Description

Before elaborating on why we believe ELXSI is a really interesting situation, please know that this is a most appropriate investment idea for Small Funds and PAs.

What is ELXSI Corporation?

Founded in 1980, ELXSI Corporation is a holding company that currently contains two businesses that only in a joke could you find synergies: CUES and Bickford’s Family Restaurants (BFRI). CUES is a leading manufacturer and assembler of closed circuit television video (CCTV) and highly specialized rehabilitation equipment to inspect and repair underground sewer lines. They are the dominant player with over 50% share of the United States sewer maintenance market for their products and services. Bickford’s is a casual dining business serving customers out of its five establishments in New England.  In the classic case of “good business, bad business”, the steep multi-decade growth of CUES coupled with Bickford’s gradual ‘winding down’ have left CUES as responsible for roughly 93% of ELXSI revenues and 100% of its operating income.  Essentially, CUES is ELXSI.

Why is ELXSI Corporation a compelling investment?

CUES is a Great Business:

·       Market share > 50%

·       Revenue Growth (organic) – 7% CAGR since 1996 and 6.6% CAGR since 2006

·       Operating Margins > 20%, Incremental Operating Margins  ~ 40% (42% in 2013, 31% in 2014, 38% in 2015, 44% in 2016, 173% TTM)

·       ROIC (tax adjusted at 40% assumed rate) ~ 20%, incremental ROIC ~ 50%

·       Diversified customer base of municipalities (and contractors servicing municipalities).   

·       Vertically integrated, customized maintenance solution offering range of products and services from robotics/hardware in the field to software and data analysis in the office creates customer stickiness.

·       Further barriers to entry include high upfront inventory requirements, scarcity of trained labor, and risks to municipalities for selecting a new entrant.

·       Company is innovative, but seemingly judicious in capital spending today: Digital side-scanning system, introduced in 2013, provides material cost and productivity benefits for municipalities to shift from digital to analog systems.  Mapping system might be their ‘next big thing’.

·       General trends supportive of demand for services: aging sewer systems, federal infrastructure spending, shift from analog to digital systems

·       Logical approach for municipalities to monitor sewer lines for slightly over $1 thousand per mile because:

o   It reduces infiltration of groundwater/rainwater and therefore reduces risk of much more costly pumping and treating wastewater.  

o   It is more cost effective than paying (perhaps) $1M per mile to replace pipe or face onerous fines/career risk for failing to protect your municipality.

Valuation is Compelling

·       TTM = 6.2x EV/EBT (on $16M EBT, $21M of net cash/securities, $11M DTA which should be used over next 18 months ~ $32M of Net Cash).

·       2018 EV/EBT ~ 3.6x (assuming no added buybacks, dividend payments, or material acquisitions)

·       A few factors (in addition to the NOL being fully utilized) make us think that the Company could be for sale (or dividend recap) in 18 months.

·       Assuming 11x (unlevered) pre-tax free cash flow, company is worth roughly $75 per share.  Applying the current EV/EBIT multiple of 18.6x to the 16-peer group below, we arrive at $116 per share in 2018.  And, by all measures, CUES seems to be a better (if not much better) business.

Brief Corporate History

ELXSI is short for “electronics times (multiplied by) silicon”.  The name originated from computer guru Gene Amdahl who sought to create a mini-supercomputer in 1980. (http://www.nytimes.com/2015/11/13/technology/gene-amdahl-pioneer-of-mainframe-computing-dies-at-92.html?_r=0). After 9 years and $226 million in accumulated losses (NOLs), Mr. Amdahl finally sold ELXSI to a group of investors led by current ELXSI CEO, Alexander “Sandy” Milley.  This group of investors attempted to monetize these NOLs through accumulating cash generative businesses in leveraged buyouts. Since 1989, ELXSI has purchased numerous businesses.  The most recent acquisition, a designer and installer of cabinetry for retailers called Contempo Design, closed in 2007 after only three years under ELXSI’s umbrella.  Today, only Bickford’s Restaurants and CUES remain.

