Jack_Bolander
9年前
ROTTEN TO THE CORE
Westport's Proposed Takeover Of Fuel Systems Solutions: 'Rotten To The Core'
Jan. 11, 2016 7:55 AM ET| About: Fuel Systems Solutions, Inc. (FSYS), Includes: WPRT
Disclosure: I am/we are long FSYS. (More...)
Summary
WPRT is capturing $63 million net cash from FSYS, with no money down.
WPRT will swap 38.5 million of their shares, to seal the deal.
FSYS' market cap, now equates to its cash holdings.
FSYS was buying back their own shares at $11, but will settle for just $3.50.
This proposed transaction is outrageous and a white knight could emerge.
Talk about sheer insanity. That's a gargantuan understatement when it comes to the caper Westport Innovations (NASDAQ:WPRT) is about to pull off. It is even more inconceivable when considering these guys have been burning through cash, have net debt of $24 million, and shareholder's equity of just $1.33, yet will be nabbing Fuel Systems Solutions (NASDAQ:FSYS), easier than taking candy from a baby.
The guys at FSYS are no babies either. They have been in business several decades, possess a pristine balance sheet, and tally annual sales of over $300 million. In fact, I have been promoting them for many years, because of their superior value metrics. FSYS has $63 million of cash, is EBITDA positive, and features a book value of $9.22.
They even have a stock buyback plan in effect, and have already bought back over 10% of their shares outstanding. The company's market value of $3.56, is just a few pennies more, than its cash value per share of $3.48. Can you believe that? It is a extremely rare occurrence when a enterprise has more cash, than its market value.
They were buying back their shares in 2015 in the open market, under their $25 million stock repurchase plan, at an average price of $11. Why on earth would they be content on selling those same shares today at $3.50? This adds up to nothing short, of lunacy.
Now, WPRT intends to print up 38.5 million shares and swap 2.129 Westport shares for every single FSYS share, to consummate the marriage. In the process, they will immediately capture $63 million of FSYS' cash hoard. They are essentially being paid to take over the company, suffering only "share dilution" as a consequence. A wonderful deal for WPRT shareholders, and the clear perception of a more than "woeful" transaction, for FSYS shareholders.
If anyone would have told me, that FSYS was going to be acquired, and just three months after the announcement their shares would be trading 50% lower, I would have thought they were absolutely out of touch with reality. Normally when a buyout occurs, the acquired company's shares go up, not down. Just last Thursday, the shares lost 25% of their value, on absolutely no news.
It appears I'm the one that is out of touch because due to this coming debacle my portfolio value has been sliced in half. To make matters worse, I am being forced out of my position due to margin calls. You see, when a stock falls below $4, the lending broker basically does not allow borrowing power on it.
There is no one to blame but myself. I simply had too much skin in the game because of the attraction and lust I possessed for this name. Its extreme bargain metrics looked just too good to be true, and guess what? Evidently they were not. I simply drank the Kool Aid and became too emotional and stubborn about this stock.
I am unclear why this proposed deal has not been revised, cancelled or subject to a new bidder (the cancellation penalty is a mere $5.5 million), especially considering the vote (by each board) to approve it, occurred when the shares of both companies were twice the price. In my opinion, that is a game changer. What was good three months ago, is definitely not good today, and please don't blame it all on the fall in oil prices.
This transaction seems dubious at best, and I am completely dumbfounded that WPRT hasn't even raised its payment ratio to at least a 2.50 exchange rate considering the tragic decimation of both these stocks. I am also puzzled why a white knight hasn't evolved with a sweeter offer such as T Boone Pickens' Clean Energy Fuels (NASDAQ:CLNE), the final public company of three, in the alternative fuel sector. Perhaps all three of these companies should combine forces?
I spoke with WPRT's investor relations manager and he relayed the voting materials will be out in mid Feb. and the deal will close just three days later. He said he is more than confident that FSYS shareholders will approve it. I am flabbergasted why shareholders would vote for something so outrageously unfair - most notably, activist hedge fund Becker Drapkin (FSYS' largest shareholder). Any way you slice it, this apple is rotten to the core.
Jack_Bolander
9年前
ANOTHER NAIL IN THE COFFIN?
