The Deep Value Week – 2025/20
New Reports, Business Updates and Increased Dividend
Companies mentioned:
· Alico (ALCO) - Reports Major Strategic Shift with Deep Citrus Write-Down and Pivot to Land Development
· Flexible Solutions (FSI) - Reports Q1 Loss, Reaffirms 2025 Growth Strategy with Food Expansion and Panama Plant
· FONAR (FONR) - Reports Strong Q3 Net Income Growth Despite Lower Operating Profit for YTD FY2025
· Hurco Companies (HURC) – “A Classic Net-net”
· NACCO Industries (NC) - Increases Dividend by 11% Amid Confident Outlook for 2025
· Natural Alternatives International (NAII) - Reports Continued Losses Despite Sales Growth in Q3 FY2025
· Tandy Leather Factory (TLF) - Reports Q1 2025 Results with Stable Operations Amid Strategic Transition
· FutureFuel Corp (FF) - Reports Q1 2025 loss following strategic production halt
“Graham’s Geiger counter”
Benjamin Graham suggested that one way to measure the valuation of the overall market was to assess the number of net-nets available. When many such opportunities exist, it indicates a cheap market overall, while their absence suggests that the market is expensive. Today’s net-nets, however, are not the same as Graham’s net-nets. Many are un-investable being Chinese RTO’s, loss-making biopharma’s etc. But we do think it is interesting to follow this number over time, and what percentage of total listed stocks qualify as a “naked” net-net without any type of quality adjustments to make them investable. Below is a net-net screen from Stockopedia.
Alico (ALCO) - Reports Major Strategic Shift with Deep Citrus Write-Down and Pivot to Land Development
P/TB 1.86 │ URL
On May 13, 2025, Alico, Inc. reported a net loss of $111.4 million for Q2 FY2025, primarily due to a $119 million non-cash depreciation and asset impairment linked to its decision to wind down citrus operations. Total revenue for the quarter was $18.0 million, nearly flat year-over-year. Adjusted EBITDA reached $12.7 million, reversing a negative figure in the prior year. As part of its strategic transformation into a diversified land company, Alico raised its FY2025 land sales outlook to over $50 million and now expects $20 million in Adjusted EBITDA, $25 million in year-end cash, and $60 million in net debt. The company maintains robust liquidity with $14.7 million in cash and $88.5 million in available credit. Additionally, Alico advanced its real estate plans with the Corkscrew Grove Villages project and continues to engage in major land conservation efforts. Despite financial progress, business risks remain tied to execution of land sales, permitting, and the shift away from its traditional citrus operations.
Flexible Solutions (FSI) - Reports Q1 Loss, Reaffirms 2025 Growth Strategy with Food Expansion and Panama Plant
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On May 15, 2025, Flexible Solutions International reported Q1 2025 revenue of $7.47 million, down 19% year-over-year, and a net loss of $278 thousand or ($0.02) per share, compared to a $457 thousand profit in Q1 2024. The decline was attributed to customer inventory adjustments, lower ENP division sales, and higher costs, including those related to capital expenditures for a new food-grade product line and the Panama production facility. Non-GAAP operating cash flow dropped to $480 thousand from $1.38 million the year before. Management expects recovery in Q2 and forecasts potential revenue growth starting Q4 from food and international operations. No new equity or debt financing is planned, and existing cash and credit lines are deemed sufficient. The company also confirmed plans to scale its Panama plant in 2025 and pursue up to $30m in annual revenue from new food contracts by 2026.
FONAR (FONR) - Reports Strong Q3 Net Income Growth Despite Lower Operating Profit for YTD FY2025
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FONAR Corporation reported Q3 FY2025 financial results with net income up 24% year-over-year to $3.1 million, driven by higher MRI scan volumes. Diluted EPS rose 37% to $0.37. Quarterly revenue increased 6% to $27.2 million, while income from operations declined 2% to $3.66 million. For the nine-month period, revenue was flat at $77.1 million, and net income fell 25% to $9.3 million. Cash flow from operations for the nine-month period was $7.0 million, down from $9.5 million. FONAR’s MRI management subsidiary, HMCA, now oversees 44 scanners and set scan volume records this quarter. Cash and equivalents stood at $54.4 million, and net book value per share rose 5% to $25.98. Management reaffirmed growth via new MRI installations and a continued stock repurchase plan ($6.1m of $9m authorized completed).