Brief Bickford’s Background

Bickford’s History: In 1991, ELXSI bought 30 Bickford's and 12 Howard Johnson's restaurants from Marriott. http://www.nytimes.com/1989/12/19/business/marriott-plans-retreat-from-fast-food-wars.html

These restaurants were scattered throughout New England and specialized in all day breakfast food. Over the years, the margins and profitability of the restaurants have deteriorated.  Ultimately, ELXSI decided to exit the unprofitable Bickford’s restaurants. Today, the Company still operates 4 restaurants and subleases out locations at four formerly unprofitable Bickford’s.  At this time, Bickford’s generates roughly $6M in annual revenue and roughly $100,000 in annual operating income.  The business is currently “doing no harm” and will be wound down as the lease agreements permit.  While in 2016, the lease obligations exceeded sublease income by $650,000, this differential declines to $150,000 in 2020.  So we anticipate further declines in open stores over the next few years.  We effectively attribute zero value to this business.

Brief CUES History

CUES History: In 1992, ELXSI purchased CUES from Cadmus Corporation, another company owned by the Mr. Milley.  Originally founded in 1964 as a sewage-focused subsect of Penetryn Systems (a company that was involved in the restoration of railroad bridges), CUES has enjoyed a strong trajectory under the leadership of Mr. Milley and CFO David Doolittle with revenues growing from $21M in 1996 to $43M in 2006 to $82M in 2016.  Here is a video from CUES 50 Year Celebration on the progress of the company: https://www.youtube.com/watch?v=EGj0MxSL17E

The Business of CUES: A Dominant Position in an Essential Public Service

Perhaps it is self-explanatory as to why the repair and maintenance of sewage pipeline infrastructure is a common good. In summary, cracks in pipes allow water to infiltrate the system resulting in raw sewage flowing into city streets, building and especially bodies of water.  This is obviously a material health hazard and the reason the U.S. EPA through the Clean Water Act as well as State Agencies set stringent conditions for municipalities and set penalties so high relative to the very modest cost of maintenance (e.g. perhaps 2%-4% of a sewer districts’ budget).

While the end market is not glamorous, CUES products are actually quite sophisticated robotic, computer, and engineered parts that are packaged in a sturdy truck frame (e.g. Chevy, Ford, Dodge).  This truck is equipped with various hardware (e.g. computers) that is attached to cable tethers.  These tethers are attached to small robots with extensive cameras.  Specifically, while CUES still has lots of products and still overwhelmingly sells Analog cameras, the CUES Digital Univeral Camera (DUC) is a symbol of their position as an innovative industry leader.  The DUC is a semi-autonomous, high-resolution digital CCTV side-scanning camera designed for rapid and detailed condition assessment of a wastewater system.  When used in conjunction with CUES asset-based Granite XP decision support software, a municipality can inspect and assess 5000 feet of sewer pipe per day http://www.cuesinc.com/pdf%20docs/DUC%20HD%20Camera.pdf.  Depending on the identified issue, CUES suite of technology can often help cut, seal, or make other repairs to sewer pipe.

Competitive Environment

To our understanding, CUES has benefited in recent years because its historic rival suffered from ‘self-inflicted wounds’.  Our understanding is that this had something to do with a family squabble, but we are not certain.  The website itself indicates that Aries is trying to “re”brand itself. https://www.ariesindustries.com/our-story/.  CUES capitalized on this moment of weakness by penetrating markets where Aries had a strong presence.  They even, so brazenly, set up a Midwest Sales office in Aries hometown of Waukesha, Wisconsin.  In the meanwhile, European and Asian competitors have been attempting to capture market share as well.  CUES is in the “driver seat” relative to these foreign challengers as well as against new entrants for a handful of reasons:

·       First of all, CUES has longstanding relationships with municipalities, are embedded in their systems, and have a reputation for quality products and service.

·       Secondarily, CUES has the widest breadth of product in the industry.  For example, CFO David Doolittle commented during our visit to their Orlando Headquarters that the most popular camera comes with 30 different options.  This product breadth is valuable to municipal and contractor customers who have niche requirements due to particular pipeline structures and water treatment systems.  Historically, CUES has carried inventory levels at roughly 25% of their annual sales.  As the company with roughly 50% market share, competitors can either keep a much smaller level of inventory or need to be at a working capital disadvantage relative to CUES.  This upfront expense is likely prohibitive to a new entrant without strong financial backing and a long-term time horizon.

·       The Company has a reputation for exceptional customer service and technological expertise in an industry.  Even CUES says that one of its biggest issues (and core strengths) is finding, training, and retaining talent:  https://www.youtube.com/watch?v=CWUiww4KXiI

·       Municipal mistakes can prove really costly.  Switching hardware and software (including data management systems and vast imagery library) is a risk especially when moving away from the industry leader to a less proven entity.

