IEC Electronics: A Misunderstood Company At A Fraction Of Private Market Value [View article]
Enterprise value: In the valuation tables near the end of the article, "EV" stands for "enterprise value".
Debt: IEC has $30.5 million of net debt. Trailing EBITDA is $16 million, so net debt/LTM EBITDA is under 2x. The company does not currently pay cash taxes, so an additional $4 million or so of cash is available for debt reduction each year until the NOL is exhausted.
Shareholder value: Barry Gilbert was appointed interim CEO on June 6, 2002. The closing price of the stock that day was $0.23. Yesterday's close was $6.42. That means that during Mr. Gilbert's ten-year tenure, the value of IEC stock has increased 27 times, or 38% annually.
GTLT: See What Insiders See - A Growing Company For 5x Cash Earnings [View article]
JWG,
GTT is unlikely ever to own traditional carrier assets such as towers, fibre, etc. I believe Mr. Bauer's "more asset-based" comment referred to GTT's IP network.
GTT's acquisition of nLayer was the first, and likely the biggest, step in this transition. Before GTT bought nLayer, nLayer invested significantly to install first-class Junpier routing equipment at its important peering locations. After GTT bought nLayer, GTT quickly started outfitting its important legacy GTT locations with matching Juniper equipment. This is why capital expenditures were abnormally high in the most recent quarter.
These investments created a routing infrastructure that enables GTT to offer a very strong IP transit service. IP transit is a key offering for customers who provide "cloud" applications like SAAS, as well as other high-growth but bandwidth-intensive products such as streaming video. You can read more about the GTT IP transit offering here: http://bit.ly/WyCHbX
In short, I think a lot of the investments involved in this "more asset-based" transition have already been made.
GTLT: See What Insiders See - A Growing Company For 5x Cash Earnings [View article]
The release you linked to shows $9M of adjusted EBITDA in 2011. I use $8.4M because I don't add stock compensation back to EBITDA. I do, however, add back the $1M of restructuring and severance, as those costs are non-recurring expense that arise from acquisitions.
GTLT: See What Insiders See - A Growing Company For 5x Cash Earnings [View article]
Unfortunately I am not aware of any other publicly-traded VNOs. Every public company I know of that offers similar services (Cogent and Level 3 are two examples in the U.S.; Colt is an example in the U.K.) operates an asset-based fiber ownership model.
Autoinfo: A Growing Truck Freight Broker Not Priced Like One [View article]
AUTO's agent-based model is discussed in the article. There are a number of 3PL companies that use a mix of agents and salaried brokers, including ECHO and RLGT in the public sphere.
GTLT: See What Insiders See - A Growing Company For 5x Cash Earnings [View article]
GTLT does not directly compete with traditional carriers. Many of the services GTLT offers are supplemental to the standard offerings from the big carriers. In fact a number of the carriers are both customers and suppliers of GTLT.
GTLT is a middle man between 800+ telco suppliers and 1,000+ customers. It enables efficient aggregation of bandwidth and other telco services. Without a party like GTLT serving as a middle man, this network of buyers and sellers would be exponentially more complex and inefficient (imagine 1,000 customers each contracting individually with 800 suppliers). In addition, GTLT is able to improve the quality and capabilities of the telecommunications network it provides by using select physical assets of its own in order to supplement and improve the services it buys and re-sells.
The carriers still get paid by GTLT. In essence GTLT is finding business for the carriers that the carriers might not other find, and then taking a cut of that business.
Autoinfo: A Growing Truck Freight Broker Not Priced Like One [View article]
Yes. Whether there is a price that would make both sides happy is a different question.
You can find the list of the largest truck freight brokers here: http://bit.ly/WQBn4m
Of the top ten truck freight brokers, CHRW, LSTR, and ECHO are public but bigger than XPO. Hub Group and Pacer are intermodal 3PLs--not the business XPO is aiming for. Transplace and Yusen are diversified 3PLs that provide numerous services in addition to truck freight brokerage. Freightquote uses an online business model. Total Quality is a pure-play truck freight broker, but it is on the border line of being too large for XPO to acquire.
The story is similar when you look at the brokers ranked 10th to 20th by size. JB Hunt, Matson, and BNSF are captive subsidiaries of larger asset-based transportation companies. England, Jacobson, and MIQ are diversified 3PLs. TTS specializes in trade shows.
Out of the top 20 providers, Autoinfo, PLS, Coyote, and Allen Lund appear to be the only standalone pure-play truck freight brokers that XPO could acquire without taking on additional debt.
