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Andrew Shapiro is Founder, President and Portfolio Manager of Lawndale Capital Management, an investment advisor that has managed activist hedge funds focused on small- and micro-cap companies for over 17 years. Mr. Shapiro’s proactive ownership approach has been effective in directly creating... More
  • 109-yr old Sparton Corp. (N-SPA) emerges from crypt with investor relations program - LINKS
    Sparton Corp. (N-SPA), founded as the Withington Company in 1900 in Jackson, Michigan and one of the oldest companies listed on the NYSE has a century long history of manufacturing technologically advanced equipment for the transportation, electronics, communications and defense industries. Until new turnaround management was brought in at the very end of 2008, Sparton also had as long a history of horrible investor relations and communication. That dark facet of Sparton's history has come to an end this past month with the emergence of Sparton's management from the bunker to more overtly tell its story of an impressive turnaround in progress.

    1) First unveiled at Sparton's annual meeting October 28 and then presented last week in New York City, Sparton's new CEO, Cary Wood, took this show on the road and made presentations to existing and prospective investors.  

    2) Today, Mr. Wood presented Sparton's story at an investor conference for the first time in Sparton's history, the SWIdeas conference (www.threepa.com/SWIdeas.html). ;For the time being, the audio webcast replay of that presentation can be found at www.wsw.com/webcast/threepa/spa/audio.asx

    3) Next week, on Thurs, Nov. 19th, 2009, at 11AM EST, Sparton will host a conference call to discuss its September Q1 (FYE 6/10) financial results and respond to investor questions. To participate, callers should dial (800) 757-8473. Participants should dial in at least 15 minutes prior to the start of the call. A Web presentation link is also available for the conference call: 
    https://www.livemeeting.com/cc/gc_min_pro_usa/join?id=Z3M3WC&role=attend

    4) Past presentations (and this upcoming one as well) of quarterly results from this new management team are now available on Sparton’s Web site: http://www.sparton.com in the “Investor Relations” section.

    5) We understand in early December, Mr. Wood will be coming to the west coast  for similar one/one presentations as his early November foray in New York City.

    Having been highly critical of Sparton's past investor relations practices, this vastly improved investor relations and communications program is certainly a pleasant facet of the new era at Sparton.   

    Long Sparton shares, presently with a 13D filing position. This author may buy or sell shares of Sparton at anytime. 
    Tags: SPA, BHE, CLS, FLEX, JBL, PLXS, SANM, SLR, ems, electronic manufacturing, underwater sensors
    Nov 11 12:32 pm | Link | Comment!
  • Reading International (RDI) Q3 Earnings
     Reading International (RDI) reported good quarterly results late last week. 

    The Q3 earnings full press release may be found on RDI's website at www.readingrdi.com/pdf/20091106%20Earnin...

    I note the following salient points: 

    1) Since the US dollar skyrocketed last year during Q3 08, this year’s Q3 09 was the final quarter of negative yr/yr currency headwinds for Reading. Despite those headwinds, Reading’s operating results were good. In local currency, Reading’s Australia and New Zealand cinema segments enjoyed continued revenue growth, in the case of Australia, growing better than US industry box office trends. Global box office releases for the remainder of 2009 and early 2010 (summer in Aus/NZ) look appealing. Going forward, for at least the next few quarters, yr/yr currency impacts on Reading’s operating cash flow, should finally become a tailwind.

    2) Good operating results and the quarter’s foreign currency improvement catapulted Reading’s book value/share to over $5. We believe this $5/share book value still greatly understates the current fair value of Reading’s Australian, New Zealand, New York and Chicago real estate, held for more than a decade that has since been upzoned and some developed. Thus, we feel true book value is well more than $5.

    3) Reading maintains substantial liquidity and an interest in accretive acquisitions of cash flowing assets. Sept 30 cash and marketable securities balances were $23.1MM and Reading has a combined $26.6MM of undrawn credit availability on its Australian and New Zealand Credit facilities. The company has filed of a universal shelf registration statement for up to $100MM of debt and warrants for debt and “units”, etc in addition to equity to enable Reading to act quickly to structure and finance growth transactions. 

    Other items of note :

    4) The Malulani litigation settlement gain, reported below-the-line as other income, is actually a recovery of several quarters of above-the-line s,g&a litigation expense. “Apples to Apples” analysis would call for this current quarter’s gain to be viewed as part of operating income. 

    5) Prior year 2008 revenues included multiple quarter lump sum recognition from completion of screen advertising revenue contract in Q3 2008. 

    6) During the quarter, Reading re-listed both classes of its common stock from the AMEX to the NASDAQ exchange, maintaining the RDI symbol and adopting the RDIB symbol for the Class B voting stock. The RDI shares trade as a component of both the Russell 2000 small cap and Microcap indices.

