Need accounting help!! Re: Nonni's divestiture press release ...
I may be over simplifying the situation, but it seems to me that the key factor in this biscotti transaction is the formula of assets/liabilities that is being traded for some $30+ million. I spoke with the CFO, Dorvin Lively, on Friday, 4/10/98. He said the 10K is to be released today, Monday. That will be the most current publicly available data on SLV's balance sheet. He said that nowhere is the data available on the balance sheet items' breakdown by division (i.e. Tulsa plant-biscotti vs. California plant-bagel bars), so until the numbers are released for a shareholder vote (Lively said this would be June) it's just a guessing game.
The CFO made one comment that I thought was interesting. I don't know if it was a slip or not, but he suggested that Nonni's was responsible for about 30-40% of Silverado's assets. I don't think that data is available publicly, but I could be wrong. Keep in mind that as part of the divestiture, Lazard will assume all of Nonni's liabilities (current payables are a substantial portion of SLV's total liabilities).
Other notable comment by CFO on Friday: He said the stock price activity of the last year has been baffling to all the powers that be at SLV. To me this means that the people who know more about the internal workings and intrinsic value of SLV than anyone, not only own almost half of the outstanding shares, but think they've got a great investment. That's promising.
Lawrence Field controls almost 5 million shares of SLV, almost all of them purchased or traded for at prices higher than the current share price. He says this deal is in the shareholders' best interest, so for now I'm guessing it's going to be a surprisingly good outcome. After all, this guy's been trying to find a profitable approach to the specialty foods business for a long time, and risking tens of millions of his own money to make it happen. He finally finds a product and brand with potential and a Pres/CEO who can finally fulfill his dream, and he works a deal to sell the whole package? If this deal makes SLV worth less than $1 1/2 - $2 a share, it'll blow my mind.
My request to any qualified readers: When the 10K comes out later today, crunch the numbers carefully, and using the 30-40% figure mentioned above, work up a best and worst case scenario for the outcome to this transaction. I paid someone to do my practice problems in 4 accounting classes, and still slipped by with D's, so I'm highly unqualified to do balance sheet analysis. Please help.
Thanks,
TC
P.S. I live in Tulsa and I'm a SLV shareholder, so some of my optimism may be selfish. |