So yes, I think AUTO is a valid takeover target for XPO. AUTO represents one of the best available opportunities to reach scale quickly in domestic truck freight brokerage.
Autoinfo: A Growing Truck Freight Broker Not Priced Like One [View article]
David,
Autoinfo bought Sunteck in 2000. The Autoinfo corporate name is a holdover from the period prior to 2000, when the company was in other businesses. Today Autoinfo is solely a truck broker.
GTLT: See What Insiders See - A Growing Company For 5x Cash Earnings [View article]
I define cash earnings as the pro forma cash profits of the business as currently configured. My calculations are contained in the middle portion of the final table in the write-up. The primary adjustment is the substitution of CapEx for D&A. I calculate $0.44 of cash earnings assuming a full tax rate, and $0.50 assuming no taxes.
I do not use the LTM cash flow statement, as you are doing, because the trailing twelve month financials do not include a full year's contribution from the nLayer assets, and because they include one-time expenses related to the nLayer acquisition.
GTLT: See What Insiders See - A Growing Company For 5x Cash Earnings [View article]
Your claims: 1) GTT has 50 million in debt 2) GTT owns "very little" assets 3) GTT is "begging" for a buyer
Claim 1 response: Your claim that GTT has $50 million of debt is simply untrue. The company has $36.5 million of long-term debt and $7.3 million of short-term debt. $36.5 + $7.3 = $43.8. The company also holds $4.3 million of cash. That means debt net of cash is $39.5 million (43.8 - 4.3 = 39.5). I have pasted the liability side of the most recent balance sheet below.
Current liabilities: Accounts payable $ 14,710 Accrued expenses 10,919 Short-term debt 7,262 Deferred revenue 6,710 Total current liabilities 39,601
Long-term debt 36,455 Deferred revenue 264 Other long-term liabilities 6,029 Total liabilities 82,349
Claim 2 response: GTT's most recent balance sheet showed $99.5 million of assets, or approximately $5.00 of assets per share--2x the current share price.
Claim 3 response: I do not see what reason GTT has to seek a buyer, much less beg for one. To the contrary, selling out now would leave a lot of value on the table and be a poor decision. The corporate strategy is working, the stock price is rising, the company is in fine financial shape, and the industry landscape is still full of attractive acquisition candidates. Moving to NASDAQ will be a significant catalyst for further share price appreciation. GTT management is well aware of each of these points and knows that the company's intrinsic value is substantially higher than the current share price--hence their ongoing stock purchases.
GTLT: See What Insiders See - A Growing Company For 5x Cash Earnings [View article]
My investors and I own shares in GTLT. We stand to profit from their appreciation. I have no relationship with, and do not receive any compensation from, Global Telecom & Technology, nor any other company I write about for that matter.
Autoinfo: A Growing Truck Freight Broker Not Priced Like One [View article]
"Dead money" is a strange term for shares that have spent the past four years rising in linear fashion.
IEC Electronics: A Misunderstood Company At A Fraction Of Private Market Value [View article]
Debt: IEC has $30.5 million of net debt. Trailing EBITDA is $16 million, so net debt/LTM EBITDA is under 2x. The company does not currently pay cash taxes, so an additional $4 million or so of cash is available for debt reduction each year until the NOL is exhausted.
Shareholder value: Barry Gilbert was appointed interim CEO on June 6, 2002. The closing price of the stock that day was $0.23. Yesterday's close was $6.42. That means that during Mr. Gilbert's ten-year tenure, the value of IEC stock has increased 27 times, or 38% annually.
GTLT: See What Insiders See - A Growing Company For 5x Cash Earnings [View article]
GTT is unlikely ever to own traditional carrier assets such as towers, fibre, etc. I believe Mr. Bauer's "more asset-based" comment referred to GTT's IP network.
GTT's acquisition of nLayer was the first, and likely the biggest, step in this transition. Before GTT bought nLayer, nLayer invested significantly to install first-class Junpier routing equipment at its important peering locations. After GTT bought nLayer, GTT quickly started outfitting its important legacy GTT locations with matching Juniper equipment. This is why capital expenditures were abnormally high in the most recent quarter.
These investments created a routing infrastructure that enables GTT to offer a very strong IP transit service. IP transit is a key offering for customers who provide "cloud" applications like SAAS, as well as other high-growth but bandwidth-intensive products such as streaming video. You can read more about the GTT IP transit offering here: http://bit.ly/WyCHbX
In short, I think a lot of the investments involved in this "more asset-based" transition have already been made.
