EXELON CORPORATION (NYSE: EXC)

Sail Boat in the bay just off the City of Havre de Grace

 

I have Baltimore Gas and Electric that supplies my home with gas and electric. I just found out this morning that my utility company is being bought out by Exelon Corporation (NYSE: EXC). This will make Exelon the largest Utility in the Northeast United States.

In the latest of a wave of utility mergers, Chicago giant Exelon (EXC_) announced Wednesday it is picking up Pepco Holdings (POM_) for $6.8 billion in cash, making it the top player along the mid-Atlantic.

The combination of Exelon's BGE in Baltimore, ComEd in Chicago and PECO in Philadelphia with Pepco's Atlantic City Electric in New Jersey, Delmarva Power in Delaware and Pepco in Washington, D.C., will serve 10 million customers with a rate base of $26 billion and further expand Exelon's regulated holdings, ensuring a balanced earnings mix as power prices recover, Exelon said.

The purchase works out to $27.25 per share, nearly a 20% premium over its closing price Tuesday of $22.79. Exelon said it anticipates the acquisition being "significantly" accretive to its adjusted earnings in the first full year after closing.



As I walk to the public library, I pass this house in the City.

 



What is Darnell's angle on this stock?

In the 1970s, I created a "Buy and Hold" Strategy called the Williams Plan. The strategy calls for buying stock in utility companies and using the dividends of these companies to buy more utility stocks giving more dividends. By doing this, the investor compounds their dividend. Does it work? Well put it this way, Stephanie, my oldest daughter was able to take the money that I started investing for her when she was born and got the following items 18 years or so later;

• A current model car

• Books for college

• A down payment on her new families first house.

As I leave the Public Library, I walk past the pink house.

 

I don't own Exelon or Pepco but I suggest buying this stock for the Williams Plan. Exelon recent price is $34.66 per share with a dividend of $1.24 per share per year. That is a yield of 3.58% per year. I suggest this for a long term buy and hold strategy. An investor can use this stock in a ShareBuilder's Plan or a regular cash account to take advantage of dividend compounding.   

Chesapeake Granite Wash Trust

Today is April 10, 2014 and I just left my job for the last time. I retired. It was only 34 years ago that I started working for someone else full time and making my first stock market investments. I went into a brokerage firm in the Golden Triangle in downtown Pittsburgh, Pa. and started looking around. Some man came over and asked if he could help me. I said sure. I want to learn how to buy stocks. He asked me if I want to invest for growth or income? I had no idea what the hell he was talking about. Income sounded good so I said “income.”

This is when this stock broker introduced me to Utilities stocks that gave a good high yield dividend. I learned quickly that the income sector of the stock market is where I wanted to be. I graduated from income stocks to Junk bonds giving me a better return with less risk.

Today, as I shut the door at work for the last time, I noticed that the stock market is falling like a rock. At the same time, I heard that income stocks were the only investments that are going up just like 34 years ago. Nothing seems to change.

Chesapeake Granite Wash Trust (CHKR) sold recently for $10.65. The stock low over the past 52 weeks has been $9.60 and the high has been $17.23.

This company owns royalty interests in oil, natural gas liquids, and natural gas properties located in the Colony Granite Wash play in Washita County in the Anadarko Basin of western Oklahoma. It has royalty interests in 69 horizontal producing wells and 118 horizontal development wells, as well as in approximately 29,300 net acres of area. As of December 31, 2011, the reserve estimates for the royalty interests were 17.9 million boe of proved developed reserves and 24.3 million boe of proved undeveloped reserves. The company was founded in 2011 and is based in Austin, Texas.

CHKR - Historical Dividend Data

Payouts Increasing For2 years

Payout Amount	Declared Date	Ex-Dividend Date	Record Date	Pay Date ▼	Qualified Dividend?	Payout Type	Frequency
$0.6624	2014-02-07	2014-02-14	2014-02-19	2014-03-03	Unknown	Regular	Quarter
$0.6671	2013-11-07	2013-11-15	2013-11-19	2013-11-29	Unknown	Regular	Quarter
$0.6900	2013-08-08	2013-08-15	2013-08-19	2013-08-29	Unknown	Regular	Quarter
$0.6900	2013-05-09	2013-05-17	2013-05-21	2013-05-31	Unknown	Regular	Quarter
$0.6700	2013-02-08	2013-02-14	2013-02-19	2013-03-01	Unknown	Regular	Quarter

 

      

Investing in Bankrupt Companies

I bought Junk Bonds in a company where about 6 months later declared bankruptcy. Anyone who took my online course knows that the people holding corporate debt such as corporate bonds get paid before anyone else.

