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Deep Value One

 
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  • Books-A-Million: Deep Value In Retail [View article]
    Sorry for delay in response. My maintenance capex number is based on discussions with management and earnings calls. The historical capex you mention includes investments made in real estate, other investments and during a period of store count growth. Therefore, I would not consider that $15.9 MM average as a "maintenance" capex measure. Additionally, as it seems (from recent earnings calls), management views the bookstore retail as a declining business, I see the maintenance capex measure as being more relevant in my analysis above.

    As for the Yogurt Mountain acquisition, I agree that as of now that doesn't seem like the best use of capital however, I am happy to see that they are investing in non-bookstore businesses. They will probably have hits and misses, and only time will tell which category their investments fall into.

    The plane purchase is not great to hear but it was paid with a $0.6 MM promissory note. That doesn't sound too egregious. Considering the size of the family's holding, the related party transactions are relatively minor and from my analysis of the company's history, the family has generally run it pretty honestly. Note, I do not fault them for trying to buy the company at an opportunistic price since it was not done in a unethical manner.

    DVO
    Nov 8, 2013. 01:03 PM | Likes Like |Link to Comment
  • Books-A-Million: Deep Value In Retail [View article]
    I base the OCF estimate on an rough "average" of last two fiscal years. Note, that the last year saw a significant drop in OCF vs. prior years which much was due to working capital items. It is possible that my estimate of OCF going forward is wrong if sales continue worsening. Due to many of the points I made in the article, I believe that there will be some stability in FCF (OCF - maintenance capex).
    Oct 23, 2013. 04:00 PM | Likes Like |Link to Comment
  • Books-A-Million: Deep Value In Retail [View article]
    It is possible. There are no guarantees in investing.
    Oct 8, 2013. 01:03 PM | Likes Like |Link to Comment
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