VANCOUVER, Oct. 21, 2015 /PRNewswire/ - Westport Innovations Inc. (TSX:WPT / Nasdaq:WPRT) ("Westport"), engineering the world's most advanced natural gas engines and vehicles, announced today that the proposed merger with Fuel Systems Solutions, Inc. ("Fuel Systems") has satisfied the requirements of the Hart-Scott-Rodino Antitrust Improvements Act of 1976. There is no further antitrust clearance required to close the transaction.
As announced on September 1, 2015, Westport and Fuel Systems have entered into an Agreement and Plan of Merger (the "Merger Agreement") to combine their businesses through merger. Pursuant to the Merger Agreement, Whitehorse Merger Sub Inc., a newly formed, wholly owned subsidiary of Westport, will merge with and into Fuel Systems, with Fuel Systems surviving the merger as a wholly owned subsidiary of Westport. As consideration for the merger, stockholders of Fuel Systems will receive a fixed ratio of common shares of Westport.
The Westport common shares to be issued pursuant to the Merger Agreement will be issued pursuant to a registration statement on Form F-4, which has been filed with the SEC. In the Form F-4, Westport is providing, among others, certain forward-looking financial information and financial outlook information which is subject to the risks, qualifications, assumptions and other cautionary language set out in such Form F-4. Readers are encouraged to review such cautionary language carefully.
Democritus_of_Abdera
10年前
Re: $25M FSYS Share Buyback...
The announcement today of a $25M share repurchase program is probably responsible for the bulk of the share price increase seen this morning (currently about 7%).
It could be that the share buyback has been put in place to enhance shareholder returns as stated in the FSYS CC: This quarter, we also announced a $25 million share repurchase program, which underscores our focus on delivering returns for shareholders and demonstrates our confidence in Fuel Systems’ financial strength and future business prospects. While we are carefully considering the cost reduction, development and pipeline opportunities available to the company, our announcement of the share repurchase program illustrates our commitment to return capital to shareholders within the overall context of a prudent capital allocation strategy.However, I am of the opinion that the share buyback may have been established to provide an exit strategy whereby FSYS will buy Becker-Drapkin's shares when Becker-Drapkin decides to cash in their holdings. Currently, Becker-Drapkin holds 1.89M FSYS shares (9.4% of outstanding) and have one seat on the board.
Having FSYS buyback their shares would provide liquidy for such a Becker-Drapkin exit without causing downward price volatility as the transaction is executed. This practice is in the activist investor playbook. It is particularly valuable when exiting a company with a small float (such as FSYS) particularly when the activist has a board seat that imposes restrictions on share purchases and sales.
I have suggested that Drapkin's father has done the same thing to facilitate his eventual exit from CLF (see #msg-105665805).
Regarding activist playbook:
http://blogs.law.harvard.edu/corpgov/2014/07/07/hushmail-are-activist-hedge-funds-breaking-bad/#more-64293 ....After a period of time pressing its case, the activist may desire to exit the investment. However, if it were to dump its shares in the market in large volume, the stock price realized in the sale may suffer. The situation becomes trickier for activists that have obtained board representation, because insider trading policies and SEC rules may significantly restrict their ability to dispose of shares quickly.
In order to exit quickly at the highest possible price, the activist sometimes seeks to have the target company buy back its stock. The buyback price is typically at a slight discount to the current market price, but occasionally it is at a premium. As part of the purchase agreement, the activist may enter into a standstill and non-disparagement agreement with the target. If the activist has representatives on the board of the target, the representatives typically would resign their director positions after the repurchase, given the activist’s lack of ongoing economic interest....see also:
http://online.wsj.com/articles/activist-funds-dust-off-greenmail-playbook-1402527339
http://www.reuters.com/article/2013/12/12/us-sharebuyback-activists-idUSBRE9BB0YJ20131212
http://www.activistinsight.com/press/Activist%20Insight%20Press%20Release%20-%20Share%20repurchases%20a%20new%20favourite%20tactic.pdf.
Becker-Drapkin Membership on FSYS board:
http://www.sec.gov/Archives/edgar/data/1340786/000121465914007256/s10291408k.htm
Current Becker-Drapkin FSYS holdings:
http://www.sec.gov/Archives/edgar/data/1340786/000119312514387916/d811116dsc13da.htm
FSYS CC transcript
http://phx.corporate-ir.net/phoenix.zhtml?p=irol-eventDetails&c=109507&eventID=5172451
Democritus_of_Abdera
10年前
Re: Expectations for Upcoming FSYS Q3 Earnings Report...
Westport (WPRT), a FSYS peer, has had a terrible quarter. Many of WPRT's problems are company specific... but not all; some are probably shared by FSYS as well.