To this end, one of the reasons why CUES will lose bids is that some municipalities must select the “lowest bid”.  Offsetting this challenge are industry consortiums that “approve products” for local municipalities and streamline purchasing decisions for them.  These consortiums enable some municipalities to get around local requirements low bid purchases without fair regard to the quality of product or service.

Finally, one CUES customer had described the company to us as the Apple of its industry.  She said that while competitors often act more ‘like PCs’ and interact well with other products, CUES interacts less well.  It is akin to entering the Apple ecosystem.  And replacing their parts with competitors’ parts is not easy or smooth.  So you are effectively stuck working in their ecosystem and they can charge you accordingly when something breaks or a renewal comes due.  She did mention that this isn’t necessarily a bad thing because they have a very good reputation for quality and service, but it is a consideration before “getting in bed” with them.

Product and Service Markets

CUES has both a Product offering (see fully equipped trucks described above) as well as a Service Offering.  The Product offering, described above as the selling of fully equipped trucks, is lower margin business. It represents roughly 60% of current sales.  The Service offering, including the software package and replacement parts, is higher margin and represents roughly 40% of current sales (up from roughly 33% about two years ago).

CUES trucks and equipment can have various life cycles depending on the intensity and environment of use.  Sometimes municipalities can keep trucks for 10-20 years.  In contrast, some trucks might only last 3-5 years if they are being used in a more intense manner.  In this regard, parts often require updating or replacement due to both the harsh sewer environment in which they operate and innovations with meaningful returns on investment.  In this regard, we would strongly suggest reviewing this study from the City of Tampa from August 2016 through January 2017. https://www.linkedin.com/pulse/case-study-operations-costs-production-benefits-duc-digital-parker?trk=mp-reader-card

In summary, CUES DUC (“digital”) outperformed every analog vehicle in the City of Tampa’s fleet by an average of 1,231 feet per day (or 2.2x greater production than that of the analog systems).  The average total operations cost per foot over the six-month period was 22.3 cents for the DUC truck versus 48.5 cents per foot for the analog fleet.  This implies an average savings of over 26.2 cents per foot in total operations costs stemming from the ease of use of the system and the ability to virtually pan, tilt, and zoom inspections that can be coded anywhere and at any time. Since Tampa has 1800 miles of gravity sewer, this savings equates to $2.6 million for the entire system.  In this regard, it perhaps makes sense to replace Analog trucks with digital technology for (perhaps) $150,000-$300,000 for a brand new, fully equipped truck.  http://www.nbc-2.com/story/35491541/fort-myers-spends-250k-for-drain-inspections.  While the uptake of digital technology has been relatively slow (e.g. municipalities are slow to change), improvements in digital imagery and reductions in camera sizes may provide an additional tailwind to demand over time.

Cyclical Tailwinds

According to The National Association of Clean Water Agencies, the average U.S. household spends roughly $500 per year for sewer service.  If the relative pricing power of this service (and arguably underpriced currently) isn’t immediately relevant, here is a quote from Robert Gordon’s book entitled The Rise and Fall of American Growth: “The primary goal of the public health movement of the late 19th century was to create universal clean water supplies and sewage systems.  In fact, clean water technologies have been labeled as “likely the most important public health intervention of the 20th century”.  Empirical research based on a comparison of cities in 1890 and 1900 shows that the extent of construction of waterworks, measured by miles of waterworks per person and per acre, have a significant negative correlation not just with infant mortality, but also with adult mortality.  During this period, 80 percent of the decline in the total mortality rate is accounted for by four categories: diarrheal diseases, typhoid, tuberculosis, and diphtheria.  Cutler and Miller date the major advance of chlorination to the years between 1906 and 1918 and of filtration to 1906 to 1922.  This coincides with the extremely rapid decline in the death rate from typhoid fever, a primarily waterborne disease, by a factor of five between 1900 and 1920….These authors estimate that clean water filtration and chlorination systems explain half of the overall reduction in mortality between 1900 and 1936, as well as 75 percent of the decline in infant mortality and 67 percent of the decline in child mortality”.

