flow Yield, A Ft. Knox Balance Sheet, And Promising Opportunities In Energy Efficiency And Transport Infrastructure [View article]
    thanks for the nice comments...yes, same person....I have high hopes for this idea but keep in mind I never bet too much on any one position, so I would size it accordingly....I can definitely be wrong....but I think its an attract risk-reward near these levels...we will see.....
    Dec 12 01:46 PM | 1 Like Like |Link to Comment
  • Willdan: 20% Free Cash Flow Yield, A Ft. Knox Balance Sheet, And Promising Opportunities In Energy Efficiency And Transport Infrastructure [View article]
    yes...it does on energy efficiency contracts....
    Dec 12 01:43 PM | 1 Like Like |Link to Comment
  • Harris Interactive Offers A Double-Digit, Unleveraged Free Cash Flow Yield With A Proven Turnaround Manager [View article]
    This worked out well. HPOL is being bought out for $2 per share by Neilsen Holdings, which is a significant premium to $1.15 per share when we wrote this up.
    Dec 12 06:50 AM | 1 Like Like |Link to Comment
  • Globalscape Is An Overlooked And Undervalued Play On Mobile Growth [View article]
    Nice write up and good points. I wrote this up recently for another website and I agree with your thesis. I would also point out that having the U.S. Army as a customer when you are a secure MFT software company is pretty impressive and probably speaks to the strength of the software product. I invest in small and micro caps I think the net cash balance sheet here is a major positive and really reduces risk. Further, I would expect the net cash position to grow over next two years absent acquisitions, dividends, or buybacks. I think another $10m+ in net cash could pile up over next couple years which would get you to about $20m in net cash at end of 2015 and based on 10x FCF of $6m for the business, which I don't think is unreasonable, results in a market cap of $85m or $4+ per share. I have invested in a number of small software companies and I think 10x FCF would be a modest valuation. I agree with you that this is a steady FCF play and build up in net cash position on b/s over time and the recurring M&S revenue is very valuable asset. To me, the base enterprise product and growth of M&S revenue over time will be the key driver and mobility is an added benefit. There are, of course, things that can go wrong but, like you, I see GSB as a pretty asymmetric investment at these levels. Thanks.
    Nov 24 01:44 PM | Likes Like |Link to Comment
  • Rumors Of RadioShack Refinancing Are Unlikely [View article]
    there have got to be better ways to make some money than this...
    Sep 1 09:51 AM | 1 Like Like |Link to Comment
  • Softchoice Offers Investors 15%+ Free Cash Flow Yield And A 'Ft. Knox' Balance Sheet [View article]
    This idea worked out well: SO.TO announced a deal to be acquired by Birch Hill Equity Partners for $20 per share in cash.
    Apr 24 09:24 AM | 1 Like Like |Link to Comment
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