June 2001 NVR ($143.00) <NVR, Inc.

> by charlie479 Description:

NVR is a homebuilder. Their operating model, which is unique (and which is described later), allows them to assume the least risk in the industry and produce returns that are the largest. Homebuilders are generally dismissed because they're cyclical and interest-rate sensitive (really, though, which industry isn't?) and downturns inevitably leave homebuilders holding large inventories of unsold properties -- the unlevered builders then suffer large inventory writedowns while the levered builders go into bankruptcy. However, NVR's model will prevent it from suffering the same fate and, indeed, NVR will prosper in a downturn at the expense of the weaker builders. Two of the most important facets to its operating model are: (1) NVR acquires control of land inventory through options contracts. These contracts give NVR the right to buy finished lots from developers. NVR secures a supply of land for its homebuilding operations through the use of these options whereas other homebuilders purchase land outright and engage in land development. By avoiding that speculative practice of land purchase/development, and instead using options, NVR is able to control large blocks of land (years' worth) in its markets while employing less capital to do so. The lower capital requirements of this method translate into lower inventory risk and greater returns on capital. (2) NVR pre-sells nearly all of its homes. Other homebuilders typically participate in some speculative construction. NVR does not. Before NVR begins construction, an order must be placed and a deposit made. This practice reduces risk and working capital requirements, which further enhance returns on capital. In addition to NVR's superior model, consider the following: -- Low valuation: NVR trades at a P/E of 8.6x trailing (7.1x 2001E EPS) and a TEV / EBITDA of 4.7x (trailing). TEV / (EBITDA - Capex) is 4.8x (trailing). TEV / FCF is 7.8x (trailing). I am defining FCF as Net income plus D&A minus Capex. -- Backlog: NVR has a backlog of 5,765 ordered homes. These homes represent $1.49 billion of revenue. To put this into perspective, this is nearly three fiscal quarters of revenue. In addition, the homes in backlog carry higher gross margins than the ones in the historical results. All of this should translate into higher EPS. (Management says 2001 EPS should be just under $20 per share. In the short history that the company has provided guidance (previously they refused to) they have consistently been ridiculously conservative. Their 1Q results and the backlog indicate to me that the $20 EPS estimate continues to be the case). -- High ROIC: The low capex nature of its business ($301 mil LTM homebuilding EBITDA versus consolidated LTM Capex of $5 mil) and the

low working capital requirements of its model allow NVR to produce superior returns on invested capital: 45.3% in 2000, and 5-year average ROIC of 25%. Bonus fact: In 2000, NVR sold $325 mil more homes than it did in 1999, yet inventory (the bulk of a homebuilder's working capital requirement) increased only $11 million. -- Intelligent allocation of excess capital: High returns on capital and excess cash flows are only useful if you have a management that is smart about deploying it. In NVR's case, management has chosen thus far to deploy that capital to buy back its own stock. Between 12/31/93 and 12/31/00 the company reacquired 13.5 mil shares. In the first quarter of 2001, NVR purchased another 0.85 mil shares For perspective, there are only 8.1 mil primary shares out today (I'm using primary shares to illustrate this but I use diluted shares for enterprise value calculations). -- Homes a basic necessity: People will always need homes to live in. The process of building a home has not changed materially in decades. Neither of these statements is likely to change in the next year, the next 5 years, or even the next 20 years. There is minimal technological or obsolescence risk. -- Dominant in its markets: NVR competes in 18 geographic markets. It is the #1 player in 10 of them. As for the remaining 8, it is usually #2 or #3 (always at least in the top 5). The rest are markets that NVR has just recently entered and will dominate with time. -- Tax factors: The industry has indirectly enjoyed the benefits of a government subsidy in the form of tax deductible mortgage interest. Additionally, in the last few years, homebuyers no longer have to pay tax on the first $500k of capital gains on a home. This lowers the effective purchase price of a home for a consumer, increases the relative attractiveness of a home as an investment, and adds a little boost to demand for NVR's product. NVR's profits and market dominance are all the more amazing when you remember that the results have been achieved without land development. NVR has margins better than its competitors despite the fact that other homebuilders benefit from the gross margin boost of speculative development in an inflationary environment.