According to The American Society of Civil Engineers, an organization which gave the U.S. wastewater infrastructure a D+ grade in 2017, provides some general facts about the market size: (https://www.infrastructurereportcard.org/wp-content/uploads/2017/01/Wastewater-Final.pdf)

“Nearly 240 million Americans – 76% of the population – rely on the nation’s 14,748 treatment plants for wastewater sanitation. By 2032 it is expected that 56 million more people will connect to centralized treatment plants, rather than private septic systems – a 23% increase in demand. In the U.S., there are over 800,000 miles of public sewers and 500,000 miles of private lateral sewers connecting private property to public sewer lines. Each of these conveyance systems is susceptible to structural failure, blockages, and overflows. The U.S. Environmental Protection Agency (EPA) estimates that at least 23,000 to 75,000 sanitary sewer overflow events occur in the United States each year.

While much of the municipal sewer lines were replaced after World War II and improved in the 1970’s, most of these pipes are built with an expected life of 50 years.  Increasingly, infiltration and leakage problems emerge as pipelines reach the later stages of their useful lives:

http://www.mswmag.com/online_exclusives/2014/09/10_things_you_should_know_about_u.s._municipal_infrastructure

http://www.waterworld.com/articles/print/volume-15/issue-4/editorial-focus/aging-pipe-proves-expensive-for-municipalities.html

Historical Financials and Expectations Going Forward

For a frame of reference, in the early 2000’s, CUES was an NASDAQ listed company generating over $100M in revenues with 75% of these revenues coming from the Bickford’s business.  As the restaurant business deteriorated in the early/mid 2000’s, ELXSI engaged in a series of sales and transactions to offset losses and pay down debt.  Over a multi-year period, they managed to stabilize the Bickford’s business.  In the meanwhile, the after-thought business of CUES continued to be run in a thoughtful manner.  While the company doesn’t make it easy to segment out the COGS & SG&A at ELXSI, it does provide segment revenues, operating income, and trends in COGS/SG&A that help you back into these figures.  Here is some historic data on the two core businesses and unallocated corporate overhead over the last 20 years.

While CUES does experience cycles as municipal budgets tighten (e.g. revenues declined by roughly 10% between 2008 and 2010), the general aging of pipelines in the United States and the relative value to opportunity cost of maintenance has placed general tailwinds behind inspection and maintenance and most slowdowns in spending are transitory and smoothed out in the fullness of a cycle.  For example, as you can see in the chart below, the 5-Year trailing annualized revenue growth ranged between 4%-13% and the 5-Year trailing annualized EBIT growth ranged between 3% and 37%. Over the past decade, revenues and operating earnings have increased at a 6.5% and 13% annualized rate.

Based on historical metrics and recent trends, we anticipate the top line growth will continue on a steady 7%-8% rate as general tailwinds for the industry continue.  Due to the expansion into a lease for an additional 52,000 square foot Orlando facility in late 2015/early 2016, there is opportunity to increase truck production from the roughly 230 new trucks manufactured in 2016.  Furthermore, this expansion gave the company additional ability to expand its “in-sourcing” efforts of more and more features of their product offering so to continuing expanding gross profit margins and differentiate themselves from their competitors.   With more trucks in the field every year and more opportunity to capture “in-sourcing” profit, we believe that incremental margins can remain in the 35%-40% range over time.

At roughly 35% incremental operating margins, the CUES business should generate roughly $18M and $21M in EBIT on $88M and $96M in 2017 and 2018, respectively.

Capital Requirement and Capital Allocation

As mentioned above (and as we will discuss below), ELXSI has a very scarred history with regards to acquisitions.  Fortunately, ‘near death’ experiences have left management (based on conversations with them) very conservative as it pertains to investment and capital allocation.  For example, it wasn’t until the Company was ‘bursting at the seams’ in their Orlando HQ that it entered into a 3 year lease with the option to extend.  Part of management’s explanation is that they didn’t want to overcommit should their increasing backlog prove ephemeral.  They made a modest capital outlay to address near term service and backlog issues while remaining flexible in the long-term.

Recent investments have focused ‘in-sourcing’ certain formerly outsourced manufacturing as well as R&D toward ancillary products servicing their existing relationships. For example, CUES has been focusing on camera technology for evaluating the safety and soundness of the sewer manholes themselves.  Secondarily, they recently developed a map product that provides 3-D maps of undergournd pipes for places like government installations and military bases.  Considering CEO Milley’s brother is General Mark A. Milley (Chief of Staff for the U.S. Army), we believe that CUES had confidence in the eventual opportunity before initiating the investment.

