IEAM

[buddjas1]

2. We will update the investor presentation in June

la-onda, can you follow up with Chris on this?   

[la-onda]

IEAM: Short Interest DN 28.8% to 546.1K in Jun 2007
Tuesday , June 26, 2007 16:34ET

According to new short interest data from NASDAQ, short interest for Industrial Enterprises of America Incorporated (NasdaqSC: IEAM) DECREASED 28.8% to 546,059 shares for the month ended mid-June, 2007.

SYMBOL               MAY            JUNE        HANGE       %CHANGE      DAYS/COVER
--------   -------------   -------------   -------------  ------------  ----------
IEAM             767,191         546,059        -221,132        -28.82%           2

Based on IEAM's 20-day average daily share volume of 273,563, it would require approximately 2 day(s) of buying to cover this short interest.

no update from Chris yet 

[la-onda]

seems to be that 5$ is the support & accumulation area 

no news no IR 

still waiting

[Kublakhan]

Industrial Enterprises Provides Fourth Quarter and Year-End Update
Thursday July 12, 3:05 pm ET
Board of Directors Authorizes $25 million Increase to Share Repurchase Program

NEW YORK--(BUSINESS WIRE)--Industrial Enterprises of America, Inc. (NASDAQ: IEAM - News), a specialty automotive aftermarket supplier, today reported preliminary fiscal fourth quarter financial highlights, including positive changes in its capital structure and balance sheet.

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As expected, a majority of the Company's $4.6 million in convertible debt was converted into equity at the end of the quarter, and the Company's overall debt was reduced to less than $3 million from greater than $14 million. Additionally, the total number of warrants outstanding fell to fewer than 500,000 from 2 million. The reduction of convertible debentures and warrants outstanding significantly lowers the potential dilution going forward; however, due to the recent conversion of debt into equity, warrants exercised, and the interest and liquidated damages related to such debt paid in stock, the Company's outstanding share count has temporarily increased to approximately 19 million shares of common stock. The current share count also reflects management's near-term decision to use warrant proceeds to pay down debt instead of buy back shares. Shares outstanding does not include shares repurchased in the Company's share repurchase program, via cash or note, shares that are in the process of being cancelled and shares that have been issued but not earned, which would all be reported by the transfer agent as outstanding.

TA is reporting over 23.5 million O/S currently.

Due to the improved financial strength of the Company's balance sheet, the Board of Directors has voted to increase the existing share buyback program by $25 million dollars in order to minimize the effect of the debt conversions and to keep the share count consistent with management's prior 13-14 million share guidance. This does not include stock that may be issued as part of future acquisitions.

For the fiscal fourth quarter ended June 30, 2007, financial performance is expected to be on par with previously guided earnings estimates of $4.0 million, although such performance is always subject to auditor adjustments. However, revenues are expected to come in lower than anticipated due to a change in product mix, as previously discussed on the Company's third quarter conference call. Additionally, the Company's accounts receivable balance, which had risen sharply in the previous two quarters due to bulk sales, has been subsequently reduced by those amounts as receivables on the bulk sales have been collected. Actual financial results are expected to be reported sometime in late September.

Chief Executive Officer John Mazzuto stated, "Moving into fiscal 2008, our balance sheet is stronger than it has ever been, and the potential dilution to our stockholders has been largely eliminated due to the conversion of debt and exercise of warrants. I feel we have taken the necessary steps to position IEAM for substantial revenue growth and margin expansion going forward, providing a strong return on investment for our stakeholders. Now that our Board of Directors has authorized an increase in our share repurchase program, we will continue to purchase stock at the appropriate times."

The potential for dilution has been largely eliminated?  That's because the potential has already been realized!

They hint at good things for stockholders in the future but its been their questionable management that keeps stockholders away.  Maybe there's a good reason why this stock is "undervalued".

[la-onda]

EAM: Drops -4.57%; Vol +110%; Last 90 Min of Trading
Thursday , July 12, 2007 16:21ET

During the last 90 minutes of today's session, shares of Industrial Enterprises of America Incorporated (NasdaqSC: IEAM) demonstrated a strong DOWNWARD close relative to its 13:30 ET statistics. "Strong Closers" are determined by proprietary Knobias calculations performed during the last segment of each trading day.

sym: IEAM      @13:30 ET        @CLOSE      % CHANGE
----------   -----------   -----------  ------------
PRICE              $5.03         $4.80        -4.57%
VOLUME           398,200       835,300      +109.77%
#TRADES              477         1,254      +162.89%
DAY-HI             $5.15         $5.15           N/A
DAY-LO             $4.97         $4.77       LATE-LO



very disapppointing 

[Kublakhan]

La-onda and Buddjas1:

What's your trading plan (assuming you currently own shares)?

[la-onda]

to summ up:
Industrial Enterprises Provides Fourth Quarter and Year-End Update
Thursday , July 12, 2007 15:05ET

NEW YORK, Jul 12, 2007 (BUSINESS WIRE) -- Industrial Enterprises of America, Inc. (NASDAQ: IEAM), a specialty automotive aftermarket supplier, today reported preliminary fiscal fourth quarter financial highlights, including positive changes in its capital structure and balance sheet.