Catalyst:
The small number of shares outstanding occasionally creates downward gaps. NVR's recent 25% drop is one such opportunity. large

Also, share repurchases will continue to drive the stock. It's hard to overemphasize the magnitude of the repurchases or the wonderful track record of buybacks: 12/31/95: 12/31/96: 12/31/97: 12/31/98: 12/31/99: 12/31/00: 15.21 (millions of shares outstanding) 13.57 11.09 10.39 9.17 8.86

November 2002 NIHD ($3.41) <NII Holdings > by charlie479 Description:

NII Holdings, which was formerly named Nextel International, is the first investment idea in over a year that I have found worth posting. NII Holdings was incorporated in 1996 as a wholly-owned subsidiary of Nextel Communications (NXTL) to hold all of NXTLs international wireless assets. Between 1996 and 2002, NXTL invested over $500 mil in NII and bondholders invested an additional $2 bil in the company to finance the build-out of NIIs wireless network. Struggling under the weight of its massive debt load, the company decided not to pay a coupon due to bondholders on February 1, 2002 and the company then filed for bankruptcy in Delaware on May 24, 2002. In the ensuing months, the company and its advisors (Houlihan Lokey and Bingham Dana) worked with creditors on a plan of reorganization and on November 12, 2002, NII Holdings emerged from Chapter 11 with a substantially de-leveraged capital structure. The following are the main arguments for investing in the company now: 1. Under-researched, neglected equity Having just emerged from bankruptcy, NIIs shares began trading on the OTC Bulletin Board a few days ago. There are no equity analysts following the situation. Much of the financial detail is buried in hundred-plus pages of disclosure statements and plan documents. 2. Low valuation The companys enterprise value is 2.8 x current annualized EBITDA. The valuation isnt easily discerned from the public filings so I will post the details in a follow-up post. 3. Spectrum rights Spectrum rights are a source of moat much like cable TV franchise rights or broadcast radio license rights. NII owns the rights to spectrum in the 800 MHz region in Brazil, Mexico, Argentina and Peru. 4. Differentiated wireless offering NII offers all of the wireless calling features that traditional wireless operators offer. However, NII offers the DirectConnect feature that its competitors do not (and cannot without expensive network overhauls). DirectConnect is a walkie-talkie-like function on Nextel phones that provides an instant connection to other users in ones designated calling group. For example, field supervisors can simultaneously convey work order changes to multiple field agents using DirectConnect. This DirectConnect feature has two primary benefits: (1) it is a service which is preferred by many business users (such as the above field agents) which tend to generate higher average revenue per user than traditional wireless users and (2) once users get set up into a calling group, there is a natural reinforcement against switching to other carriers (the field agent that leaves Nextel in the above example would cut himself off from DirectConnect messages from others in his workgroup). Indeed, all of the Nextel companies have shown higher ARPU and lower

churn rates than the traditional wireless carriers over a sustained period of time. 5. Capital structure has been fixed NIIs plan of reorganization converted $2.4 bil of bonds into equity. In addition, several credit facilities paid down and a $100 mil Argentina facility was settled for $5 mil. 6. Public comps trade at higher prices. While Im not a fan of comparable company analysis, its worth noting that investors are willing to pay 6.9x 2003 EBITDA for NXTLs equity and over 10x for Nextel Partners equity (NXTP). The average of the traditional wireless carriers is 6.7x. (Note that I am using 2003 EBITDA for the peers but current run rate in calculating the multiple for NII). If NII were to trade at a 5x EBITDA multiple, the stock price would be $28.10. 7. Non-core assets not included in valuation -- In addition to the 1.2 million subscribers it has in its 4 primary markets (Brazil, Mexico, Peru, and Argentina), NII owns wireless assets in Chile and the Philippines. The latter two do not contribute to cash flow and NII is in the process of selling its Philippine stake. 8. Strategic importance to Nextel Communications. NXTL customers are able to roam on to NIIs international network. As an indicator of how important this is to NXTL (particularly in the adjacent Mexico regions), NXTL agreed during the bankruptcy to pay $50 mil to NII to ensure the build-out of certain regions in NIIs territories. NXTL has also made an additional investment in the reorganized NII. NXTL now owns 36% of the common stock of NII.

Catalyst:
1. Emergence from bankruptcy. 2. Eventual move off of the bulletin board onto Nasdaq should raise the profile of NII. Investors in NXTL and NXTP will start to notice NII. 3. Valuation will normalize to 5.0x EBITDA from 2.8x EBITDA currently. NII would trade at $28.10 if it were to achieve a 5.0x EBITDA multiple.