Based upon the WPRT CC of Oct 30, 2014, I expect FSYS' US and European automotive business to have slowed down significantly this past quarter, but revenue from India and, perhaps China, should have increased.
Relevant WPRT CC quotes include:David Demers, CEO WPRT in prepared remarks:
Although the differential between natural gas and oil prices remains intact in most markets. Since gas prices are down, the overall incentive to migrate to a new fuel is weakened in markets where there are no incentives.
European alternative fuel products have been hit hard by reductions in government incentives, by the decline in oil prices, which as I said, reduces incentives to look for change, but also generally softened economic conditions across Europe, which have reduced shipments of new cars.
China and India remained strong and growing markets. And in North America, we think clean air fleets are moving forward and doing well.
Ashoka Achuthan, CFO WPRT in prepared remarks:
Lower sales of WiNG Power System products have impacted our revenue for the third quarter of 2014. (Where WPRT's WiNG power system is used in Ford F250/F350 CNG bi-fuel systems)
China is developing well, and India shows strong promise now that diesel subsidies there are shrinking. We have seen significant impact on our business with OEMs in Russia due to the decline of the ruble and the complexity of compliance with sanctions.
...our Volvo Car business grew year-over-year and achieved positive operating income for the first time since its acquisition.
In the U.S. Ford sales are visibly affected by the decline in gasoline prices to the lowest level in four years. Although it is true that there is still a big gap between gasoline and CNG prices, the incentive to aggressively shift to CNG is simply not as strong.
Nancy Gogarty, President & COO WPRT in prepared remarks:
The Ford business, the business where Westport is the largest QVM, has faced some challenges due to lower gas prices. However, fleet management companies still have a very strong focus on our product.
Our Ford Canada activities have also started showing some traction with the oil and gas fleet. As mentioned earlier, while starting from a small base, our Volvo Car revenue has increased over last year and is helping to offset some of the reductions we’ve had in our Ford business primarily due to the launch of the Volvo V60 bi-fuel vehicle plus our continuing offering of the V70 bi-fuel.
In Q&A:
Ann Duignan of JPMorgan Securities:
... Can you talk about the outlook into 2015 and beyond, if oil prices stay where they’re at or even trend lower which we believe they could do?
Darren Seed VP Investor Relations WPRT:
... what is more important in our space is the differential between gas and oil, which seem to be pretty intact in most of our markets, hasn’t changed a lot because gas has been drifting down too as you know. What does change is the, call it the psychological urgency around moving. So I think that we are definitely seeing immediate impact on fleets like Ford pick-up trucks, with gasoline approaching $3, it’s not as urgent a priority, so sales are off but they’re not going to zero either.... it might be the pace of attracting new adaptors that’s going to slowdown..... Very different dynamic in places like China and India where the opposite is happening. China has got some very strict directives, so we see that accelerating pretty much as planned. India is removing the diesel subsidies. Actually, I think, they’re quite relieved that they are seeing some opportunity for cover on this one. So there is markets where we are seeing the focus on natural gas be enhanced as well.
Democritus_of_Abdera
10年前
Re: Q2 Impairment....
The $44.3M impairment recorded this quarter removed most of the goodwill and half of the intangible assets from FSYS' balance sheet... i.e. Goodwill was reduced to $7.5M from $48.9M and Intangible Assets were reduced to $8.6M from $11.8M.
A Goodwill impairment of $36M was attributed to FSS Automotive in Italy; $4M was attributed to FSS Industrial in Canada & the Netherlands. Intangibles were reduced relatively evenly across the technology, customer relationships, & Trade name categories.
One short term advantage of the long-lived asset impairment is that it produced a tax benefit of $1.1M.... Of course, this savings will be reversed if the impaired property is divested.
I suspect that the timing of the impairment is correlated to the closure of the Livorno automotive conversion facilities due to the trend towards lower DOEM volumes; albeit, I believe the impairment greatly exceeded that specific to Livorno.