As expected, a majority of the Company's $4.6 million in convertible debt was converted into equity at the end of the quarter, and the Company's overall debt was reduced to less than $3 million from greater than $14 million.
Additionally, the total number of warrants outstanding fell to fewer than 500,000 from 2 million.
The reduction of convertible debentures and warrants outstanding significantly lowers the potential dilution going forward; however, due to the recent conversion of debt into equity, warrants exercised, and the interest and liquidated damages related to such debt paid in stock, the Company's outstanding share count has temporarily increased to approximately 19 million shares of common stock.
The current share count also reflects management's near-term decision to use warrant proceeds to pay down debt instead of buy back shares. Shares outstanding does not include shares repurchased in the Company's share repurchase program, via cash or note, shares that are in the process of being cancelled and shares that have been issued but not earned, which would all be reported by the transfer agent as outstanding.

Due to the improved financial strength of the Company's balance sheet, the Board of Directors has voted to increase the existing share buyback program by $25 million dollars in order to minimize the effect of the debt conversions and to keep the share count consistent with management's prior 13-14 million share guidance. This does not include stock that may be issued as part of future acquisitions.

For the fiscal fourth quarter ended June 30, 2007, financial performance is expected to be on par with previously guided earnings estimates of $4.0 million, although such performance is always subject to auditor adjustments. However, revenues are expected to come in lower than anticipated due to a change in product mix, as previously discussed on the Company's third quarter conference call. Additionally, the Company's accounts receivable balance, which had risen sharply in the previous two quarters due to bulk sales, has been subsequently reduced by those amounts as receivables on the bulk sales have been collected. Actual financial results are expected to be reported sometime in late September.

Chief Executive Officer John Mazzuto stated, "Moving into fiscal 2008, our balance sheet is stronger than it has ever been, and the potential dilution to our stockholders has been largely eliminated due to the conversion of debt and exercise of warrants. I feel we have taken the necessary steps to position IEAM for substantial revenue growth and margin expansion going forward, providing a strong return on investment for our stakeholders. Now that our Board of Directors has authorized an increase in our share repurchase program, we will continue to purchase stock at the appropriate times."

the marked statement is difficult to for me to get a right conclusion.
I have sold 30% of my shares two days ago, holding the other 70%.

any other comments?

cheers
Oliver

[David Randolph]

Hi there, I also saw the news yesterday and the negative market reaction.

We can see it both ways:

1) Management talks about 19 million shares outstanding now, which means a $91.2 M market cap at yesterday's closing price of $4.8. And they say "earnings" (I wonder if they mean net income, probably they do, or they would be misleading investors) for the 4th quarter will be approximately $4 M.

If we multiply this quarter by four we get to a $16 M full year earnings estimate, and that means the stock is trading at a very cheap $91.2 M/$16 M = 5.7 times forward earnings (no growth considered).

Now, what puzzles me is:

2) "As expected, a majority of the Company's $4.6 million in convertible debt was converted into equity at the end of the quarter, and the Company's overall debt was reduced to less than $3 million from greater than $14 million. Additionally, the total number of warrants outstanding fell to fewer than 500,000 from 2 million."

The share count increased from:

«As of May 18, 2007, 13,297,754 shares of the registrant's Common Stock were outstanding.» to, according to management, 19 million shares. This is a 5.7 million share count increase. If these shares were converted at say, $5, then they would result in proceeds to the company of roughly $28.5 M.

Yet debt was reduced by just $11 M. Where did the other $17.5 M go?

Are they cash now? Management says the following about the balance sheet:

«Due to the improved financial strength of the Company's balance sheet, the Board of Directors has voted to increase the existing share buyback program by $25 million dollars in order to minimize the effect of the debt conversions and to keep the share count consistent with management's prior 13-14 million share guidance.»

I guess this may very well be true.

If they buy $25 M shares at $5, the share count will be reduced by 5 million, from 19 million back down to 14 million. And they seem to have the cash to really do it.

My take is if you own IEAM, you have no reason to sell because of yesterday's news, in my personal view, which can be wrong, let's see what the market says. I'm going to stay on the sidelines because I've decided to wait for a truly bullish catalyst to buy ... I don't mind buying 20 or 30% higher, if I see more transparency and a clear way for an ascending share price. It's just that IEAM is too complicated and I don't like to look too deep to find the value. It should be more or less apparent at first sight.

Anyway, this is my view of the facts, good luck dudes

[buddjas1]

thanks for the comments.  I had to convince IEAM to issue the press release yesterday.  The transfer agent had leaked material yet non-public information yesterday about the outstanding shares.  Under such circumstances, IEAM had 24 hours to disclose publicly the information.  People were alredy trading based on that information.  I very nearly contacted the SEC. 

Regarding the statements made in the PR, I am disappointed because the CEO was caught in another lie.  He had promised in the last conference call not to let the outstanding shares exceed 13 million.  He did not mention 19 million, even temporarily.  Keep in mind that the actual oustanding shares (the transfer agent number) is higher (I cannot tell you how much higher). 

