8th consecutive trading session in a row.
40 replies (most recent on top)
I don’t see anyone laughing at Kodak. A comparison between Xerox and Kodak lends perspective of how dire Xerox’s situation is and how this could have been avoided. Well past the event horizon now.
We were down to $5.94 around lunch time.
Mr.Pres? 🤣
"How low can it go … "
It can go to 0. When the earnings report comes out, we'll probably find out that debt exceeds the Enterprise Value of the company. It's already a multiple of the market cap (5x, 5x). Credit will be shut off, and xrx will be worth more dead, than alive to the lenders. When short term credit stops, so does payroll.
I see people laughing at Kodak on here. Kodak will be fine, XRX won't.
How low can it go … Thx Mr.Pres
XRX says "$5 here we come!!!" 🤣
🤣
"Hey it's "quote the last post" guy"
NO IT'S NOT!!!!!
Hey it's "quote the last post" guy
NO IT'S NOT!!!
XRX has never done a successful acquisition, including financial services in the 80's. ACS was the last nail in the coffin. LEX is cr-p and IT Savvy is de minimus.
Believe what you want. I am more familiar with the negotiations than you are. You probably don’t even work here anymore. Go get stuffed in a locker.
"They have already agreed to allow IT Savvy to run independently inside of Xerox. Part of the agreement. Stop with the doom and gloom. They will be fine."
This is hilarious! They will run independently inside of Xerox? They will be fine? Stop with the doom and gloom?
It sounds like you drank the Kool-Aid.
They have already agreed to allow IT Savvy to run independently inside of Xerox. Part of the agreement. Stop with the doom and gloom. They will be fine.
"STOP IT!!!"
Stop what? What do you want stopped?
STOP IT!!!
Somebody with actual knowledge in the space posts something that's factual, but emotionally neutral and gets negative remarks.
It tells you a great deal about the mindset of those folks: Bitter and lacking the emotional intelligence to provide an equally factual response using words....Sad.
I don't comment on the copier side, because it's not my world, and it's been in secular decline for decades. I wish the former copier people would do the same for the IT business.
Several of the XBS Cores and C2 and Powerland have been significant contributors on the IT side for decades. The combination of these units and IT Savvy is where the $750M figure comes from (and it's actually a little more).
No, the margins aren't as high as the copier teams, but it's significantly higher than the posters in here are making it out to be. It has significant and growing cloud business, and consults with clients like Lowes, Northrop Grumman and large K-12 clients (in the top 1% in size).
The margins on hardware have shrunk considerably since the it's, but Technical and Pro Services have 30% -50% GM and notebooks are low margin, but data center, security, and hybrid / on-prem cloud are sophisticated offering requiring higher end skill sets for the pre-sales consulting, sales, professional and technical services.
The poster is correct about the Bruno / Munu connection and that is a concern. Every acquisition that XRX has made has been horrifically implemented and virtually destroyed the vibrancy of the acquired entity.
So the challenge will be allowing the differences in the business units to survive. XRX can continue to manage the legacy business to it's eventual "right-size," and allow this new entity to stabilize and then grow it's market share.
It will never be a 50% GM business, but it can be successful and add revenue and reasonable profitability to enhance XRX's bottom-line.
Will XRX have the foresight and fortitude to actually admit that they don't know everything about a business they aren't in, or will they snuff the life out of it like they did GISX and ACS?
Time will tell.
"STOP LYING!!!"
I'm not. IT Flabby is a VAR. They sell laptops and do some services.
It's not a services company, it's a VAR they sell hardware, if XRX wanted a services company, it bought the wrong company.
There are 100's of VARs just like it out there, the only thing that makes it unique is that the CEO of Flabby and the COO of XRX are BFFs from back in the day.
STOP LYING!!!
"IT Flabby is a computer reseller, margins are low selling new laptops"
Yes. 100% true. It's a VAR. They sling hardware.
Why this VAR? John Bruno.
Bruno and Munu are old friends from when they worked at Aon together.
STOP IT!!!! IT IS NOT!!!
IT Flabby is a computer reseller, margins are low selling new laptops
You have no life
no you're wrong
Yup. WOW, the net profit margin is less than 1%. It is true.
It's all debt and overhead, choking ITsavvy.