The reason for the impairment stated in this quarter's 10Q is:During the second quarter of 2014, we determined that sufficient indicators of potential impairment existed to require an interim goodwill impairment analysis. These indicators included the recent trading values of our stock, and corresponding decline in our market capitalization, coupled with market conditions and business trends within our various reporting units. As a result, we examined the Italian reporting units of our FSS Automotive segment, as well as the Canadian and Netherlands reporting units of our FSS Industrial segment.... The income approach requires several assumptions including future sales growth, EBIT (earnings before interest and taxes) margins, and capital expenditures. These assumptions are the basis for the information used in the discounted cash flow model. The discounted cash flow model also requires the use of a discount rate and a terminal revenue growth rate (the revenue growth rate for the period beyond the five years forecasted by the reporting units), as well as projections of future gross and operating margins (for the period beyond the forecasted five years). During the second quarter of 2014, in relation with the above-mentioned reporting units, management used discount rates ranging from 13.75% to 19.25% and a terminal growth rates of 3% (the differences in discount rates reflect considerations about differences in the underlying businesses, as well as local economic conditions/environments). The discount rates used for the above-mentioned reporting units increased significantly from the fourth quarter of 2013 analysis due to the decrease in our market capitalization.I had thought that the impairment might have been triggered by the Argentine debt crises (#msg-104835850). But, I was wrong. Argentine revenues remain strong primarily due to aftermarket sales. Never the less, FSYS warns that the strength in Argentina may yet be impacted by the debt problems; i.e. The debt default by the Government of Argentina could have a material adverse effect on our business, financial condition and liquidity. We operate a subsidiary in Argentina which has significant sales to customers in Argentina and elsewhere in South America. We also sell inventory from our facility in Italy to our subsidiary in Argentina. The default by the Government of Argentina on its debt obligations has negatively impacted economic conditions in Argentina. In addition, the debt crisis in Argentina subjects us to risks related to fluctuations in currency values, restrictions on imports and exports, trade limitations, restrictions on the ability to repatriate funds and other potentially detrimental governmental practices or policies impacting companies doing business in Argentina. The continued uncertainty caused by the debt crisis may materially disrupt our markets in Argentina and possibly elsewhere in South America. If economic conditions in Argentina remain uncertain or deteriorate further, customer demand for our products could decline, and we may experience a material adverse effect on our business, financial condition and liquidity.====
2014 Q2 10-Q: http://www.sec.gov/Archives/edgar/data/1340786/000156459014003843/fsys-10q_20140630.htm
Democritus_of_Abdera
10年前
Termination of the Deferred Compensation Plan...
I was surprised to read in this quarter's 10Q that the deferred compensation plan was terminated. I wondered if this was a tea-leaf that foreshadowed some future change in control event that might be precipitated by the recent Becker/Drapkin investment. But, after reading the company's history regarding the plan, termination made sense.
In 1996, the Deferred Compensation Plan was designed to provide a select group of management or highly compensated employees and Directors with the opportunity to defer up to 100% of their base compensation and bonuses earned. The Company made certain matching contributions, a portion of which was to be in the form of options to purchase the Company's common stock granted from the 1996 Incentive Stock Option Plan and a portion in shares of the Company's common stock, subject to vesting provisions.
After the heady days of the dot.com era, the matching funds from the company were limited to an annual maximum of $12,500 and the cash contributed by the company was invested in Company common stock. The company's contribution became vested in a step-wise schedule, not becoming fully vested until after 5 years employment had past.
The deferred compensation plan was rewritten in 2009 (as detailed in the 10K submitted in March 2009). Importantly, the company no longer matched employee contributions after March, 2009. Vesting of past contributions still applied and some contributions would not be completely vested until the end of 2013.
Not surprisingly, when the company matching funds were stopped, directors and employees no longer elected to defer their salaries and fees. Consequently, now that all of the past contributions have vested, it became time to terminate the program for lack of interest.
Democritus_of_Abdera
10年前
Re: Delayed 10Q (continued)....
Today's 13D revealing that Becker/Drapkin has recently acquired 6.45% of FSYS stock might explain the sudden desire of FSYS to adjust the Goodwill and Intangible assets on its books; i.e. the initiative might have resulted from discussions with Becker Drapkin, albeit, I don't know why Goodwill/Intangible assets would be targeted when there are no substantial FSYS debt covenants in jeopardy.
A sense of Becker/Drapkin's investment style can be gleaned from these two wall street journal articles: From the Wall Street Journal (July 15, 2012)
http://blogs.wsj.com/deals/2012/07/16/small-activists-can-have-a-big-bite-too/
On one Wednesday last month, Becker Drapkin revealed in a filing it had taken a 5% stake in women’s retailer Tuesday Morning Corp. By the end of that day, Tuesday Morning had said it “relieved” its chief executive “of her duties” and cut its earnings guidance. The company said it made its decision on Tuesday, before Becker Drapkin revealed its stake publicly.... In between, Ruby Tuesday Inc., the burger and casual dining chain, also announced its long-time chairman and CEO would step down. Becker Drapkin had taken two board seats on Ruby Tuesday and had been pushing for change there as well.