June 2003 SGDE ($9.72) <Sportsman's Guide > by charlie479 Description:

Sportsmans Guide has an unleveraged return on equity of over 35% and trades at 4.85x free cash flow (defined as operating cash flow minus capital expenditures). The company is a retailer of sporting gear and other outdoor items. It sells its products primarily through its catalogs and web site. If you are not familiar with this companys wares, please check out www.sportsmansguide.com and spend freely. 1) The company has a strong niche brand. Its customer following has been cultivated since Sportsmans Guide was founded in 1970 as a catalog of products targeted at deer hunters. Over the years, founder Gary Olen has broadened the original catalog into a business producing $180 mil in revenue per year through a series of monthly catalogs with a distribution of 46 million per year. Indicative of the loyalty of the customers is the success of the companys recent Buyers Club initiative. Buyers Club members purchase a yearly membership for $29.99 to receive catalogs with limited run items available only to members. Members also receive 5%10% discounts on most items. The number of members was 310,000 at 12/31/02. Membership grew 22% last year and has continued to grow in the 1st quarter. 2) A key competitive advantage for a catalog marketer is its database of customer names. 85% of the companys revenues come from existing names in its database of sporting and outdoor enthusiasts. Sportsmans Guide has 5.2 million names with demographic data and purchasing history in its customer files. Of these, 1 million names have purchased a product within the last 12 months. Over time, the company has used response data to subdivide this database into subsets of customers. These subsets receive different specialty catalogs in addition to the main Sportsmans catalog. The specialty catalogs have different product focuses: government surplus, camping, shooting, hunting, etc. Subdivision improves response rates which reduces unnecessary mailing costs and improves economic returns. Ever since the launch of the online Sportmans catalog, the database has also been supplemented with email lists. There are approximately 900k names in the email database and nearly all of them receive a broadcast email every 1 or 2 weeks. 3) The companys bargain focus is hard to replicate. The company has developed a customer following partially because of its history of value-priced bargain items in its catalogs. These items are 25%-60% off retail. The company is able to offer these prices to customers because the company's buying agents comb for discontinued/liquidation/overstock items through a network of 1200 supplier contacts. Because the supply of overstock items is irregular, its critical to have the ability to purchase opportunistically and

store cheaply. All inventory is stocked in Sportsmans warehouses in Minneapolis. Catalogs are customized to include these overstock items shortly before printing so the inventory carrying period is minimized. The companys customer base of bargain hunters allows SGDE to move these items faster than other competing retailers. What cannot be sold via its regular catalogs and online store is liquidated through its bargainoutfitters.com site and a small retail location the company has in Minnesota. Everything from the low grade paper in the companys catalogs to the incentive systems for maintaining high shipping accuracy is aimed at selling cheaply and producing a solid return on capital. 4) I believe there is a fundamental shift in SGDEs business that is reducing costs in the company and improving return on capital. Its this fancy new thing called the internet. Up until 1998, all of the companys business was done through print catalogs. Millions of these catalogs were distributed each year with each one incurring shipping and printing costs. Theres also higher production costs and longer product lead time required when doing business by catalog. The company began its web site in 1998 and by February 1999 had its full product offering on the web. Sales generated through its web site have grown each year from 1998 to 2002: $1 mil, $14 mil, $24 mil, $36 mil, $53 mil. The company is encouraging this transition by prominently mentioning the web site in the catalogs it continues to distribute. In the 4Q of 2002, internet sales generated 30% of total company sales. So what? Well, aside from the reduced capital needs, the company has a chance to take out a major portion of its operating expenses if it can successfully transition its business to the internet. Its current cost of distributing catalogs is approximately $30 mil a year. A large portion of any reduction of this $30 mil in expenses would drop to the bottom line. Considering that free cash flow is currently $8.3 mil, even a small amount of savings would produce a large effect. The company has reduced catalogs mailed from 80 million in 1999 to 46 million in 2002. SG&A (which include the catalog costs) has been falling: 34.8% of sales to 30.8% in 2001 to 29.3% in 2002. These are the initial signs of the internet's impact on Sportsman's business.

