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fbk results out!


Alekbaylee
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I agree.  Nothing very exciting ... but that's of worthy in and of itself (i.e. no bad surprises).  The story remains what's happening incrementally below the waterline, where net profits don't make any headlines, but quality of balance sheet continues to improve quarter-over-quarter (i.e. asset mix transmogrifying from being more reliant on PPE to having more tangible cash mix ... and lower debt ratios).

 

Looking at balance sheet ... on top of their term loan, they now have $30M drawn from their revolving credit facilities, but with the debenture now paid off, they have no other material loans, so can now start bringing that facility back down.  Thinking wishfully ... their accounts receivables are up $14M over Dec 31st, so if they got their collections up and their EBITA remained similar this quarter, then in 90 days or so they could have that back down to (near) $0.

 

I would have liked to see an announcement about a modest share repurchase and/or dividend, but management has shown good prudence of late, so can wait before getting too vocal about it. (Of course I would like such triggers to help get share price up in a more sustained fashion, as am already more than fully invested so not taking advantage of what I think is an absurdly low price ... that said, MERC and others have dropped a lot from their highs, and with a lot more liquid share base.)

 

http://www.fibrek.com/en/investors/financial-information/

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The cash flow story is still great, even with declining margins. Does the receivables build worry anyone, or is it just noise like the inventory moves a couple of quarters ago? Last time, FFHWatcher quickly related the inventory volatility to seasonal maintenance.

 

Customer concentration in the NBSK and the RBK segments quarter to quarter and yoy.

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What "change in customer mix" means for the receivables build is likely that they are shifting towards more international customers. NA paper demand has been down 4.5% this year, whereas the rest of the world is growing; and typically days of sales outstanding increases as you sell to farther international customers.

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What "change in customer mix" means for the receivables build is likely that they are shifting towards more international customers. NA paper demand has been down 4.5% this year, whereas the rest of the world is growing; and typically days of sales outstanding increases as you sell to farther international customers.

 

Looking back to the 2Q10 and 2Q09 reports, when sales kicked up in the U.S. with the RBK segment, there was an increase in sales/(avg. receivables). America is driving the revenue growth this quarter as well, so an increase in days receivable reflects a change in practice. This could all be simply noise, but it's worth noting that customer concentration has increased as well.

 

In any case, cash flows are still very good relative to the price and the balance sheet looks good at current commodity pricing.

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The cash flow story is still great, even with declining margins. Does the receivables build worry anyone, or is it just noise like the inventory moves a couple of quarters ago? Last time, FFHWatcher quickly related the inventory volatility to seasonal maintenance.

 

Customer concentration in the NBSK and the RBK segments quarter to quarter and yoy.

 

Hey, I'm not smart enough to determine that on my own.  I called Patsie D. and spoke with her at FBK. She was quite helpful. Her answer did make sense to me which was to build up some extra inventory in the quarter and keep it for customer orders in the following quarter.  Shareholders wanted to sell that extra inventory to pump up sales and cash flow in the quarter and FBK was looking ahead and looking at their customer demand in the following quarter.  They did not want to be put in a position to not have product to sell a customer in the following quarter when they knew their production would be down due to maintenance.  I think it would be different if they just sold all or a lot of their product as market pulp.

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