...
The fund has been an activist in 11 companies and has joined the board, or had its nominees placed on the board, of every one. There has never been a proxy, or shareholder vote, over its nominees.... Co-founder Matthew Drapkin said the firm has made targets of undervalued companies, but doesn’t want to come in with activists guns blazing. He said CEOs often react skeptically at first, but that he tells them to call other CEOs the firm has worked with for references. The Becker Drapkin pitch is that they will be “the hardest working, most engaged board members” and they won’t sell their stake, he said. From the Wall Street Journal (May 12, 2014)
http://online.wsj.com/news/articles/SB10001424052702303851804579558212019896936
Becker Drapkin Management LP, an activist that targets smaller companies, has taken a 7.2% stake in XO Group Inc., XOXO -0.42% according to a regulatory filing Monday.
The investment fund supports XO Group's recently named chief executive but is raising questions about the continued operational role of co-founder and Chairman David Liu and losses piling up under Mr. Liu's watch in China, people familiar with the matter said.
....
Matthew Drapkin, partner and co-founder of Becker Drapkin, is a former investment banker at Goldman Sachs Group Inc. and one-time general manager of Condé Nast's online publications Epicurious.com and Concierge.com. He is also the son of well-known Wall Street money manager Donald Drapkin, who himself is currently waging an activist campaign against iron-ore miner Cliffs Natural Resources Inc.The 13D filing: http://www.sec.gov/Archives/edgar/data/1340786/000119312514311934/d776599dsc13d.htm
Democritus_of_Abdera
10年前
Re Delayed Q2 Report (continued)...
In the FSYS filing today it was noted that the delayed 10-Q will be filed on or before the fifth calendar day following the prescribed due date (see: http://www.sec.gov/Archives/edgar/data/1340786/000121465914005775/s811140nt10q.htm )
I believe that the due date for the 10Q is August 18 (45 days after Jun 30) implying that the 10Q will be filed or or before Aug 22. see: http://www.corpgov.deloitte.com/binary/com.epicentric.contentmanagement.servlet.ContentDeliveryServlet/CanEng/Documents/Resources/Financial%20Reporting%20Tools/ChecklistForQuarterlyReport_SEC_Form10-Q.pdf ;i.e. The Form 10-Q must be filed within the following period for each of the first three fiscal quarters of each fiscal year. No quarterly report is required for the fourth quarter.
• 40 days after the end of the fiscal quarter covered by the report for large accelerated and accelerated filers (as defined in Exchange Act Rule12b-2).
• 45 days after the end of the fiscal quarter covered by the report for all other registrants.As stated before, Fuel Systems Solutions, Inc. (the “Company”) expects to incur a non-cash goodwill impairment charge and a long-lived asset impairment charge for the second quarter of 2014.At the end of 2013, FSYS had an outstanding Goodwill of $49M and net intangible asset of $12M.
Looking just at the Goodwill history, I calculate that about
$26M is due to the BRC acquisition in 2003-2005;
$2.5M is due to the Zavoli acquistion in 2006;
$9M is due to the Argentine acquisition in 2009;
$3M is due to the Teleflex acquisition in 2009
several other goodwill items are less than $1M each and not important in my opinion.
There is about $5M Goodwill I cannot account for.
I'm assuming that the $10M goodwill write-off in 2012 was totally attributed to the US automotive operations which, if true, means that it was all written off. However, I am not certain of this assumption and there might remain some goodwill for PCI outstanding.
Reviewing the above, I don't see any goodwill items in jeopardy... but,
if I let my imagination run wild, I would guess that there might be a goodwill impairment for the Argentine operations (see #msg-104835850),
or if I assume a paranoid position, there might be an impairment that was uncovered at MTM (a subsidiary of BRC) after Pier Antonio Costamagna left on Feb 5 (see http://www.sec.gov/Archives/edgar/data/1340786/000118143114005436/rrd401588.htm )
Democritus_of_Abdera
10年前
Re Delayed Q2 Reporting...
