Not exact matches
Important factors that could cause actual results to differ materially from those reflected in such forward - looking statements and that should be considered in evaluating our outlook include, but are not limited to, the following: 1) our ability to continue to grow our business and execute our growth strategy, including the timing, execution, and profitability of new and maturing programs; 2) our ability to perform our obligations under our new and maturing commercial, business aircraft, and military development programs, and the related recurring production; 3) our ability to accurately estimate and manage performance, cost, and revenue under our contracts, including our ability to achieve certain cost reductions with respect to the B787 program; 4) margin pressures and the potential for additional forward losses
on new and maturing programs; 5) our ability to accommodate, and the cost of accommodating, announced increases in the build rates of certain aircraft; 6) the effect
on aircraft demand and build rates of changing customer preferences for business aircraft, including the effect of global economic conditions
on the business aircraft market and expanding conflicts or political unrest in the Middle East or Asia; 7) customer cancellations or deferrals as a result of global economic uncertainty or otherwise; 8) the effect of economic conditions in the industries and markets in which we
operate in the U.S. and globally and any changes therein, including fluctuations in foreign currency exchange rates; 9) the success and timely execution of key milestones such as the receipt of necessary regulatory approvals, including our ability to obtain in a timely fashion any required regulatory or other third party approvals for the consummation of our announced acquisition of Asco, and customer adherence to their announced schedules; 10) our ability to successfully negotiate, or re-negotiate, future pricing under our supply agreements with Boeing and our other customers; 11) our ability to enter into profitable supply arrangements with additional customers; 12) the ability of all parties to satisfy their performance requirements under existing supply contracts with our two major customers, Boeing and Airbus, and other customers, and the risk of nonpayment by such customers; 13) any adverse impact
on Boeing's and Airbus» production of aircraft resulting from cancellations, deferrals, or reduced orders by their customers or from labor disputes, domestic or international hostilities, or acts of terrorism; 14) any adverse impact
on the demand for air travel or our operations from the outbreak of diseases or epidemic or pandemic outbreaks; 15) our ability to avoid or recover from cyber-based or other security attacks, information technology failures, or other disruptions; 16)
returns on pension plan
assets and the impact of future discount rate changes
on pension obligations; 17) our ability to borrow additional funds or refinance debt, including our ability to obtain the debt to finance the purchase price for our announced acquisition of Asco
on favorable terms or at all; 18) competition from commercial aerospace original equipment manufacturers and other aerostructures suppliers; 19) the effect of governmental laws, such as U.S. export control laws and U.S. and foreign anti-bribery laws such as the Foreign Corrupt Practices Act and the United Kingdom Bribery Act, and environmental laws and agency regulations, both in the U.S. and abroad; 20) the effect of changes in tax law, such as the effect of The Tax Cuts and Jobs Act (the «TCJA») that was enacted
on December 22, 2017, and changes to the interpretations of or guidance related thereto, and the Company's ability to accurately calculate and estimate the effect of such changes; 21) any reduction in our credit ratings; 22) our dependence
on our suppliers, as well as the cost and availability of raw materials and purchased components; 23) our ability to recruit and retain a critical mass of highly - skilled employees and our relationships with the unions representing many of our employees; 24) spending by the U.S. and other governments
on defense; 25) the possibility that our cash flows and our credit facility may not be adequate for our additional capital needs or for payment of interest
on, and principal of, our indebtedness; 26) our exposure under our revolving credit facility to higher interest payments should interest rates increase substantially; 27) the effectiveness of any interest rate hedging programs; 28) the effectiveness of our internal control over financial reporting; 29) the outcome or impact of ongoing or future litigation, claims, and regulatory actions; 30) exposure to potential product liability and warranty claims; 31) our ability to effectively assess, manage and integrate acquisitions that we pursue, including our ability to successfully integrate the Asco business and generate synergies and other cost savings; 32) our ability to consummate our announced acquisition of Asco in a timely matter while avoiding any unexpected costs, charges, expenses, adverse changes to business relationships and other business disruptions for ourselves and Asco as a result of the acquisition; 33) our ability to continue selling certain receivables through our supplier financing program; 34) the risks of doing business internationally, including fluctuations in foreign current exchange rates, impositions of tariffs or embargoes, compliance with foreign laws, and domestic and foreign government policies; and 35) our ability to complete the proposed accelerated stock repurchase plan, among other things.