GTLT: See What Insiders See - A Growing Company For 5x Cash Earnings [View article]
GTLT: See What Insiders See - A Growing Company For 5x Cash Earnings [View article]
Autoinfo: A Growing Truck Freight Broker Not Priced Like One [View article]
Autoinfo: A Growing Truck Freight Broker Not Priced Like One [View article]
GTLT: See What Insiders See - A Growing Company For 5x Cash Earnings [View article]
GTLT is a middle man between 800+ telco suppliers and 1,000+ customers. It enables efficient aggregation of bandwidth and other telco services. Without a party like GTLT serving as a middle man, this network of buyers and sellers would be exponentially more complex and inefficient (imagine 1,000 customers each contracting individually with 800 suppliers). In addition, GTLT is able to improve the quality and capabilities of the telecommunications network it provides by using select physical assets of its own in order to supplement and improve the services it buys and re-sells.
The carriers still get paid by GTLT. In essence GTLT is finding business for the carriers that the carriers might not other find, and then taking a cut of that business.
Autoinfo: A Growing Truck Freight Broker Not Priced Like One [View article]
You can find the list of the largest truck freight brokers here:
http://bit.ly/WQBn4m
Of the top ten truck freight brokers, CHRW, LSTR, and ECHO are public but bigger than XPO. Hub Group and Pacer are intermodal 3PLs--not the business XPO is aiming for. Transplace and Yusen are diversified 3PLs that provide numerous services in addition to truck freight brokerage. Freightquote uses an online business model. Total Quality is a pure-play truck freight broker, but it is on the border line of being too large for XPO to acquire.
The story is similar when you look at the brokers ranked 10th to 20th by size. JB Hunt, Matson, and BNSF are captive subsidiaries of larger asset-based transportation companies. England, Jacobson, and MIQ are diversified 3PLs. TTS specializes in trade shows.
Out of the top 20 providers, Autoinfo, PLS, Coyote, and Allen Lund appear to be the only standalone pure-play truck freight brokers that XPO could acquire without taking on additional debt.
So yes, I think AUTO is a valid takeover target for XPO. AUTO represents one of the best available opportunities to reach scale quickly in domestic truck freight brokerage.
Autoinfo: A Growing Truck Freight Broker Not Priced Like One [View article]
http://bit.ly/UiRSUH
http://bit.ly/XypS6L
Autoinfo: A Growing Truck Freight Broker Not Priced Like One [View article]
Autoinfo bought Sunteck in 2000. The Autoinfo corporate name is a holdover from the period prior to 2000, when the company was in other businesses. Today Autoinfo is solely a truck broker.
GTLT: See What Insiders See - A Growing Company For 5x Cash Earnings [View article]
I do not use the LTM cash flow statement, as you are doing, because the trailing twelve month financials do not include a full year's contribution from the nLayer assets, and because they include one-time expenses related to the nLayer acquisition.
GTLT: See What Insiders See - A Growing Company For 5x Cash Earnings [View article]
1) GTT has 50 million in debt
2) GTT owns "very little" assets
3) GTT is "begging" for a buyer
Claim 1 response: Your claim that GTT has $50 million of debt is simply untrue. The company has $36.5 million of long-term debt and $7.3 million of short-term debt. $36.5 + $7.3 = $43.8. The company also holds $4.3 million of cash. That means debt net of cash is $39.5 million (43.8 - 4.3 = 39.5). I have pasted the liability side of the most recent balance sheet below.
Current liabilities:
Accounts payable $ 14,710
Accrued expenses 10,919
Short-term debt 7,262
Deferred revenue 6,710
Total current liabilities 39,601
Long-term debt 36,455
Deferred revenue 264
Other long-term liabilities 6,029
Total liabilities 82,349
Claim 2 response: GTT's most recent balance sheet showed $99.5 million of assets, or approximately $5.00 of assets per share--2x the current share price.
Claim 3 response: I do not see what reason GTT has to seek a buyer, much less beg for one. To the contrary, selling out now would leave a lot of value on the table and be a poor decision. The corporate strategy is working, the stock price is rising, the company is in fine financial shape, and the industry landscape is still full of attractive acquisition candidates. Moving to NASDAQ will be a significant catalyst for further share price appreciation. GTT management is well aware of each of these points and knows that the company's intrinsic value is substantially higher than the current share price--hence their ongoing stock purchases.
GTLT: See What Insiders See - A Growing Company For 5x Cash Earnings [View article]