It was reported this morning that FSYS "expects to delay the announcement of its financial results for the second quarter of 2014 beyond its typical announcement date and that it also may file a notification of late filing (Form 12b-25) to extend the time to file its Quarterly Report on Form 10-Q for that period. The delay is expected to be necessary for management to complete its analysis of whether the Company may be required to record a goodwill and long-lived asset impairment charge for the second quarter of 2014 and, if required, to determine the amount of any such non-cash charge." (http://finance.yahoo.com/news/fuel-systems-solutions-inc-expects-103000943.html)
I'm wondering if this delay is related to today's events concerning Argentina's bond default...which could lead to a serious currency devaluation.
FSYS assembles products in Beccar, Argentina, as well as at other sites outside of Argentina. After a long legal battle with hedge funds that rejected Argentina's debt restructuring following its 2002 default, Latin America's third-biggest economy failed to strike a deal in time to meet a midnight deadline for a coupon payment on exchange bonds.... As dire as it is, the situation is a far cry from the mayhem following the country's economic crash in 2001-2001 when the economy collapsed around a bankrupt government. Millions of Argentines lost their jobs. This time the government is solvent. How much pain the default inflicts on Argentina, which is already in recession, will depend on how swiftly the government can extricate itself from its obligations.... U.S. ratings agency Standard & Poor's on Wednesday downgraded the country's long- and short-term foreign currency credit rating to "selective default". The default rating will remain until Argentina makes its overdue June 30 coupon payment on its discount bonds maturing in 2033, the agency said.
http://www.reuters.com/article/2014/07/31/us-argentina-debt-idUSKBN0G00DX20140731Per the 2014Q10 FSYS had about $48M goodwill on its books ($41M for the Automotive division and $8M for the Industrial division).
They warned in their discussion of Quantitative and Qualitative disclosures about market risk that they are " exposed to significant volatility from countries that could devalue their currencies, such as Argentina. In countries outside of the United States, we generally generate revenues and incur operating expenses denominated in local currencies. These revenue and expenses are translated using the average rates during the period in which they are recognized and are impacted by changes in currency exchange rates. We monitor this risk and attempt to minimize the exposure to our net results through the management of cash disbursements in local currencies."
Note that per the 8K filled 3/14/2014, operating loss for the fourth quarter of 2013 totaled $3.2 million, or 3.4% of revenue, compared to operating loss of $20.8 million, or 21.2% of revenue in the fourth quarter of 2012, which included a non-cash goodwill and asset impairment charge of $22.0 million.
Democritus_of_Abdera
10年前
Venezuela was an important market for FSYS in the recent past. But not this year.
In the 2014Q1 CC Pietro Bersani (FSYS CFO) said that there were no BRC units sold in Venezuela.
I suspect that the 2014Q2 results will also reflect an absence of input from Venezuela.... This suspicion is based upon a report last week in the Wall Street Journal that detailed the miserable state of affairs for the Venezuelan auto industry....
======
The 2014Q1 statement by Pietro Bersani in Q&A on May 8, 2014:Matthew Blair – Macquarie Capital (USA), Inc
Great. Thank you. And then just want to follow-up on Venezuela. From the prepared remarks, it sounds like you’re still down there. I know Ford was down for a couple of weeks, but I thought they’d start back up. How much longer do you think you will be down? How much of an impact is this going to be in the second quarter? And is it fair to say that Venezuela is your most important Latin American market? Thanks.
Pietro Bersani – Fuel Systems Solutions, Inc.
Well, I will say the most important market in Latin America is Argentina more than Venezuela. You are right about the fact that right now, which is down in terms of sales OEM. As a matter of fact, we had no units sold in Q1 2014. It’s difficult every time it comes to a tradition, which is impacted by local political situation. However, I will not exclude that over the next few months that the situation could be positively evolved so that we can start again with those sales. This is overall what I can tell you, but really, Matthew, it is a matter of how difficult it can be a tradition, which is primarily political driven.Quotes from Wall Street Journal (Ezequiel Minaya July 21, 2014) http://online.wsj.com/articles/in-venezuela-old-cars-become-investment-vehicles-1405972426Car makers, including global giants like Ford Motor Co..., Fiat Chrysler Automobiles...., General Motors Co. .... and Toyota Motor Corp. ..., have cut output by more than 80% in the first six months of the year compared with a year earlier because of a lack of dollars to pay parts suppliers, according to data compiled by the Automotive Chamber of Venezuela, which represents car makers.
...