Three years ago it was a debt free company with ~200 employees bringing in about the same revenue on 12-15% margin. The PE firm really fu---d them up. SAD
"Is this public somewhere? If true, that is a bombshell."
"I think that 351million/9 months number is wrong, but if not, holy sh-t that is terrible."
See for yourself - the information is public and available on the SEC website.
https://www.sec.gov/ix?doc=/Archives/edgar/data/1770450/000177045025000006/xrx-20241120.htm
ITSavvy (nine months ended September 30, 2024):
· Net sales (revenue): $351.3M
· Cost of goods sold (COGS): $302.2M
· Gross profit: $49.2M (~14% gross margin)
· Selling, general & admin expenses (SG&A): $39.3M
· Operating income: $9.9M (~2.8% operating margin)
· Interest expense: $6.3M
· Income before tax: $3.6M
· Income tax expense: $1.0M
· Net income: $2.6M (~0.74% net profit margin)
"ITSavvy's latest 9-month revenue was $351M, which projects to ~$460-470M annually (not $750M)."
Is this public somewhere? If true, that is a bombshell.
ITsavvy's revenue was ~$420 million years ago before they bought INOC and that Chromebook company in Wisconsin. They spent all that money buying these other companies and bolting them on to make ITsavvy stronger, and for what? Debt and $50 million in revenue.
I think that 351million/9 months number is wrong, but if not, holy sh-t that is terrible.
ITSavvy's latest 9-month revenue was $351M, which projects to ~$460-470M annually (not $750M).
This deal looks more like the sellers (PE) knew ITSavvy was in a sh*tty position, were desperate to exit, and accepted $220M in notes (more than half the total deal value).
Xerox either negotiated favorable terms where a significant portion of the payment depends on future conditions or couldn’t finance the full purchase upfront.
"$400m for $750m in revenue is a little suspicious."
It's very suspicious. A $750 million company selling for 6 months revenue means the debt is higher than the yearly profit. If the company was doing well, it would sell for a positive multiple; 1X, 2X, 5X, not half-X.
I'm pretty sure that $220 million promissory note is paying off the lenders that helped the PE firm buy ITsavvy in 2022.
The 2022 sale is believed to be about ~416 million, mostly with debt. Then they bought 3-4 more bolt on companies with mostly debt saddled on ITsavvy.
PE firms usually put ~20% down on a purchase, so whatever the remainder is, was lumped on the ITsavvy books, along with the other compnay purchases, and sold to XRX.
itsavvy makes almost no mney in IT
$400m for $750m in revenue is a little suspicious. Sellers accepting $220 in promissory note is also odd. I wonder how subordinated the notes are?
"I'm wondering how much money ITsavvy is bringing in for that $400 million price tag. I guess we'll find out soon."
Well... For the low, low price of $400 million paid for ITSavvy, we secured an astonishing $1.05 million in net profit.
Who wouldn't like 379 years to get a full return on their investment?
I'm wondering how much money ITsavvy is bringing in for that $400 million price tag. I guess we'll find out soon.
14h ago by Anonymous
6 reactions (+6/-0)
Post ID: @aw+1jnny6hrt
It will completely depend on if it is allowed to operate as an independent entity and run itself (as is the current plan).
The temptation to meddle, because XRX always "knows best" may be too much. If it is XBS'd, or ACS'd, it will circle the drain, too.
When anyone uses the word “headwinds” in the context of Xerox, the immediate response is to sing them off podium with the Meow Mix jingle.
I'm wondering how much money ITsavvy is bringing in for that $400 million price tag. I guess we'll find out soon.
Kodk stock STILL higher than xrx! Just think of how amazing Kodak would be doing if they had Xerox’s reinvention people...
This may be the end? Headwinds? Stacked cards? You know things are bad when the 100 more years people start doubting... remaining employees and lean six sigma belts had very little to do with this tub barely floating. Thank employees sacrificed to the divvy.
This may be the end of Xerox ..Somehow this company has managed to barely keep its head above water. A testament to its remaining employees but given the
current headwinds the cards are stacked
against success. Lack of competent leadership has plagued this company for years ..The junk they slap a logo on, the poor quality and offshore service is beyond laughable.. This once stellar company has gone from gold plated to nothing but fools gold .