 

After Neebo came out of bankruptcy, I was awarded a new bond and stock in the new company. Today it is worth on the Over the Counter Market, $1,201.20 for every $500.00 invested about 4 years ago. Who said that an investor does not make money on bankrupt companies? Here is the latest financial report on this company.

 

Neebo, Inc. Reports Fiscal Third Quarter Financial Results

Revises Second Quarter Results

Adjusted EBITDA increased $1.8M; Reaches agreement to extend $40 million credit facility; Inventory position improved by 28 percent through expedited supply chain strategy

LINCOLN, Neb.--(BUSINESS WIRE)—

Neebo, Inc. (the “Company”; NEEB⁺) today announced financial results for the fiscal third quarter ended Dec. 31, 2013, and revised its second quarter results. Neebo, Inc. is a holding company and the beneficial owner of Nebraska Book Company, Inc., an industry leader in solutions for the college store marketplace.

Third Quarter Fiscal 2014 Earnings

Although it is reporting its fiscal third quarter results today, the Company is continuing to investigate certain costing issues within its inventory system. The Company is not currently able to predict the outcome of this investigation or the timing of its completion. While it is possible that this investigation could result in material changes to the Company’s third quarter and revised second quarter financial statements issued today, it is currently anticipated that the results will not have any impact on the balances currently reported for cash and cash equivalents, long-term debt or net cash flows used in operating activities, or on the Company’s liquidity. Should any material change result, the Company will issue a press release detailing the material impacts on its published financial statements and reissue the impacted financial statements.

Second Quarter Fiscal 2014 Earnings Revision

Concurrently with publishing these financial statements for the nine months ended Dec. 31, 2013, and Dec. 31, 2012, the Company is also revising its previously published financial statements for the second quarter and the six months ended Sept. 30, 2013. During second quarter fiscal 2014, a system error shortened the time period in which deferred revenue and income are recognized. This resulted in the recognition of approximately $4.2 million and $1.9 million in deferred revenue and gross margin, respectively, in the second quarter of fiscal 2014, which should have been recognized and reported in third quarter fiscal 2014 results. The correction of this issue had no impact on financial statements reported for the nine months ended Dec. 31, 2013, and Dec. 31, 2012. In conjunction with revising second quarter fiscal year 2014, the Company is withdrawing its Management’s Discussion and Analysis for the second quarter and the first six months of 2014. Investors are urged to review the Management’s Discussion and Analysis for the third quarter and the first nine months of 2014 that the Company is issuing today. Below is a table summarizing the financial impact to the second quarter P&L of certain revised line items.

($ in 000’s)			Three months ended September 30, 2013
											Adjusted
			Revenue				EBITDA				EBITDA
As previously reported			167,035				26,705				26,838
Deferred rental revenue (Note 1)			(4,204	)			(1,890	)			(1,890	)
Loyalty card (Note 2)			801				801				801
Obsolescence (Note 3)			-				333				(333	)
Other			-				170				170
Discontinued operations (Note 4)			(2,410	)			(16	)			(21	)
As revised			161,222				26,103				25,565
Increase(Decrease)			(5,813	)			(602	)			(1,273	)

_{Note 1) The Company corrected its methodology for calculating deferred rental revenue. The deferred rental revenue adjustment reduces the amount of revenue recognized in the fiscal quarter ended Sept. 30, 2013, with a corresponding amount recorded in the fiscal quarter ended Dec. 31, 2013. For the nine months ended Dec. 31, 2013, the statement of operations was not impacted by this correction.}

_{Note 2) The loyalty card adjustment represents a refinement to the estimated liability based on historical usage. Due to the seasonality of the Company's business, management determined that the fiscal quarter ended Sept. 30, 2013, was the most appropriate quarter to begin reflecting the refined calculation.}

_{Note 3) The inventory obsolescence adjustment represents a refinement to the factors used in estimating the reserve that more accurately reflects the Company's historical experience. Due to the seasonality of the Company's business, management determined that the fiscal quarter ended Sept. 30, 2013, was the most appropriate quarter to begin reflecting the refined calculation.}

_{Note 4) Impact of closed stores moved to discontinued operations in third quarter fiscal 2014.}

Company Extends Credit Facility; In Process of Negotiating ABL

The Company has agreed with its existing lender to extend its credit facility for six months to Sept. 4, 2014. The extended facility will provide $40 million in availability, subject to the terms of the facility agreement. In addition, the Company is in negotiations with interested parties to enter into a new, multi-year revolving ABL credit facility.