Across Venezuela, car production and sales has been sliding fast. Balance sheets have been battered, with revenue vulnerable to devaluation and trapped in Venezuela because of currency controls. Auto makers built 36,919 vehicles through June of last year. But only produced 6,161 during in the same period this year, about what Argentina produces in a few days.
....
Mr. Maduro, though, blames the car companies, not the country's economic policies for hobbling the auto sector. The government fined GM last year after accusing it selling overpriced car parts. In February, the president publicly criticized Toyota for its plans to cease production, suggesting the Japanese car maker was colluding with his political foes to destabilize his government.
...
One auto executive, who works for a non-U.S. company and spoke on the condition of anonymity, said the Maduro administration had failed to deliver dollars promised last year through the central bank's SICAD system, which sells a limited amount of greenbacks at a weakened exchange rate. That executive estimated the government has delayed up to $4 billion in payments the car companies need to convert local currency into dollars to pay international suppliers for parts. "Some companies have shut down their lines because of the lack of materials, others are working at a reduced rate," said the auto executive. "Eventually, raw materials will finish for us all and there will be zero new cars."
....
Buyers seeking new cars can spend years on waiting lists. New car sales totaled 98,878 in 2013, a fall of 80 % since 2007, when car sales peaked at 491,899. Restrictions on car imports, coupled with the fall in car production, have made Venezuela the rare country where used vehicles climb in value.
Democritus_of_Abdera
10年前
Re: US flaring restrictions as FSYS opportunity...
Pressure by lease holders to force oil companies to capture gas at the well-head rather than burn it off as a flare may produce a significant market for CNG pickup trucks and and on-site compressors in the US, some of which might be provided by FSYS's Impco division.
(See the attached article by Kirk Eggleston regarding the new North Dakota rules requiring capture of gas within one year after drilling a well; http://bakkenshale.com/news/ndic-implements-new-bakken-flaring-rule-june-1-2014/ )NDIC Implements New Bakken Flaring Rule – June 1, 2014
NDIC Hopes to Capture 90% of Bakken Natural Gas Produced by 2020
Jun 6, 2014 By Kirk Eggleston
Beginning on June 1st, the North Dakota Industrial Commission (NDIC) began implementing its first in a series of policy changes aimed at reducing flaring in the Bakken.
The NDIC’s new “gas capture plan” (GCP) rule will require E&P companies to submit a document with their application for a permit to the commission specifying how they plan to capture gas produced from their drilling operations.
In May of 2014, the North Dakota Pipeline Authority (NDPA) released production data for March of 2014, indicating 33 % of natural gas was flared in the state. With the new policies implemented, the NDIC hopes to capture 85% of natural gas produced in the state in the next two years, and at least 90% by 2020.
Since the boom began, flaring has conceivably prevented the state from collecting untold amounts of money in revenue from production. North Dakotan mineral owners, whom have also felt slighted, began filing class action lawsuits against oil companies in late 2013 for royalty payments lost due to flaring. Recently, in May of 2014, a federal judge dismissed 13 of 14 lawsuits filed against oil and gas operators. These among other reasons have been the impetus for NDIC’s policy changes relative to flaring.
Under the GCP, flaring is limited to one year after first production from the well. After that time frame elapses, the well must be connected to a gas gathering line or capped. The well can also be equipped with an electrical generator, or compression or liquefaction system that consumes at least 75% of the gas.
The new regulations are based on recommendations from the North Dakota Petroleum Council (NDPC). The NDPC is a trade association that represents more than 500 companies involved in all aspects of the oil and gas industry including oil and gas production, refining, pipeline, transportation, mineral leasing, consulting, legal work, and oilfield service activities in ND, SD and the Rocky Mountain Region.
starbuxsux
10年前
Fuel Systems Solutions Plans Launch of High-Tech Brake Pad Line
6:30 AM ET 6/10/14 | GlobeNewswire
MTM, a fully owned subsidiary of Fuel Systems Solutions, Inc. (Nasdaq:FSYS), has created a new unit named BRC Brake Division to launch a comprehensive range of high-tech automotive brake pads. BRC Brake Division is located in Cherasco, Italy, and consists of a world class R&D center and new manufacturing site supervised by MTM's seasoned development experts.
BRC Brake Division's brake pads will incorporate chemical technology designed for high-performance competitive racing that is cleaner and more environmental friendly than current models. Consistent with all Fuel Systems aftermarket products, the brake pads will offer OEM equivalent quality at competitive prices and will be sold under Fuel Systems' existing brands, namely BRC Brakes, Zavoli Brakes and IBT-Italian Brake Technology, leveraging the company's existing Automotive Division distribution network of thousands of dealers and workshops, as well as through wholesalers and other channels.
