Ticonderoga #2 Pencil - Graham CLASSIC!!
Here is a classic Benjamin Graham "Net-Net" stock:
Dixon Ticonderoga, with operations dating back to 1795, is one of the oldest publicly held companies in the U.S. DXT is a diversified manufacturer and marketer of writing and art products.
Company best known for its Ticonderoga # 2 pencils."America's best pencil." “The smoothest writing quality pencil made. Yellow hexagonal shaped with premium pink eraser and smooth writing #2 graphite core.”
Problem attempting to overcome: Restructuring of long term debt which has been reclassified to current maturities of long-term debt. This has been going on for over a year with negotiations between senior lenders and subordinated noteholders. The Company had $ 32 million of unused lines of credit available under a revolving credit facility at 9/30/01. At March 31, 2002 the Company had $ 21 million of unused credit available under two credit lines.
DXT just announced they are close to restructuring all debt.
Shares Outstanding 3,177,462
Insiders own 41.8% of shares outstanding.
Market Price $ 1.50
Book Value Per share $ 7.94
% Market Price to Book Value 19% (19% !!!)
Market Cap $ 5.2 million
Shareholder’s Equity 3/31/02 $ 25.2 million
Current Assets 3/31/02 $ 68.1 million
Current Liabilities 3/31/02 $ 56.5 million
(includes $ 32.6 million
of current Long term debt)
Working Capital at 3/31/02 $ 11.6 million
Working Capital per Common Share $ 3.65
% Market Price to WC per share 41% (41 % !!!)
Long Term Debt $ 1.9 million
“Net Net” per Common Share $ 3.05
% Market Price To Net Net 49% (49% !!!!!!)
Cash Flow per Share Fiscal Year 2001 $ 1.13
Cash Flow per Share Fiscal Year 2000 $ .88
Cash Flow per Share Fiscal Year 1999 $ 1.26
(Above is before extraordinary items, impairment write-offs and discontinued operations)
Price to Cash Flow Fiscal Year 2001 1.46 Times
Average trading volume is 2,000-5,000 shares a day
Auditors: PriceWaterhouseCoopers
Qualified Opinion on Financial Statements based upon debt restructuring
“The Company has retained Wachovia Securities and certain other outside consultants to advise and assist it in evaluating certain strategic alternatives, including capital restructuring, mergers and acquisitions, and/or other measures designed to resolve the Company’s issues with its lenders while maximizing shareholder value.”
Management
Gino Pala Age 73 Chairman Owns 29.2 % of outstanding shares
Richard Joyce Age 46 (son-in-law of Gino Pala) Vice Chairman, President
(attorney by background) Owns 3.5% of outstanding shares
See Value Line for comparative quarter to quarter revenues and EPS.
Under an agreement with Warner Bros. Consumer Products, the Company markets in Canada and Mexico a line of pencils, pens and related products featuring the famous Looney Tunes and Scooby Doo characters.
Approximately 60% of Company’s revenues occur in the third and fourth fiscal quarter ending September 30 due to shipments of school orders to the Company’s distribution network.
Call 407-829-9000 for more Info.
Anyone have a better one than DXT?? Don't think so... |
