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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Allen Furlan who wrote (12055)	2/16/2001 6:30:21 PM
From: rjm2	Read Replies (1) \| Respond to of 78482

I have traded CLHB for years now. There is some concern over the refinacing of their bonds and if they may have to give a dilutive warrant to get it done. Others have suggested a rights offering might be in the cards to get the equity up. My calls to the CFO have went unreturned. As for EBSC, I really dont know what to think. Insiders sure dont like it much. And the 13-d guys must be asleep.

To: Allen Furlan who wrote (12055)	2/17/2001 11:16:14 AM
From: TimbaBear	Read Replies (1) \| Respond to of 78482

Alan.... Regarding CLHB....I come up with a negative NetNet valuation of -$1.67/share. Are you at all familiar with the management of this company? Here's why I ask. Their current liabilities are running about twice current assets: Current Net Assets are about $45.83M and their current liabilities are about $92.46M. The Long Term debt is not that high at about $18.13M. They are CFO and FCF positive, so if they capitalized about $50M of the Current Liabilities, they might be able to work through this problem. The questions are:"Is management astute enough to do this?"(For, if they are, why are they in this position now?) and is there a process available to them?(credit facility, and/or stock offering). If I were a competitor of theirs, I'd seriously consider coming in and buying them for their market cap plus net debt. But without good management, they could just be forced into bankruptcy instead. Timba

To: Allen Furlan who wrote (12055)	2/17/2001 11:41:37 AM
From: TimbaBear	Respond to of 78482

Further thoughts on CLHB....I just went back and read "Management's Discussion" for the most recently filed 10Q. It seems that I was right about the amount needing to be capitalized($50M), because that is the amount of bonds that are coming due in May, 2001. Management says that they believe they can get approved another group of bonds or notes because their income position has improved. The notes coming due are at 12 1/2% and CLHB is net CFO and FCF positive with that level of debt service, so I would think they'd be OK with it again. If they can refinance(which isn't a certainty is a tightening credit environment), I might be tempted to get some CLHB myself. Timba

To: Allen Furlan who wrote (12055)	2/18/2001 11:06:05 PM
From: Mark Adams	Respond to of 78482

Canadian Pacific unlocking value I generally have had positive experiences with spinoffs, but I haven't done the study required on this particular one. After reading Timba's responses, I'd wait for news to the effect that financing had been secured to enter, then hold for the spinoff. I think.