Actual results, including with respect to our targets and prospects, could differ materially due to a number of factors, including the risk that we may not obtain sufficient orders to achieve our targeted revenues; price competition in key markets; the risk that we or our channel partners are not able to develop and expand customer bases and accurately anticipate demand from end customers, which can result in increased inventory and reduced orders as we experience wide fluctuations in supply and demand; the risk that our commercial Lighting Products results will continue to suffer if new issues arise regarding issues related to product quality for this business; the risk that we may experience production difficulties that preclude us from shipping sufficient quantities to meet customer orders or that result in higher production costs and lower margins; our ability to lower costs; the risk that our results will suffer if we are unable to balance fluctuations in customer demand and capacity, including bringing
on additional capacity
on a timely basis to meet customer demand; the risk that longer manufacturing lead times may cause customers to fulfill their orders with a competitor's products instead; the risk that the economic and political uncertainty caused by the proposed tariffs by the United States
on Chinese goods, and any corresponding Chinese tariffs in response, may negatively impact demand for our products; product mix; risks associated with the ramp - up of production of our new products, and our entry into new business channels different from those in which we have historically
operated; the risk that customers do not maintain their favorable perception of our brand and products, resulting in lower demand for our products; the risk that our products fail to perform or fail to meet customer requirements or expectations, resulting in significant additional costs, including costs associated with warranty
returns or the potential recall of our products; ongoing uncertainty in global economic conditions, infrastructure development or customer demand that could negatively affect product demand, collectability of receivables and other related matters as consumers and businesses may defer purchases or payments, or default
on payments; risks resulting from the concentration of our business among few customers, including the risk that customers may reduce or cancel orders or fail to honor purchase commitments; the risk that we are not able to enter into acceptable contractual arrangements with the significant customers of the acquired Infineon RF Power business or otherwise not fully realize anticipated benefits of the transaction; the risk that retail customers may alter promotional pricing, increase promotion of a competitor's products over our products or reduce their inventory levels, all of which could negatively affect product demand; the risk that our investments may experience periods of significant stock price volatility causing us to recognize fair value losses
on our investment; the risk posed by managing an increasingly complex supply chain that has the ability to supply a sufficient quantity of raw materials, subsystems and finished products with the required specifications and quality; the risk we may be required to record a significant charge to earnings if our goodwill or amortizable
assets become impaired; risks relating to confidential information theft or misuse, including through cyber-attacks or cyber intrusion; our ability to complete development and commercialization of products under development, such as our pipeline of Wolfspeed products, improved LED chips, LED components, and LED lighting products risks related to our multi-year warranty periods for LED lighting products; risks associated with acquisitions, divestitures, joint ventures or investments generally; the rapid development of new technology and competing products that may impair demand or render our products obsolete; the potential lack of customer acceptance for our products; risks associated with ongoing litigation; and other factors discussed in our filings with the Securities and Exchange Commission (SEC), including our report
on Form 10 - K for the fiscal year ended June 25, 2017, and subsequent reports filed with the SEC.
The performance goals upon which the payment or vesting of any Incentive Award (other than Options and stock appreciation rights) that is intended to qualify as Performance - Based Compensation depends shall relate to one or more of the following Performance Measures: market price of Capital Stock, earnings per share of Capital Stock, income, net income or profit (before or after taxes), economic profit,
operating income,
operating margin, profit margin, gross margins,
return on equity or stockholder equity, total shareholder
return, market capitalization, enterprise value, cash flow (including but not limited to
operating cash flow and free cash flow), cash position,
return on assets or net
assets,
return on capital,
return on invested
Cash Flow
Return on Invested Capital (CFROIC) is defined as consolidated cash flow from
operating activities minus capital expenditures, the difference of which is divided by the difference between total
assets and non-interest bearing current liabilities.
U.S. residents do in fact earn more
on their
assets than they pay
on their liabilities, and U.S. firms
operating abroad earn a higher rate of
return than do foreign firms
operating in the United States.
Under the Bonus Plan, our compensation committee, in its sole discretion, determines the performance goals applicable to awards, which goals may include, without limitation: attainment of research and development milestones, sales bookings, business divestitures and acquisitions, cash flow, cash position, earnings (which may include any calculation of earnings, including but not limited to earnings before interest and taxes, earnings before taxes, earnings before interest, taxes, depreciation and amortization and net earnings), earnings per share, net income, net profit, net sales,
operating cash flow,
operating expenses,
operating income,
operating margin, overhead or other expense reduction, product defect measures, product release timelines, productivity, profit,
return on assets,
return on capital,
return on equity,
return on investment,
return on sales, revenue, revenue growth, sales results, sales growth, stock price, time to market, total stockholder
return, working capital, and individual objectives such as MBOs, peer reviews, or other subjective or objective criteria.