In addition, revenue growth has apparently stopped at 17 million.  A far cry from the 50 million we were promised. 

Moreover, the "income" of 4 million I assure you is EBITDA and not net income.  The derivative charges will appear in Q4 to cause the net income to be nagative again.  Just another example of the CEO being less than honest.

I could go on and on.  I would not be a buyer here.

[David Randolph]

thanks for the comments.  I had to convince IEAM to issue the press release yesterday.  The transfer agent had leaked material yet non-public information yesterday about the outstanding shares.  Under such circumstances, IEAM had 24 hours to disclose publicly the information.  People were alredy trading based on that information.  I very nearly contacted the SEC. 

Regarding the statements made in the PR, I am disappointed because the CEO was caught in another lie.  He had promised in the last conference call not to let the outstanding shares exceed 13 million.  He did not mention 19 million, even temporarily.  Keep in mind that the actual oustanding shares (the transfer agent number) is higher (I cannot tell you how much higher). 

In addition, revenue growth has apparently stopped at 17 million.  A far cry from the 50 million we were promised. 

Moreover, the "income" of 4 million I assure you is EBITDA and not net income.  The derivative charges will appear in Q4 to cause the net income to be nagative again.  Just another example of the CEO being less than honest.

I could go on and on.  I would not be a buyer here.

Well seen buddjas1, you're really on top of this one

Well, if "profits" is EBITDA and not "net income" that completely changes my analysis (and it is misleading information out of the company). And if the man has been lying ... well, that doesn't bode well for the share price.

IEAM is truly a complex story, it looks cheap, but the share count keeps rising. And that guy on CNBC crying "IEAM at $4 times earnings" ... I didn't like that, it looks like he was paid to say it on TV.

I wish I knew more, but I don't know ... anyway, there are simpler things that are very attractive outthere, I agree with you buddjas1, not the safest idea to buy now. Thanks for your valuable input, good luck.

[buddjas1]

Remember the guy (Stephen J. Massocca) on CNBC that was inaccurate and stated that IEAM traded at 4 times earnings (impossible with negative GAAP net income):

"The Order finds that PGE defrauded certain customers by secretly double-charging them for stock trades.
***The Order further finds that Massocca, 47, of  San  Francisco,  authorized PGE's unlawful conduct.
***The Commission's Order requires PGE to  undertake  certain  compliance reforms,  and  requires  PGE,  Massocca  and  Katz  to  pay  penalties of $425,000, $75,000 and $20,000,  respectively."

http://www.sec.gov/news/digest/2007/dig012307.txt

Here's a little about our beloved CEO, John Mazutto, and a prior business venture:

"Strupp and Mazutto bought the brewery from the Stroh Brewery Co. for $10.5 million in November 1999 and renamed it the City Brewery, its original name when founded by Gottlieb Heileman and John Gund back in 1858."

Less then a year later:

"Owners Jim Strupp and John Mazzuto lost control of the brewery last month after a judge found the brewery in default on a $4.5 million loan to Congress Financial Corp. and ordered a foreclosure. La Crosse attorney George Parke III took possession of the premises and oversees the operation as receiver."

http://findarticles.com/p/articles/mi_m3469/is_38_51/ai_66307255

In addition, for those with access to PACER, check out:

U.S. Bankruptcy Court
Southern District of New York (Manhattan)
Bankruptcy Petition #: 02-15586-rdd

[la-onda]

just FYI:
I have switched my money from IEAM to IMMR.

good luck, IEAM is now just on my watchlist

cheers
Oliver

[buddjas1]

just FYI:
I have switched my money from IEAM to IMMR.

good luck, IEAM is now just on my watchlist

cheers
Oliver

I cannot blame you.  I'm stuck, though.  As long as Pike and Guardian hold their shares, there is a chance for recovery. 

[brandyjoco]

"Owners Jim Strupp and John Mazzuto lost control of the brewery last month after a judge found the brewery in default on a $4.5 million loan to Congress Financial Corp. and ordered a foreclosure. La Crosse attorney George Parke III took possession of the premises and oversees the operation as receiver."

I found that the brewery was purchased from Mazzuto in 2000 by 12 investors for 9 million dollars:  http://www.redorbit.com/news/business/545001/city_brewery_owners_the_brewery_is_doing_well/index.html

Also, in 2005 Mazzuto was interviewed by the Christian Radio network.  This makes me think that he may be on the 'level' and I am not so sure that I want to believe some of the accusations that are being voiced.

I will keep researching and search for anything under the name 'Mazzuto'. I still have 3000 shares... OUCH

[buddjas1]

I found that the brewery was purchased from Mazzuto in 2000 by 12 investors for 9 million dollars:  http://www.redorbit.com/news/business/545001/city_brewery_owners_the_brewery_is_doing_well/index.html

Your article states:

"A group of 12 investors bought the company's assets from New York investors Jim Strupp and John Mazzuto in 2000. Strupp and Mazzuto bought the former G. Heileman Brewery in 1999 and renamed it City Brewery. It ran into financial trouble under Strupp and Mazzuto but became successful under the 12 investors."

So it was a good business, Mazutto just could not run it.