BRC Brake expects to launch by the fourth quarter of 2014 with manufacturing capacity of over 1 million sets annually for distribution in the European, South American and Asian markets. Due to the consistent demand for these products, the unit is expected to derive a solid recurring revenue stream and is projected to potentially ramp to the high seven digits in revenue within its first few years.
Mariano Costamagna, Fuel Systems Solutions' CEO, said, "Our decision to invest in a new brake division is driven by this product line's leveraging of our already strong branded presence and market share in the aftermarket, the relative ease with which we can capitalize on our distribution network, and the prospect to offer our sales partners a high-tech yet cost-effective spare part at an anticipated gross margin that benefits both them and ourselves. We expect to provide a range of products addressing the technical specifications of approximately 70% of the aftermarket in our target geographies. We will continue to develop additional long-term, adjacent market opportunities for Fuel Systems."
Forward-looking Statements
This press release contains certain forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. These statements are not historical facts, but instead involve known and unknown risks, uncertainties and other factors that may cause our or our company's actual results, levels of activity, performance or achievements to be materially different from the information expressed or implied by these forward looking statements. Statements in this press release that are not historical facts are hereby identified as "forward-looking statements" for the purpose of the safe harbor provided by Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended. Words such as: "may," "will," "would," "should," "could," "expect," "anticipate," "intend," "plan," "anticipate," "believe," "estimate," "predict," "potential," "continue," "seeks," "on-going" or the negative of these terms or other comparable terminology often identify forward-looking statements, although not all forward-looking statements contain these words. You should consider statements that contain these words carefully because they describe our expectations, plans, strategies and goals and beliefs concerning future business conditions, our results of operations, financial position and our business outlook, or state other "forward-looking" information based on currently available information. There are a number of important factors that could cause actual results to differ materially from the results anticipated by these forward-looking statements. These risks and uncertainties and certain other factors which may impact our continuing business financial condition or results of operations, or which may cause actual results to differ from such forward-looking statements, include, but are not limited to, the unpredictable nature of the developing alternative fuel U.S. automotive market, customer dissatisfaction with our products or services, the inability to deliver our products on schedule, a further slowing of economic activity, our ability to maintain customer program relationships, potential changes in tax policies and government incentives and their effect on the economic benefits of our products to consumers, the continued weakness in financial and credit markets, the growth of non-gaseous alternative fuel products and other new technologies, the price differential between alternative gaseous fuels and gasoline, and the repeal or implementation of government regulations relating to reducing vehicle emissions, economic uncertainties caused by political instability in certain of the markets we do business in, our ability to realign costs with current market conditions, as well as the risks and uncertainties included in our Annual Report on Form 10-K for the year ended December 31, 2013 and our other periodic reports filed with the SEC. These forward-looking statements are not guarantees of future performance. We cannot assure you that the forward-looking statements in this press release will prove to be accurate. Furthermore, if our forward-looking statements prove to be inaccurate, the inaccuracy may be material. In light of the significant uncertainties in these forward-looking statements, you should not place undue reliance on these forward looking statements. The forward-looking statements made in this press release relate to events and state our beliefs, intent and our view of future events only as of the date of this press release. We undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events.
About Fuel Systems Solutions
Fuel Systems Solutions (Nasdaq:FSYS) is a leading designer, manufacturer and supplier of proven, cost-effective alternative fuel components and systems for use in transportation and industrial applications. Fuel Systems' components and systems control the pressure and flow of gaseous alternative fuels, such as propane and natural gas, used in internal combustion engines. These components and systems feature the Company's advanced fuel system technologies, which improve efficiency, enhance power output and reduce emissions by electronically sensing and regulating the proper proportion of fuel and air required by the internal combustion engine. In addition to the components and systems, the Company provides engineering and systems integration services to address unique customer requirements for performance, durability and configuration. Additional information is available at www.fuelsystemssolutions.com.
Company Contact:
Pietro Bersani, Chief Financial Officer, Fuel Systems Solutions, Inc.
(646) 502-7170
Investor Relations Contacts:
LHA
Carolyn M. Capaccio
ccapaccio@lhai.com
Cathy Mattison
cmattison@lhai.com (415) 433-3777
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