DCU Dryclean USA
Short on time tonight so I will give only a few pieces of financial data. I expect to add more.
September 14, 2008 I posted a few thoughts on DCU when it traded around .75. I believed it was a bargain so I was making purchases around this price.
Here are a few reasons why;
Top line:
They have EV/Sales of only .27; this compares very favorably to P/S of .91 (2004),1.1 (2005),.90(2006),.60 (2007),.30 TTM
GP/EV = 1.05% or we can say the company’s enterprise value is selling for the LESS than annual gross profit. The Annual gross profit is 5.80 million and the EV is ~ 5.283 million = Market Cap 5.84 Mil – Cash 4.149 Mil + Total Liabilities of 3.592 Mil = 5.283 Mil enterprise value.
Subtract A/R of 1.759 million and it brings the cost of buying the company down to 3.24 million. Annual sales were 20.39 million for the prior 12 months.
CFFO was strong at 1.342 million for the last 12 months and FCF was 1.28. CFFO/EV = 25% and FCF/EV = 24%. EBITDA/EV = 16.09%, EBITDA = 885.91k
OI-Taxes/EV = 8%, OI/EV = 14%,
Float total value based on EV = 1.436 million
Profit Magin 2.92%, Operating Margin = 3.71%
Tax/OI = 45%
-9.40% = Qtrly Rev Growth
ROA = 4.98%
Earning Quality represented by CFFO/NI was positive with CFFO of 1.342 million over the last 12 months compared to reported NI of 596.13k
EV/MC = 5.84/5.283 = .902
