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Pastimes : Georgia Bard's Corner -- Ignore unavailable to you. Want to Upgrade?

To: Ga Bard who wrote (6199)	6/7/1999 9:11:00 AM
From: Michael T Currie	Read Replies (2) \| Respond to of 9440

GaBard, Thought you might be interested in this little company - a profitable, fully reporting BB stock. As you may be aware, I live in Houston, which also happens to be the corporate headquarters for Weiner's Stores (WEIN: OTCBB). Prior to going overseas in 1992, my family shopped at Weiner's on a fairly regular basis. The company went bankrupt in 1995, largely due to mistakes in evaluating buying trends. They emerged from bankruptcy in 1997 and have limped along in obscurity on the OTC:BB ever since. So, what makes this different from any other BB stock? First and foremost, they are fully reporting, although I can't find the reports on Edgar. I have a copy of their latest annual report (1/99), so I can confirm that the problem lies with Edgar. These are links to the news releases that summarize both the 1998 annual and the 1Q99 results: biz.yahoo.com biz.yahoo.com Several things really stand out: 1) In the latest quarter, they announced net income of $0.11 per share. Compare this result to the $11/16 (+/-) share price. 2) Comparable store sales increased almost 13% quarter to quarter 3) The have just opened 2 new stores in Mississippi, both of which are doing very well (confirmed by company via telephone) 4) 3 more stores will open during the summer 5) Market cap is about $12 million 6) Annualized revenues are about $250 million 7) Book value per share is almost $3 per share (!). Remember, though, that a large part of this is inventory, which is notoriously difficult to value accurately, but even at extreme discounts, book is far higher than the share price. 8) Debt/equity is 22% (see notes below) and is covered many times over by cash flow I have recently visited 2 stores here in Houston and can confirm that prices are very good, stores are clean and well located for their intended markets, and the staff are friendly if not overly helpful. I asked the following questions of a representative of a small value-oriented broker. This guy struck me as very low key and was cautiously very excited about the prospects of the stock. I have listed his answers below. All have been confirmed since by the company (allowing for variations in wording of course). Q: The PR from 5/19/99 looks like it's in 10Q format. Why can't I find this on Edgar? A: The 10Q has not been filed yet. They have 45 days (6/15/99) to file. The 10K is available from the company (Note: confirmed) Q: How muck tax loss carryforward is available? A: $31 million, per the 10K. (These folks aren't going to be paying taxes for a while) Q: How many shares are owned by insiders? A: 2% by Herb Douglas (CEO), 2% by other officers, and 10% by Saul Weiner (no longer associated with the company). I found one thing very significant here. Saul Weiner emerged from the bankruptcy proceedings with 5%. He has since purchased an additional 5% on the open market. Q: Are there any threats of dilution in the near future? A: 400K shares of options are outstanding, all exercisable at prices over $1. There are no convertibles or warrants out. Q: What is the reason for the increase in long term debt from $4 million in January to $12 million in April? A: $4 million is pretty much the 'base debt' for the company. The additional $8 million is due to seasonal inventory stocking and is part of a $40 million revolving credit loan. Q: Do you have any reason to believe that the quarter ended 4/99 was anomalous in its success, or is this part of a longer term turnaround? A: The new management has identified the single major problem that has affected the company in the past, namely the back to school period of September and October. They are expending major efforts in getting this right. (Remains to be seen, obviously, but at least they acknowledge the problem) Q: Ther are 132 stores, yet net asset value assigned under 'Property and Equipment' is only $19 million, or $146K per store. Are all or most of the buildings and land leased? A: Yes, all of them are leased. Q: Do you have any further public information regarding results since the last report? A: May sales were very strong, with same store sales increases of "high single digits" I have taken a fairly large position in WEIR, with the expectation of putting it away as a very long term hold. There are days when the stock does not trade at all. Basically, it's not on anyone's radar. I also intend to visit the stores on a semi-regular basis to keep in touch. WEIN looks to me like a completely undiscovered - OK, unknown - high potential, and, at these prices, low risk investment. Best regards, Mike