Expedited Supply Chain Strategy Increases Inventory Position by 28 percent

In the second quarter of fiscal 2014, the Company launched an expedited supply chain strategy, which advanced units to successfully fill demand. This resulted in accelerated availability of an additional 72,000 units, increasing the fulfillment of demand in the third quarter. As a result, the Textbook Division inventory position was improved by 28 percent.

Strategic Staffing Results in SG&A Efficiencies

The Company continues to look for ways to improve efficiencies and invest in innovative strategies. This involves allocating resources differently to achieve higher returns. In fiscal year third quarter, the Company made proactive, strategic changes in staffing within college stores and related administrative positions, which led to an SG&A reduction. In addition, the Company staffed college stores team members to more closely fit the workload week-by-week as activity fluctuated, rather than hiring staff to fill across-the-board levels.

Selected Financial Data for Fiscal 2014 and Fiscal 2013 Third Quarters ($ in 000’s)
			Three months ended
			December 31,					December 31,					Percent
			2013					2012					Change
Total assets			$	308,348				$	360,470				(14.5	)%
Long-term debt				124,520					160,146				(22.2	)%
Revenues, net of returns				64,632					64,443				0.3	%
Adjusted EBITDA**				(242	)				(2,040	)			(88.1	)%
Adjusted EBITDA Margin				(0.4	)%				(3.2	)%
			Nine months ended
			December 31,					December 31,					Percent
			2013					2012					Change
Net cash flows used in operating activities				(12,168	)				(24,603	)			(50.5	)%
Net cash flows used in investing activities				(3,414	)				(6,053	)			(43.6	)%
Net cash from (used in) financing activities				1,234					(54,285	)			102.3	%
** Adjusted EBITDA is a non-GAAP financial measure. See additional disclosure below.

Conference Call

Management will hold a conference call on Monday, March 10, 2014, at 9:00 a.m. CST to report the Company’s fiscal year 2014 third quarter financial results.

To participate in the conference call, interested parties should call 800-230-1093 or 612-332-0107 (international) and dial in 10 minutes prior to the start time of the call. The participant access code is 318534. A replay of the conference call will be available from March 10, 2014, at 11:00 a.m. CST through March 25, 2014, at 11:59 p.m. To access the replay, callers should dial 800-475-6701 or 320-365-3844 (international) and use access code 318534.

The unaudited condensed consolidated financial statements as of and for the three and nine months ended Dec. 31, 2013, and Dec. 31, 2012, as well as the revised condensed consolidated financial statements for the three and six months ended Sept. 30, 2013, are located on the Financial Filings page of the Company’s website at http://www.nebook.com/financial/company_filings.asp.

About the Company

Neebo, Inc. is the beneficial owner of Nebraska Book Company, Inc., which began in 1915 with a single college store near the University of Nebraska campus and now operates more than 206 stores, serving more than 2 million students at colleges and universities nationwide. Nebraska Book Company, Inc. sells and rents more than 8.7 million textbooks annually and supports technology platforms and e-commerce sites at more than 1,200 bookstore locations. Additional information about Nebraska Book Company, Inc. can be found at the Company’s website: http://www.nebook.com.

*Neebo, Inc. common stock is not listed, traded or quoted on any U.S. stock exchange but is quoted on the OTC Pink Market under the symbol NEEB.

Notice Regarding Forward-Looking Statements

This press release contains forward-looking statements that from time to time involve risks and uncertainties, as well as assumptions that, if they do not fully materialize or prove incorrect, could cause the Company’s business and results of operations to differ materially from those expressed or implied by such forward-looking statements. Such forward-looking statements include statements that discuss management’s beliefs and assumptions and can be identified by the use of words such as “will,” “may,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “intends,” “potential,” “continue” or the negative of such terms, or other comparable terminology. These forward-looking statements, which include anticipated borrowing availability under the extended credit facility and the potential outcome of the Company’s investigation of certain costing issues within its inventory system, speak only as of the date of this press release. 

The Company undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, except to the extent required by applicable law. Additional information regarding forward-looking statements, as well as risks and uncertainties that may affect results and could cause results to differ materially from those expressed in such forward-looking statements, is contained in the Management’s Discussion and Analysis that was posted on the Company’s website today.

