Monday, December 12, 2005
TROLB (sec), this is just Tootsie Roll Industries class B common stock. The class A stock is TR, which I've been loosely following for many years (a favorite among Berkshire followers).
Class B Common Stock is not traded on any exchange [well, it's on the pink sheets!], is restricted as to transfer or other disposition, but is convertible into Common Stock on a share-for-share basis. Upon such conversion, the resulting shares of Common Stock are freely transferable and publicly traded. Assuming all 17,510,379 shares of outstanding Class B Common Stock were converted into Common Stock, the aggregate market value of Common Stock held by non-affiliates on June 30, 2004 (based upon the closing price of the stock on the New York Stock Exchange on such date) would have been approximately $661,779,690.not interested
TRTI (sec), supervises landfill monitoring and closure procedures, manages methane gas recovery, generates methane based electricity. Losing money consistently.
TSSW (sec), BIOS upgrade and PC diagnostic software. Oldest and largest BIOS upgrade company. Exclusive authorized BIOS update company and support center for Phoenix's "Award" BIOS (very popular).
Gross margins are 85% (down from 88%). But SG&A is 90% (up from 88%). Looking at the 2001 and 2002, the results are even worse. And 1999 and 2000 were even worse still. So the business has been improving, but it's a crappy industry. And this is the industry leader!
TTLG (sec), aerospace and defense industrial business, mostly helicopter hoists. Most sales are to the US government. They've lost money in every year except 2004. They made money during the 1990s.
TTMC (sec), digital distribution of music, music-on-demand: digital juke-boxes. Revenues have steadily gone up each year by a healthy percent. Gross margins were 35% in 2000, 41% in 2003, 46% in 2004. Losses decreased each year nicely. They made a profit in 2004. They hit cash-flow-from-ops breakeven in 2002, and it has steadily gone up.
Assets are mostly AR (which decreased during 2004). and inventory (which increased). Balance sheet is not bad. Share count has exploded every year. Depreciation is somewhat large. Directors and execs own 35% of the business. Capital structure is a bit complicated, but SEEMS to have a net diluted share count of 93 million shares. Net income for 2004 was 2 cents per diluted share.
2005: took a bigger loss than 2004 in Q1 due to higher jukebox sales costs and other sales costs. It got worse in Q2 and it stayed that bad in Q3.
The [61%] increase in cost of jukebox sales revenues is due to an increase in the number of Digital Jukeboxes and Tune Centrals sold in the period as compared to the third quarter 2004.which is total crap. The real answer is here:
For competitive purposes the Company has significantly reduced the retail selling price of its Digital Jukeboxes, including Tune Central, to an average of $4,995 as compared to the comparative 2004 retail selling price of $7,990 for a Rhapsody model and $7,685 for a Maestro model, including Tune Central. As a result of this, the Company has incurred negative margins of the sales of Digital Jukeboxes. The Company shipped 1,450 Digital Jukeboxes in the third quarter of 2005 as compared to 846 for the third quarter of 2004. The increase in revenues from the sale of Digital Jukeboxes is attributable to the increased unit sales offset by the impact of the aforementioned retail price reduction.This is why I look so closely at margins. Extremely high margins can be good (moat) or bad (temporary gouging), so can extremely low margins (Wal*Mart vs this company here). But without knowing the margins, you can't know what to look for as to whether they're good or bad.
The stock is selling for 42 cents, making a market cap of about $39 million. Amazingly, the stock has not dropped since 2005. They're going private.
TTVL (sec), Chinese reverse merger. High end hotel management in PRC. Also Chinese real estate. CEO owns 58% of the business. Losing money. The balance sheet had been dominated by a loan from affiliate for essentially more than the assets, making the current ratio less than 1/10. They had a gain from forgiveness of debt. Otherwise, this is a serious money loser.
TWOC, oil company
ROHI (sec), bankrupt in 2002. Large rental/sale provider of home medical equipment, also some related services. Mostly breathing equipment. 3.2 million options. 25 million shares. 74% gross margins (probably meaningless). 7.2% net margins.
Assets are mostly goodwill. Current ratio good. Not a bad balance sheet. Earned $37.8 million, which is about $1.34 per share fully diluted (they claim $1.48 diluted).
Q3 2005: Revenues up slightly over prior year. Costs are up a lot more. Earnings are way down for Q3 and almost zero for 9 months. Very high depreciation.
RUSS (sec), "post-secondary educational and training courses". Real estate investing, business strategies, cash management, etc. 75% repeat business. $1,600 to $32,000 per course. Training is done in the usual meeting and conference centers.
Our students are primarily recruited by attending a free informational training session related to a specific educational subject which is hosted by one of our trainers or others and held at a local hotel or other rented auditorium facility. The subject, date and location of the training session are generally advertised in local newspapers, on our Web site, www.russwhitney.com, in television advertisements and through direct mailings and telemarketing.Revenues have been growing substantially every year, yet they've been losing increasing amounts of money. Assets are mostly PP&E, deferred seminar expenses, cash. Liabilities are deferred revenue. Negative equity. Terrible balance sheet.
Q3 2005: cash has greatly increased. They've been making money in 2005. But this company just doesn't pass the smell test.
RYFL (sec), 17 family buffet restaurants in Florida. They always lose money, every year. The only time they make money is when the sell an asset.
RZPK (no sec, website), this is the pachinko strategy guide business I looked at before.
I think the reason the price hasnt dropped in 2005 is that the going-private transaction offers $0.50 per share (for less than 2000 shares). The stock price will probably drop once the transaction is over.
Checking more closely now, the ask is 47 cents, which seems close enough to 50 cents to be about right. You could theoretically make about $50 net buying 1999 shares (with a $10 transaction fee). Your roughly $1,000 would be tied up for perhaps a few months. I'd say the risk of the deal falling through would be close to zero.