Besides the robust inventory to service diverse customer needs, the Company is minimally capital intensive with capex running between $1.1M and $1.4M over the past 3 years.  Adjusting fully for the Net Cash and the DTA (and applying a 40% tax rate to EBT), ROIC was roughly 20% in 2016 with high incremental ROIC.  From 2011 to 2016, CUES grew EBIT by over $10M while increasing its segment asset base from $29M to $47M.

While management doesn’t appear to need much capital to grow the business, future capital allocation decisions might matter a great deal.  More on this below.

Valuation

With regards to valuation, we tried to approach this from a few angles.  The first is just to look at a basket of comparable businesses.  While the basket is fairly diverse, we would highlight that CUES would trade anywhere from $56 to $87 per share based on the average and median valuations of these companies.  More impressively, EBIT margins are roughly 50% higher (19% v 12%-15% for the basket), Returns on Capital are 26% versus 7%-9% for the basket, and Return on Equity is higher even though half of the Equity is tied up in a excess cash and a DTA that will likely be used up by the end of 2018.  Furthermore, they have 5-Year Sales CAGR of 7% versus competitors at 2%-4% and 5-Year EBIT CAGR of 35% versus competitors at 3%-4%.  Essentially, while we use the peer valuations for reference purposes, there is a strong argument that CUES is a better business than this basket.  Perhaps significantly better.

For reference purposes, we excluded Bickford’s revenue and modest operating earnings and merely applied all unsegmented corporate costs to CUES.  Furthermore, even though ELXSI currently pays minimal taxes due to its ‘tax shield’, we applied a 40% tax to EBIT to calculate ROC and ROE.  Also, for ROC, we excluded the cash and DTA, since neither are necessary at this point to run the business.

The second way in which we look at valuation is to ask ourselves what the company might sell for once the DTA is run through toward the end of 2018.  To get to this point, we estimated that revenues grow by 6% and 9% in 2017 and 2018, respectively.  This arrives at $87M and $95M in revenue.  Based on incremental operating margins in the 40% range, this implies EBIT of $17M and nearly $20M after taking into account unallocated corporate expense.  Assuming a cash tax rate of roughly 6% and roughly $2M in Capex and working capital needs in excess of very modest depreciation (~$1M/yr), the Company should generate over $30M in after-tax FCF between 2017 and 2018.   Furthermore, the DTA should decline from $12.7M at the end of 2016 to roughly $7M and $0 by the end of 2017 and 2018, respectively.  We assume no additional buybacks or cash distributions.

In summary, in 18 months, CUES should be sitting on:

·       $52M of net cash

·       $20M in TTM EBT

·       Revenue growth continuing in mid-to-high single digits due to secular tailwinds, captive customers, and a dominant market share.

·       Incremental operating margins around 30%-40% and minimal capital needs

To this end, we take a 11x EBT multiple to trailing EBT and add back $52M in cash to arrive at a fair EV of $273M.  Assuming no additional share repurchases, this brings fair value to roughly $75 per share versus $35 per share today.  Due to the highly cash generative, defensive profile of the business, an acquirer could easily change the capital structure to include a few turns of debt.  We estimate that a buyer (or ELXSI through some internal corporate restructuring) could:

·       Return corporate cash

·       Add a few turns of leverage (e.g. $80M of debt at 5% ~ $4M interest expense)

·       Write a $140M equity check

·       Receiving a 7-8% after-tax free cash flow (pre-synergies) on a great business.

Management: Realigned Interests and a Ticking NOL

So where others might see a problem, we see an opportunity (but a risk): ELXSI and CEO Milley have a history of questionable acquisitions (e.g. restaurants, closets, etc.) and related party transactions and loans (see below).  

With regards to acquisitions, we are quite confident that management is fully preoccupied running CUES and has little time or inclination to take on another business at this time.  They readily admit their mistakes in prior acquisitions and, to their credit, have done a good job managing down the Bickford’s business over the past few years instead of investing further in it.