Selected Financial Data

The information contained herein is more fully detailed and explained in the Company’s Dec. 31, 2013, Unaudited Consolidated Financial Statements and Management’s Discussion and Analysis, as well as the Company’s Sept. 30, 2013, Revised Unaudited Consolidated Financial Statements, which are available at http://www.nebook.com/financial/company_filings.asp.

Consolidated Statement of Operations ($ in 000’s)
			Three months ended															Nine months ended
													Successor					Successor					Predecessor					Non-GAAP
													nine months					six months					three months					nine months
			Successor					Successor					ended					ended					ended					ended
			December 31,					December 31,					December 31,					December 31,					June 30,					December 31,
			2013					2012					2013					2012					2012					2012
Revenues, net of returns			$	64,632				$	64,443				$	284,459				$	247,811				$	62,235				$	310,046
Costs of sales				37,914					36,168					169,743					141,069					39,099					180,168
Gross profit				26,718					28,275					114,716					106,742					23,136					129,878
Operating expenses:
Selling, general, and administrative				27,827					30,817					96,964					75,370					28,509					103,879
Depreciation				1,528					1,743					4,918					3,343					1,461					4,804
Amortization				2,261					2,282					6,579					4,490					2,033					6,523
				31,616					34,842					108,461					83,203					32,003					115,206
Income (loss) from operations				(4,898	)				(6,567	)				6,255					23,539					(8,867	)				14,672
Other (income) expenses:
Interest expense				6,527					5,615					34,376					15,694					8,350					24,044
Interest income				(17	)				(3	)				(7	)				(22	)				(14	)				(36	)
				6,510					5,612					34,369					15,672					8,336					24,008
Income (loss) before reorganization items and income taxes				(11,408	)				(12,179	)				(28,114	)				7,867					(17,203	)				(9,336	)
Reorganization items				—					(629	)				—					(1,308	)				(275,466	)				(276,774	)
Income (loss) from continuing operations before income taxes				(11,408	)				(11,550	)				(28,114	)				9,175					258,263					267,438
Income tax expense (benefit)				(4,553	)				(3,943	)				(11,123	)				3,842					—					3,842
Income (loss) from continuing operations				(6,855	)				(7,607	)				(16,991	)				5,333					258,263					263,596
Income (loss) from discontinued operations, net of tax				(1,085	)				309					(1,561	)				247					(1,976	)				(1,729	)
Net income (loss)			$	(7,940	)			$	(7,298	)			$	(18,552	)			$	5,580				$	256,287				$	261,867

Net Revenues by Segment ($ in 000’s)
			Three months ended															Nine months ended
													Successor					Successor					Predecessor					Non-GAAP
													nine months					six months					three months					nine months
			Successor					Successor					ended					ended					ended					ended
			December 31,					December 31,					December 31,					December 31,					June 30,					December 31,
			2013					2012					2013					2012					2012					2012
College Stores			$	39,321				$	40,497				$	189,305				$	169,943				$	38,178				$	208,121
Textbooks				27,183					30,282					105,136					88,428					25,885					114,313
Complementary Services				4,099					5,323					14,934					12,721					4,984					17,705
Intercompany eliminations				(5,971	)				(11,659	)				(24,916	)				(23,281	)				(6,813	)				(30,094	)
Total net revenues			$	64,632				$	64,443				$	284,459				$	247,811				$	62,234				$	310,045

Gross Profit by Segment ($ in 000’s)
			Three months ended															Nine months ended
													Successor					Successor					Predecessor					Non-GAAP
													nine months					six months					three months					nine months
			Successor					Successor					ended					ended					ended					ended
			December 31,					December 31,					December 31,					December 31,					June 30,					December 31,
			2013					2012					2013					2012					2012					2012
College Stores			$	14,528				$	17,001				$	66,194				$	58,844				$	13,666				$	72,510
Textbooks				12,619					11,678					45,588					45,606					9,056					54,662
Complementary Services				2,288					2,538					7,341					6,129					2,512					8,641
Intercompany eliminations				(2,717	)				(2,943	)				(4,407	)				(3,837	)				(2,098	)				(5,935	)
Total gross profit			$	26,718				$	28,274				$	114,716				$	106,742				$	23,136				$	129,878

