Red Corner outperforms me

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2163027497_8c463c3eff_oThe fellow over at the Red Corner blog has done it again. He has produced a follow-up blog posting (here) to his first Unitek Global Services posting (read about his first posting here,) dissecting the numbers for the first and second quarter of the 2013 fiscal year.

As the attentive reader of my blog has probably gathered, I have a more than passing interest in Unitek Global Services and its equity, UNTK (start here and work your way backwards if you want to catch up.)

In his posting, the Red Corner blogger focuses on the liquidation value (the dreaded bankruptcy scenario, again.)

You can read more about this in the Red Corner posting. Personally, I am not so interested in his conclusions around bankruptcy, since, in my experience, any Chapter proceeding results in the wiping out of the common shareholder, regardless of theoretical residual value or NAV, and, so, from my portfolio perspective, any scenario which involves bankruptcy proceedings of any sort is tantamount to a complete loss.

Unitek Summary TTMWhat I did find interesting, however, was a neat little table that summarized the progress made since the incubation a couple of years ago, as shown to the right.

Nice and succinct, eh?

Revenues, gross profit, and EBITDA dramatically up on both a year over year basis and on a trailing twelve months basis.

Certainly, looking at these numbers it is easy to forget that we are dealing with what the market perceives as a distressed situation and distressed company.

By the way, in the bankruptcy calculations, the Red Corner blogger includes the two assets that we should always keep in mind when looking at the case for investing in Unitek Global Services. First, there is the considerable Net Operating Loss of more than $85 million, and, second, there is the reclaw from Pinnacle of anywhere between $0 and $26 million.

We, of course, wrote about these in our Fabergé posting (here,) arguing that these two entries, together with the sanitizing of the balance sheet that was undoubtedly performed as part of the restatement (the corporate equivalent of throwing in the kitchen sink,) actually has the potential to add immense value to UNTK going forward.

In retrospect, I probably should have created and published a similar table in my posting of October 16th, 2013 (here,) where I discussed the results for the first and second quarter of the fiscal year.

Well, quoting ABC’s Lost, Whatever Happened, Happened, so onward and upward we go!

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