Author Topic: VULC - Vulcan International  (Read 19889 times)

wabuffo

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Re: VULC - Vulcan International
« Reply #10 on: February 14, 2019, 11:36:33 AM »
writser - have you checked if they have any outstanding lawsuits via PACER or State Courts in OH, TN and MI?   I may be wrong, but I feel like they've had to deal with environmental liabilities in their operating history, too.     

In order to liquidate, they have to convince the Chancery Court of Delaware that they have settled any and all claims before they would be allowed to distribute funds to shareholders.

Do you have a sense for any of this risk?  Its the one area I'd be concerned about if this was a litigious management team and has manufacturing plants with a long operating history that may have environmental issues associated with its past operations.

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writser

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Re: VULC - Vulcan International
« Reply #11 on: February 14, 2019, 01:55:29 PM »
No, haven't thought of that but it is a smart idea. A quick search on pacer yields no significant recent lawsuits as far as I can see. But I'm no expert on pacer let alone state courts so I might very well be missing something.
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wabuffo

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Re: VULC - Vulcan International
« Reply #12 on: February 14, 2019, 02:06:31 PM »
I've got a PACER account and will take a look at the Federal Courts to see if they are a defendant anywhere (though I don't have all of their various current opco names.

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dyow

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Re: VULC - Vulcan International
« Reply #13 on: February 14, 2019, 02:10:50 PM »
Edit: never mind my previous post

I would have to think through how this would be taxed as a foreigner. Like i said in my previous post i i got hit on my tax slip with a dividend for tax purposes on a tax free spin which should have been a ROC.  Even though this was wrong the i had to back it out manually and hope i didn't get audited. 
« Last Edit: February 14, 2019, 02:25:14 PM by dyow »

writser

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Re: VULC - Vulcan International
« Reply #14 on: February 14, 2019, 02:39:41 PM »
I agree that one of the main risks is a tax-inefficient distribution for minority shareholders. The good thing is that the company is at least aware of the tax issue and thought it was important enough to mention in the press release. Iím not an expert on handicapping the tax risk but if you can buy at 125 and get 127.5 in the full-taxation scenario then thatís a risk I can live with. Also I can use the withheld taxes as tax credits where I live. That reduces the risk a bit but is not true for most of you.
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dyow

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Re: VULC - Vulcan International
« Reply #15 on: February 14, 2019, 03:01:47 PM »
Yeah if you are able use the full withheld amount as a tax credit, it makes a lot more sense and you should get a solid return if they return most of the cash this year, which doesn't seem to be an issue considering the liquidity of most of their assets..

hillfronter83

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Re: VULC - Vulcan International
« Reply #16 on: February 14, 2019, 05:06:09 PM »
I've got a PACER account and will take a look at the Federal Courts to see if they are a defendant anywhere (though I don't have all of their various current opco names.

wabuffo

What is the source of this potential environmental liability? I didnít see this mentioned in 2016 annaul report.

wabuffo

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Re: VULC - Vulcan International
« Reply #17 on: February 14, 2019, 05:43:16 PM »
What is the source of this potential environmental liability? I didnít see this mentioned in 2016 annaul report.

I don't know if there is any and I am not saying that there is.  I'm just highlighting one kind of risk that can sometimes pop up with old manufacturing facilities that are being shut down.   And when you are dealing with a company that no longer provides 10-Ks, you have to use your google-fu skills to dig through public databases.

Vulcan did have to deal with some environmental liabilities at a former site in Massachussets in the late 90s.  It settled with the US Federal Govt/EPA and paid ~$4m for its share of clean-up and remediation activities at a Superfund site.

Back when it used to file 10-Ks before going dark, it used to include this comment as part of its legal risk language (could just be boilerplate):
"There may be other potential clean-up liability at other sites of which the Company has no specific knowledge."

The Clarksville, TN plant was a Goodrich Tire Co. plant before Vulcan bought it in 1972 - but the facility dates back to the 30s.

FWIW, here's some EPA reporting for the Vulcan Clarksville, TN plant that highlight some of the chemicals used at the plant and quantities disposed of:
https://iaspub.epa.gov/triexplorer/release_fac_profile?TRI=37041VLCNC1151E&year=2007&trilib=TRIQ1&FLD=&FLD=&FLD=&OFFDISPD=&OTHDISPD=&ONDISPD=&OTHOFFD=

wabuffo
« Last Edit: February 14, 2019, 05:48:28 PM by wabuffo »

Foreign Tuffett

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Re: VULC - Vulcan International
« Reply #18 on: March 11, 2019, 07:00:06 PM »
Re their real estate holdings. Note that I've tried to be conservative with these #s:

1) 14K acres of forestland in MI (@ $500 per acre = $7M)

2) Per their last 10-K: "majority interest in the upper seven floors of the ten-story Cincinnati Club Building....approximately 56,000 square feet of finished office space and approximately 32,000 square feet of unfinished and common area space." I am giving this the same per sqf value ($50) as the office building directly below (@ $50 per sqf of leasable space = $2.8M)

3) Per their last 10-K: 68,612 sq foot "four-story office building in downtown Cincinnati" that they purchased in 1/2015. I believe this building to be 630 Main Street. I also believe that it is mostly vacant, and probably has been since they purchased it. (@ $3.4M cost)

4) 33 acre Clarksville facility, which is now vacant. I think the building is a tear down + possible environmental clean up issues. (@ $100K per acre = $3.3M)

5) Florida property that was held for sale @ YE 2016 (@ $2.5M balance sheet value)

6) Shopping center that they purchased in 2017 (@ $3.8M purchase price). In my model I'm not giving them any credit for any post YE 2016 cash flow despite factoring in the 2017 and 2018 dividends paid to VULC shareholders, so I feel OK about including this.

Total: $22.8 million

Any thoughts?

Former Teldar Paper Vice President

Hielko

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Re: VULC - Vulcan International
« Reply #19 on: March 12, 2019, 02:13:51 AM »
I valued the timberland a significantly higher based on some recent transactions KEWL did in the same area, but besides that I roughly get the same numbers as you do.