- Prescience Point believes that CGI's struggles to secure lenders for its proposed credit facility are in part the result of its 1) ongoing financial restatement issues, 2) recent disclosure of an active formal SEC investigation, and 3) recent disclosures which suggest continued deterioration in operating performance in the 3+ quarters since it last reported earnings.
- CGI has been selling off divisions to stay afloat in the short term; however, we expect these asset dispositions will greatly pressure the company's revenue and profitability going forward. For example, CGI recently sold its Quality division, a business which accounted for $12.8m of annualized operating profit in Q2'17.
- Recent evidence in our view confirms that CGI's tangible book value as of Q2'17 is significantly impaired. CGI's joint venture partner Element Fleet Management has written down the value of their JV on its balance sheet by 49% over the past three quarters; and, BKD is currently reassessing the accounting of around 11,000 pieces of equipment currently or previously owned by CGI. Both data points indicate that CGI's last-reported TBV is significantly overstated.
- Prescience Point is the research publication arm of Prescience Investment Group, a firm registered with FINRA
BATON ROUGE, La., Dec. 21, 2017 /PRNewswire/ -- Prescience Point, a forensic research firm, has published a follow-up report on Celadon Group CGI, an Indianapolis-based truckload freight transportation provider. In this report, Prescience Point presents additional information which supports the conclusions presented in our prior reports on Celadon, many of which have already been confirmed by company announcements and audit withdrawals. Celadon's stock price has recently increased >300% since the installation of a new senior management team, despite evidence of deteriorating fundamentals. Prescience Point believes Celadon is a poorly understood company burdened by an overleveraged balance sheet, and that shareholders are failing to consider the significant risk of an imminent debt restructuring.
Read our complete report at http://presci.us/CGI-3
Prescience Point has a short position in Celadon and stands to benefit if its share price falls.
About Prescience Point
Prescience Point, LLC (www.presciencepoint.com) conducts forensic financial research to uncover companies misleading or defrauding investors. The firm's research process incorporates partnering with leading hedge funds, private investigators, accountants, lawyers and industry experts. Prescience Point is an investor activist that communicates its findings to regulators, shareholders, and other public constituents.
Prescience Investment Group (www.presciencefunds.com) is a value oriented, special situations investment manager.
Prescience Investment Group, LLC is a member of the Financial Industry Regulatory Authority, CRD number 152721.
View original content:http://www.prnewswire.com/news-releases/prescience-point-issues-a-negative-follow-up-report-on-celadon-group-nyse-cgi-300574455.html
SOURCE Prescience Point, LLC
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