    Long RDI and RDI class B

     
    Tags: RDI, Theater exhibition, Movie Exhibition, Entertainment, Real Estate Development stocks
    Nov 09 03:18 pm | Link | Comment!
  • Reading International (RDI) Q2 2009 results
      Reading International (RDI) reported quarterly results this morning. The full press release may be found below:

    http://finance.yahoo.com/news/Reading-International-prnews-831025606.html?x=0&.v=1

    Despite strong yoy Australian/NZ currency headwinds, Reading’s total revenues and EBITDA increased by 1.2% and 76% yoy, respectively, reflecting another quarter of strong box office results. In local currency, Reading’s Australia and New Zealand enjoyed strong cinema revenue growth of 33% and 15.5%,respectively. Global box office releases for the remainder of 2009 continue to look appealing.

    The segment summary of the quarter were as follows:

     - Cinema segment (90% of Reading’s total revenue) revenue and EBITDA growth of 3.5% and 81.5%, respectively, was strong despite the previously mentioned Australian/NZ currency headwinds masking strong local results. This growth was driven by box office strength, and operational improvements at Reading’s Consolidated Entertainment cinema subsidiary (Hawaii/California) where operating income improved by 70% from prior year.

     - Real Estate segment (10% of Reading’s total revenue) revenue fell 6.6%, while segment EBITDA grew 0.9%% reflecting yoy Australian/NZ currency headwinds on that region’s rental revenue and cash flow streams. Reading’s Indooroopilly, (Brisbane, Australia) office property completed construction near the end of the quarter and as discussed, below, will begin contributing to Reading’s Real Estate operations in the current Q3.

    Other items of note :

    • RDI retired $22.9mm of its 9.2% Trust Preferred Securities (sub debt) acquired in a prior quarter, recognizing a sizable net gain of $10.8MM.  Note, while cash interest costs will decline by $2.1MM/yr from this debt retirement, going forward reported interest expense declines will be offset by cash interest costs (that didn’t change) but will now be expensed on properties newly classified as “held for development” that were previously classified as “under development” where under GAAP, interest expense was capitalized.  

    • The contracted purchaser of Reading’s Auburn (Sydney, Australia) shopping center (ETRC) and adjacent developable land elected not to continue making purchase option payments leaving Reading $1.5mm in non refundable deposit money (recognized below operating line).  Recently, there has been significant positive zoning developments in the area which we believe enhances options for the property and contiguous developable land and mitigates the fallout from losing this sale agreement on this decade long holding.  

    • Reading enhanced liquidity again during this past quarter. From prior quarter, June 30 cash balances increased to $22.1MM and debt declined to $224.8MM. Reading also renewed/extended the term of its New Zealand Credit Facility from November 2010 to March 2012. At June 30, Reading has combined $23.1MM of undrawn credit availability on its Australian and New Zealand Credit facilities.

    • From the quarter’s profits and improvement in the Australian/NZ currency during Q2, Reading’s shareholder equity rose 48% sequentially to $93.8MM at June 30, 2009. These currencies have continued to move higher during the current quarter but at a slower pace.

    Important subsequent events were as follows:

    • Reading re-listed both classes of its common stock from the AMEX to the NASDAQ exchange, maintaining the RDI symbol and adopting the RDIB symbol for the Class B voting stock. 
    • Reading and its partner finalized a sale and legal settlement with Malulani Investments and affiliates, recouping Reading’s investment and years of legal expenses via an upfront $2.5MM cash payment and a $6.75MM 3-year secured note, along with a ten year "tail interest" in Malulani and its parent company.  Reading’s arrangement with its partner calls for Reading to receive the first part of this $9.25MM until Reading has recouped its initial investment  and all costs advanced by Reading with respect to the litigation.

    • At the end of July, Reading’s new six-story Indooroopilly office building was completely leased out to the City of Brisbane under a three-year lease with options for additional extensions. The construction loan on this building was also paid off from Reading’s cash balances.
    We will start to analyze Reading’s 10-Q, which was recently filed at:
     
    http://www.sec.gov/Archives/edgar/data/716634/000071663409000030/form10q.htm


    LONG Reading International (RDI and RDIB) stock
    Tags: RDI, Theater exhibition, Movie Exhibition, Entertainment, Real Estate Development
    Aug 12 09:42 am | Link | Comment!
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  • Sparton Corp (NYSE- SPA) net income for fiscal Q1 2010 ended Sept 2009, represented SPA's first quarterly pre-tax profit in over 3 years.
    Nov 16, 2009
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