EBITDA and Adjusted EBITDA ($ in 000’s)
			Three months ended															Nine months ended
													Successor					Successor					Predecessor					Non-GAAP
													nine months					six months					three months					nine months
			Successor					Successor					ended					ended					ended					ended
			December 31,					December 31,					December 31,					December 31,					June 30,					December 31,
			2013					2012					2013					2012					2012					2012
EBITDA
Net income (loss)			$	(7,940	)			$	(7,298	)			$	(18,552	)			$	5,580				$	256,287				$	261,867
Interest expense, net				6,510					5,612					34,368					15,672					8,336					24,008
Provision (benefit) for income taxes				(4,553	)				(3,943	)				(11,122	)				3,842					-					3,842
Depreciation				1,528					1,743					4,918					3,343					1,461					4,804
Amortization				2,261					2,282					6,579					4,490					2,033					6,523
EBITDA				(2,194	)				(1,604	)				16,191					32,927					268,117					301,044
Adjusted EBITDA
EBITDA				(2,194	)				(1,604	)				16,191					32,927					268,117					301,044
Reorganization professional fees				-					(629	)				-					(1,308	)				13,382					12,074
Gain on settlement of liabilities subject to compromise				-					-					-					-					(288,848	)				(288,848	)
Fresh start adjustments				-					(2,285	)				-					(9,193	)				-					(9,193	)
Discontinued operations				1,085					(309	)				1,561					(247	)				1,977					1,730
Severance and voluntary costs				365					158					729					246					230					476
Site closures, settlements and other costs				-					-					-					48					533					581
Share-based compensation				53					48					176					-					8					8
Other miscellaneous one-time costs				449					2,581					904					4,758					2,256					7,014
Adjusted EBITDA			$	(242	)			$	(2,040	)			$	19,561				$	27,231				$	(2,345	)			$	24,886

Adjusted EBITDA by Segment ($ in 000’s)
			Three months ended															Nine months ended
													Successor					Successor					Predecessor					Non-GAAP
													nine months					six months					three months					nine months
			Successor					Successor					ended					ended					ended					ended
			December 31,					December 31,					December 31,					December 31,					June 30,					December 31,
			2013					2012					2013					2012					2012					2012
College Stores			$	(1,834	)			$	(3,254	)			$	4,699				$	5,384				$	(2,397	)			$	2,987
Textbooks				8,214					8,050					31,178					30,693					4,295					34,988
Complementary Services				(50	)				(486	)				(276	)				237					(102	)				135
Corporate Administration				(3,303	)				(3,620	)				(10,939	)				(5,521	)				(1,943	)				(7,464	)
Intercompany Eliminations				(3,269	)				(2,730	)				(5,101	)				(3,562	)				(2,198	)				(5,760	)
Total adjusted EBITDA			$	(242	)			$	(2,040	)			$	19,561				$	27,231				$	(2,345	)			$	24,886

Non-GAAP Financial Information

The common definition of EBITDA is “Earnings before Interest, Taxes, Depreciation and Amortization.” In evaluating financial performance, the Company uses Adjusted EBITDA to evaluate, assess and benchmark its operational results. Adjusted EBITDA consists of EBITDA adjusted to exclude the effects of certain specified items of revenue or gain and expense or loss. The Company’s definition of Adjusted EBITDA is EBITDA plus adjustments to exclude items that impacted EBITDA yet are not considered a part of our normal operations, such as: cost and benefits related to the Chapter 11 process and our restructuring, discontinued operations, one-time severance and voluntary costs, and site closure costs and cost related to our store divestiture plan. Inter-divisional profit impacts are also excluded with respect to each business segment in connection with computing segment Adjusted EBITDA. In addition, we also exclude certain non-cash data, including share-based compensation.

EBITDA and Adjusted EBITDA are not measures of financial performance under generally accepted accounting principles (“GAAP”). They should not be considered in isolation or as a substitute for net income (loss) in accordance with GAAP. EBITDA and Adjusted EBITDA exclude components that are significant in understanding and assessing our results of operations and cash flows. In addition, the Company’s measure of Adjusted EBITDA, as presented in this press release, may not be comparable to similarly titled measures used by other companies.

However, EBITDA and Adjusted EBITDA are presented, as management believes the measures are relevant and useful information widely used by analysts, investors and other interested parties in our industry. The Company understands certain investors use them to measure the Company’s operating performance. Accordingly, management is disclosing this information to permit a more comprehensive analysis of the Company’s operating performance. EBITDA and Adjusted EBITDA financial information are reconciled to net income (loss).

Company Earnings

Investment & Company Information

Contact:

Neebo, Inc.
Media Relations:
Cassie Grenemeier, 402-730-0500
cgrenemeier@neebo.com