Catalyst:
The company has recently initiated a share repurchase program to retire up to 10% of its outstanding stock. The company has a history of returning capital to stakeholders. $7.4 mil of debt was paid down in 2000. $5.2 mil of debt was paid down in 2001. (In 2002, cash simply built up because debt was retired). Now that the company is debt free, it is using a portion of its cash hoard (currently equal to about 20% of market cap) to retire a substantial number of outstanding shares.

July 2005 LQU ($25.00) <Quilmes Industrial (Quinsa), > by charlie479 Description:
Quilmes Industrial (Quinsa) is a very high quality business with excellent returns on capital. Its stock sells at a cheap price and a change of control is going to occur. Quinsa is the dominant beer brewer in several South American countries. Its beer brands account for 79% of the market in Argentina, which is the companys main market (I will tackle Argentina issues in the Q&A). Quinsa also controls 97% of the market in Bolivia, 95% in Paraguay and 98% in Uruguay. One of the hallmarks of a great business is very little competition and as the Nielsen figures indicate, Quinsas competitors have not been very successful going up against the company. To make matter worse for the competition, Quinsa acquired the operations of the #2 competitor in its markets two years ago and thereby increased its lead in Argentina, Paraguay and Uruguay. Also as a result of that transaction, AmBev became a large shareholder of Quinsa. AmBev will not be doing business in Quinsas markets except through its interest in Quinsa. This removes the threat of a competitor entering from neighboring Brazil. What are the competitive advantages that allow Quinsa to maintain its monopoly-like position? Quinsa is the lowest cost producer. The company produces a greater volume of beer than any other local competitor so it reaps advantages from economies of scale. Its facilities operate at higher capacity utilization rates so fixed costs are spread over large quantities. It purchases more bottles, more crown-tops and other inputs than its competitors so it has an advantage in buying inputs cheaply (interesting note: Quinsa owns the farms that produce much of the barley and its developed barley strains account for nearly all the barley produced in Argentina). Quinsas cost of goods sold per liter is among the lowest in the world, let alone the lowest in its markets (Quinsa manages to make a 54%-56% gross margin on net revenue of only $0.345 per liter. For comparison, Anheuser-Busch gets net revenue of $0.94 per liter but its gross margin is only 40%). This discourages foreign competitors from entering the market as they are unlikely to be able to match prices. Quinsa has strong brands. The phrase strong brands can be an over-applied investment banking sales pitch but in this case Quinsas brands are a true source of durable competitive advantage. Beer is a product that consumers choose by brand instead of price (the next time you order a beer at a bar or a restaurant, notice if you even look at the price before you order). Quinsa has ingrained its Quilmes brand in the minds of millions of beer drinkers in Argentina with countless television commercials, billboard displays, radio spots and other advertisements over much of the modern part of its 100+ year history. These advertisements are a Pavlovian

bombardment of positive associations for the Quilmes brand: people, parties, soccer, music, national pride, etc.

beautiful

Additionally, millions of these beer drinkers have had dozens of positive experiences over their lifetime drinking Quilmes beer. If you add to this mix the chemical reinforcement properties of alcohol, the result is a population with a deep-rooted affinity for Quilmes. This share of mind is the same thing that Buffett describes as Coca-Colas most valuable intangible asset. It is very difficult for a competitor to replicate this because theyd first have to spend years advertising to build up the necessary number of positive image associations in peoples minds. And theyd have to spend years trying to associate their brand with millions of positive taste experiences. Quinsa has already been training its population for decades. Besides the obstacle of time, the competitors have the obstacle of money. Quinsas competitors would have to spend a disproportionately large amount of their budget on advertising to match Quinsa. Quinsa spends over $55 mil per year on advertising. This amount is more than the local beer revenue of many of its competitors. Quinsa has also locked up certain key sponsorships such as the national soccer team and popular club teams. Quinsa dominates the channels of distribution. Quinsas beer is available at over 440,000 points of sale. Many of these points of sale are either covered by the company directly or serviced through independent distributors. There are 800 of these distributors and Quinsa has exclusive arrangements with nearly all to sell only Quinsa products. Quinsa happens to also be the largest Pepsi bottler in a few of its countries so its negotiating power with distributors is compounded. As a result of its overwhelming market share, Quinsa is able to spread its volume over several geographicallydispersed distribution centers whereas competitors can support only one. This creates a cost advantage in transportation expense. The comprehensive coverage provided by the numerous points of sale means that Quinsas beers are nearly always readily available, a key in developing favorable consumer consumption patterns. Whenever a customer wants a Quilmes, one is available. When I visited Argentina, sometimes a 2nd beer choice was simply not available. Enough qualitative stuff, numbers please. Quinsa trades at 5.98x 2005E EBITDA. The multiple of 2004 EBITDA is 6.75x. The 2005 estimate is a forecast from a valuation report commissioned to justify the price offered by InBev to AmBev shareholders, so there was an incentive to skew the value of AmBevs stake in Quinsa lower. This estimate has EBITDA growing by 12.9% in 2005 despite the fact that EBITDA grew by 48% last year (even with a 32% increase in advertising spending in Argentina). Quinsa is on pace to surpass the forecasted EBITDA, as it grew by 28% in the first quarter of 2005 (Quinsa does not publish quarterly results but you can find it if you dig into the filings for AmBev). Winter here is summer down there so 1Q 05 is one of the 2 key selling periods. The calculations I present here are based on the conservative EBITDA forecast minus certain items I subtract to adjust things to US GAAP.