With regards to the insider transfers, management would claim that these are in the past.  They would say that much of this was due to various periods of cash stress at the business.  This is one side of the story.  The other side of the story was laid out in in a blog piece from few years ago http://otcadventures.com/?p=1283.  The details of the various agreements and repayments are laid out quite well in the 2013 annual report:

http://www.otcmarkets.com/financialReportViewer?symbol=ELXS&id=118230

Our view was, and continues to be, that this was a restructuring of historical practices based on an emergence of engaged shareholders and a new reality for Milley who saw his future tied to the success of CUES as opposed to pilfering modest amounts in a contentious relationship with shareholders.  Here is a summary of the agreement:

·       The company forgave significant loans made to the CEO to do, amongst other things, buy shares of ELXSI stock.  The shares loaned were largely returned to the Company.

·       The outside management agreement between CEO Milley’s Cadmus business and ELXSI was cancelled after 25 years starting in 2014.  The CEO had earned roughly $1.2M-$1.3M per year in 2012 and 2013 but hadn’t received compensation from this arrangement between 2002 and 2010 because ELXSI failed to generate $4M in Operating Income.

·       The cancellation of this inter-party Cadmus/ELXSI relationship was replaced with a grant to provide the CEO the right to receive up to 80,000 shares of Common Stock per year (up to 400,000 over 5 years) so long as the Company earns $4M per year.

Since the inception of this new agreement, the shares earned, issued, and related expenses have been working through the financial statements.

·       Specifically, all 400,000 of the shares were earned in 2014-2016 with $1.6M, $1.6M, and $.5M included in corporate expense per year, respectively.  This cost is no longer running through the financial statements.

·       The CEO has been issued 160,000 shares (80k in 2015 and 80k in 2016).  He allowed the company to retire 47,626 so as to pay for withholding taxes. The remaining 240,000 shares will be issued over the next three years. This is the difference between basic (3.425M) and diluted shares outstanding (3.665M).  We assume full dilution in all valuation calculations but, based on recent experience, it is not unreasonable to believe that the diluted shares will look more like 3.5M come 2018.

While this arrangement takes some time to understand, it set a path toward following through on other promises including retiring the Phantom Debt owed to some former executives at Bickford’s, the cancellation of their untapped revolver, and a continued buyback (roughly 200,000 shares over the past few years at very accretive levels).  Furthermore, conversations with management have gradually shifted toward an awareness of an “event” in a few years when the company will have worked through its NOL.  In the meanwhile, they have put a “small amount of their cash in ‘conservative dividend paying stocks’” but are trying to balance a fine line between all of the cash that is accruing and earning nothing in the bank relative to the risks (and potential rewards) to investing a small part of this cash in a conservative manner as they figure out next steps. Frankly, we would prefer that they just kept cash for the time being.

Based on proxy materials and extrapolating future issuance to the CEO as specified above, we estimate that Mr. Milley owns roughly 1.25M shares (33%), well regarded investor Peter Kellogg owns roughly 1.2M shares (32%), Farrokh Kavarana (Vice Chairman of Tata) (8%), and (according to management) there are a few additional ‘active investors’.

While cash accrues and the tax shield looks to expire, we know a few things about Mr. Milley:

1) He has suffered a series of near fatal professional losses due to poor acquisitions

2) He does not like to pay taxes

3) In 2016, he sold his residence in his lifelong hometown of Winchester Massachusetts (perhaps to avoid any tax implications down the road).  We imagine that his State of Residence is Florida (CUES is HQ in Florida).

4) By 2018, he will be able to collect Social Security

5) Mr. Milley has a habit of doing what is in his best interest

What is in Mr. Milley’s Best Interest?

Due to the success of ELXSI and his 1/3rd stake, we would not be surprised if the Company was sold in 2019. Based on our Base Case assessment of Fair Value above, Mr. Milley would be looking at a $90M personal take.  Alternatively, Management has indicated looking into a dividend recapitalization which could, by year end 2018, return the entirety of today’s $35 per share in cash to shareholders and still be covering Interest Expense 4x-5x via EBITDA generation in a minimally capital intensive business with a sticky, diversified customer base in an industry with strong secular tailwinds.    

In summary, we believe that due to the success of CUES and the large stake of CEO Milley, there is fortunately a general alignment of interests. In the meanwhile, the business churns out cash and every day is one day closer to the transformative catalyst that we have been awaiting for some time.

Catalyst

Dividend Recapitalization or Sale of the Business when the NOL is fully utilized toward the end of 2018.