Operating Earnings Yield (ttm): 7.2 (11/15 points) Net Income (ttm): $ 293 M Gross Profit (ttm): $ 868 M Total
Assets: $ 3518 M Gross Profitability Ratio = Gross Profit / Total
Assets: 25 % (8/18 points) Cash
Return On Invested Capital (CROIC)(ttm): 12 % Return on Invested Capital (ROIC): 13
On Invested Capital (CROIC)(ttm): 12 %
Return on Invested Capital (ROIC): 13
on Invested Capital (ROIC): 13 %
«In our search for new stand - alone businesses, the key qualities we seek are durable competitive strengths; able and high - grade management; good
returns on the net tangible
assets required to
operate the business; opportunities for internal growth at attractive
returns; and, finally, a sensible purchase price.
A: Our model evaluates five indicators of shareholder wealth and business performance: total shareholder
return, earnings per share growth, change in
operating cash flow,
return on equity and
return on assets.
Annual incentive goals include
operating income,
return on net
assets, and business specific goals for each executive.
Performance share goals include
operating income,
return on net
assets, stock price, and sales.
Okay, then, say the dudes who aren't running a bilion dollar enterprise who are managing the health of their most prized
asset, in whom they have invested $ 150M, and who employ MDs who consult with the eye surgeons who just
operated on the $ 150M
asset, in prepping him to
return to one of the most strenuous athletic endeavors
on earth.
Hedge fund activists tend to target companies that are typically «value» firms, with low market value relative to book value, although they are profitable with sound
operating cash flows and
return on assets.
His variables capture profitability (positive earnings, positive cash flows from operations, increasing
return on assets and negative accruals),
operating efficiency (increasing gross margins and
asset turnover) and liquidity (decreasing debt, increasing current ratio, and no equity issuance).
Extensive research details a
return premium associated with corporate profitability, measured by metrics such as
operating profitability,
return on equity, and
return on assets.10 Novy - Marx (2013) suggested that the so - called profitability anomaly (labeled as such because it defies the efficient market hypothesis) results from investors» limited attention, a form of cognitive and behavioral bias.
You can measure
operating efficiency with
Return on Assets (Net Income /
Assets).
Operating Earnings Yield (ttm): 5.2 % (5/15 points) Net Income (ttm): $ -4169 M Gross Profit (ttm): $ 12348 M Total
Assets: $ 64351 M Gross Profitability Ratio = GP / Total
Assets: 19 % (6/18 points) Cash
Return On Invested Capital (CROIC)(tttm): 9 % Return on Invested Capital (ROIC): -9
On Invested Capital (CROIC)(tttm): 9 %
Return on Invested Capital (ROIC): -9
on Invested Capital (ROIC): -9 %
Operating Earnings Yield (ttm): 5.0 % (5/15 points) Net Income (ttm): $ 5309 M Gross Profit (ttm): $ 21176 M Total
Assets: $ 70786 M Gross Profitability Ratio = Gross Profit / Total
Assets: 30 % (8/18 points) Cash
Return On Invested Capital (CROIC)(tttm): 22 % Return on Invested Capital (ROIC): 12
On Invested Capital (CROIC)(tttm): 22 %
Return on Invested Capital (ROIC): 12
on Invested Capital (ROIC): 12 %
Return on Assets = Net Profit Margin x Total
Assets Turnover = Net
Operating Profit After Taxes / Sales x Sales / Average Net
Assets
These anomalies are: financial distress; O - score (probability of bankruptcy); net stock issuance; composite stock issuance; total accruals; net
operating assets; momentum; gross profitability;
asset growth;
return on assets; and, investment - to -
assets ratio.
Simply put, the potential
asset value of the company is not reflected in the book value, and, if
operating losses can somehow be stemmed and a decent
return on these
assets realized, perhaps shareholders will make out OK.
The cornerstone of this book is
return on net
operating assets [RNOA].
Returning to
asset managers, % of AUM is the key absolute valuation metric, and I believe Price / Sales (based
on operating profit margins) is the best stock specific valuation ratio.
Operating Earnings Yield (ttm): 5.9 % (7/15 points) Net Income (ttm): $ 1601 M Gross Profit (ttm): $ 6660 M Total
Assets: $ 19858 M Gross Profitability Ratio = GP / Total
Assets: 34 % (11/18 points) Cash
Return On Invested Capital (CROIC)(tttm): 13 % Return on Invested Capital (ROIC): 12
On Invested Capital (CROIC)(tttm): 13 %
Return on Invested Capital (ROIC): 12
on Invested Capital (ROIC): 12 %
Invesco bought the Metropolitan in Arlington, Va. in the third quarter of 2010 for $ 125 million at a 5 % capitalization rate, the initial
return based
on the purchase price and annual net
operating income of the
asset.
I prepared spreadsheets showing various scenarios of potential, probable, and possible
return on investment and capitalization rates [a measure of the ratio between the net
operating income produced by an
asset and its capital cost rate].
The primary reason for this is that, over time, older
assets consume a higher percentage of incoming rent as
operating expenses (due to major repairs required) resulting in lower cash flow and
return on investment.