EBITDA has limitations of course but in this case it may be the most important metric because it is the key variable in a takeover formula that I will explain later. Also, because of the importance of this EBITDA-driven takeover formula I believe the company is currently overspending on capex (i.e. EBITDA-capex may understate the cash flow generation ability of the company). It trades at 9.19x 2004 EBITDACapex and 9.18x 2005E. I am using actual capex, not maintenance capex and not making any adjustments for overspend. The EBIT multiples are 9.88x 2004 and 8.07x 2005E. The companys blended income tax rate is 34.5%. However the company has $196 million of accumulated tax loss carryforwards so the cash paid for income tax has been materially lower. Even at a full tax rate, the valuation multiples are very reasonable for a company with 60% pretax returns on tangible capital and high double digit cash flow growth rates. Quinsas high return on capital is not apparent at first glance because the financials are prepared according to Luxembourg GAAP, which does certain strange things like recording treasury stock as an asset as opposed to a reduction of shareholders equity. You have to make some adjustments to get a clear picture of the true economic return on capital. For those of you who want comps, these are the 2005 EBITDA multiples for some other global brewers. These are Morgan Stanleys figures. AmBev $30.02 per share 9.3x Anheuser-Busch $46.54 10.4x Fomento Economico Mexicano $57.59 Grupo Modelo $31.10 8.6x Heineken $31.50 7.0x SABMiller $15.30 7.1x Change of Control When AmBev exchanged its operations in Argentina, Paraguay and Uruguay for a stake in Quinsa in 2003, it entered into a put/call agreement with Quinsas controlling shareholder. The agreement gives the controlling shareholder the right to sell its stake to AmBev at a price determined by a formula in Schedule 1.04 of the agreement. This put right is exercisable annually. The next exercise date is in April 2006. If the put is not exercised in the next few years then AmBev has a call option to purchase the shares at the formula price. When there is a put and a call struck at the same price it is bound to be exercised by one of the parties. The formula is not simple enough to include in this write-up but it essentially values LQU at the greater of (1) 8x EBITDA and (2) the trailing EBITDA multiple for AmBev. It then applies some discounts to determine the number of AmBev shares that would be issued for LQU shares. According to my calculations, the formula would have produced a sale price of $48.25 per share of LQU if the put had been exercised in April 2005. Applying the various discount factors would have left a price of $38 realizable in the form of AmBev shares. As I mentioned earlier, EBITDA for 2005 could be substantially higher than last year so if the other variables remain the same then the put price could be higher at the exercise date in April 2006.

6.5x

Why should we care if 55% of the voting power is put to AmBev? The European Union adopted the Takeover Directive in March 2004 to harmonize takeover laws. It specifies mandatory bid requirements to be adopted by member states for acquisitions of companies in the EU. If an acquirer obtains voting control of a target, the acquirer must follow with an offer for the remaining public shares. The offer must be made at an equitable price, which is defined as the highest price paid by the acquirer for any shares within the last 12 months (EU members can make this as short as 6 months). If control of Quinsa transfers to AmBev at $38 per share for example then laws implementing the Takeover Directive would require a mandatory offer to minority shareholders at $38 per share. I think that this is an attractive situation even without the possibility of a mandatory bid. AmBev and Quinsas controlling shareholder have demonstrated an interest in increasing their ownership percentages through share purchases and company buybacks. In August 2004, the company purchased 41% of the float through a tender offer. So far in 2005, the company has purchased another 4% of the float through open-market share repurchases as high as $24.96 per share and as recently as June 15. Also, page 21 of the recently filed Form 20-F mentions that the board has been considering a transaction involving a buyout of the minority shares. The company has been so eager to buy up shares that when it ran into a constraint created by Luxembourg law (a company cannot continue buybacks if it depletes certain treasury stock reserves) it decided to go through the hassle of changing its fiscal year twice, creating two stub periods, and holding several annual/special meetings in order to approve the necessary reserves. Its worth mentioning that this little technicality, which has been keeping Quinsa out of the stock market for the last few weeks, will end a few days from now. On July 15, 2005 there is a special meeting to get the flexibility to resume the share repurchase program and authorize certain dividend payments. Incidentally, Luxembourg law does not give acquirers minority squeezeout rights so the controlling shareholders cannot force a going private transaction (a Luxembourg lawyer explained the rationale to me this way: if you are the owner of shares then why should anyone have the right to take those shares away from you at a price you dont want?). Other dynamics and catalysts Quinsa is a great business with rapidly growing cash flow and it is available at a cheap price. These core factors are enough to produce an attractive investment on their own. As a bonus, there are several additional factors converging together that could make this a really great opportunity. The put option formula creates an incentive for the controlling shareholder to maximize EBITDA and reduce shares outstanding. The controlling shareholder knows that it will be parting with its stake in Quinsa, which it has held for generations, so they are motivated to optimize the inputs in the put option formula. To maximize EBITDA, the company has recently been raising prices at a healthy pace. Since the execution of the put/call agreement, Quinsa

raised beer prices in its primary market by 10% in March 2003, and then another 10% in September 2003. Prices were raised again in 2004, with the most recent increase (8% on a consolidated average in December 2004) not yet fully reflected in the trailing numbers. Run-of-the-mill businesses cannot withstand large price increases like this but with a wide-moat business like Quinsa you can raise prices without losing volume. Quinsas volumes have actually been increasing despite the price hikes (2002: 7.619 mil hectoliters of beer, 2003: 9.921 mil hectoliters, 2004: 10.396 mil hectoliters remember, though that in 2003 Quinsa made an acquisition). As the volumes have gone up, cost of goods sold per hectoliter have fallen (down 10% in 2003, down 2% in 2004). Equally impressive is the decline in administrative and general expense on an absolute basis even though revenues have grown substantially the controlling shareholder is very serious about maximizing EBITDA. A wide-moat business like Quinsa has enormous latent earnings power that is not reflected in the income statement until management decides to start raising prices. The put option has been a catalyst for Quinsa to flex its pricing muscle. Because the put option formula does not penalize for capex spending, the company has begun to ramp up capital investments. The capacity of a malting plant in Argentina is being doubled for $27 mil, a new bottle facility in Paraguay is being built for $10 mil and a new soft drinks production line is being added for $10 mil. These investments should facilitate higher revenue, higher EBITDA and ultimately, a higher sale price for shareholders. The impending change of control has also encouraged the company to continue doing the right things in returning capital to shareholders and deploying excess cash. Last year Quinsa purchased several minority interests in key operating subsidiaries, which will increase the proportionate EBITDA credited in the formula. The company has also done the previously mentioned share buybacks and after July 15, 2005 it will have the power to buy the equivalent of 11%-13% of the current float. I like the fact that the people piloting the ship have been passing up opportunities to exercise their put option at a price that is much higher than the publicly-traded price today. The put was likely not exercised last year because of the anticipated price increases and other EBITDA-maximization efforts. EBITDA ended up growing 48% in 2004. I believe that the anticipated effect of price increases and EBITDA growth is the main reason that the put was not exercised in April of this year. I do not mind the deferral of the change of control if insiders think that EBITDA is going to increase at a pace sufficient to compensate for passing on a massive premium today.

Catalyst:
Investor recognition of a great business. Resumption of buybacks on July 15th. Change of control at a large premium, as early as April 2006. Controlling shareholders may offer to take the company private before then.

Recent price increases and future increases will begin to demonstrate the companys true earnings power. sheets.