Hurco Companies (HURC) – “A Classic Net-net”
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Franco Gianotti published a write-up on the company.
NACCO Industries (NC) - Increases Dividend by 11% Amid Confident Outlook for 2025
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NACCO Industries, Inc. (NYSE: NC) announced on May 15, 2025, that its Board of Directors approved an 11% increase in its regular quarterly cash dividend, raising it from 22.75 cents to 25.25 cents per share. The dividend, payable on both Class A and Class B shares, will be distributed on June 16, 2025 to shareholders of record as of May 30, 2025. This adjustment lifts the annual dividend rate to $1.01 per share, continuing NACCO’s pattern of annual dividend hikes for the seventh consecutive year since its 2017 spin-off of Hamilton Beach Brands. President and CEO J.C. Butler emphasized the company’s optimism regarding 2025, citing expected profits from long-term projects, supportive market conditions, and favorable positioning across NACCO’s natural resources operations. The company has distributed quarterly cash dividends since 1956.
Natural Alternatives International (NAII) - Reports Continued Losses Despite Sales Growth in Q3 FY2025
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Natural Alternatives International, Inc. (Nasdaq: NAII), a U.S.-based manufacturer of customized nutritional supplements, reported a Q3 FY2025 net loss of $2.2 million or $0.37 per diluted share, despite a 14% year-on-year increase in net sales to $28.8 million. The topline growth was driven primarily by a 20% increase in private-label contract manufacturing, reaching $27.1 million due to higher demand from both existing and new customers. However, revenue from CarnoSyn® beta-alanine royalties and materials declined 36% to $1.7 million, contributing to the negative result. Year-to-date (nine months ended March 31), the company recorded a net loss of $6.4 million on sales of $96.0 million, up 14% versus the prior-year period. Loss drivers included underutilized production capacity, reduced CarnoSyn® licensing revenues, and increased SG&A and legal expenses. Gross margin remained low at 6.3% for the quarter. Management noted macroeconomic headwinds such as FX, labor, and freight costs, but expressed optimism for future profitability aided by growth in new product offerings like TriBsyn™. As of March 31, 2025, NAI reported $10.6 million in cash, $35.2 million in working capital, and $2.0 million drawn on its $8.5 million credit facility. Despite an expected full-year loss for FY2025, the company maintains a positive sales outlook for Q4.
Tandy Leather Factory (TLF) - Reports Q1 2025 Results with Stable Operations Amid Strategic Transition
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Tandy Leather Factory, Inc. (Nasdaq: TLF) reported Q1 2025 revenues of $19.0 million, a slight 1.2% decline versus Q1 2024. Operating income and net income from operations both totaled $0.3 million, down from $0.7 million the prior year. Gross margin edged slightly lower to 56.3% (vs. 56.7%), while operating expenses rose 1.8% to $10.5 million. Adjusted net income reached $0.4 million, and adjusted EBITDA came in at $0.6 million. The company ended the quarter with $23.6 million in cash, significantly up from $12.3 million a year earlier, mainly due to the January 2025 sale of its corporate HQ. The quarter included a special dividend of $1.50 per share. CEO Johan Hedberg noted that the company expects higher costs and potential operating losses for FY2025 due to the upcoming HQ relocation and potential tariff impacts on its mostly imported product base, which may force price increases and hurt margins. Despite these headwinds, management was pleased with Q1 performance exceeding internal expectations.
FutureFuel Corp (FF) - Reports Q1 2025 loss following strategic production halt
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FutureFuel Corp. (NYSE: FF) reported a net loss of $17.6 m, or $0.40 per share, for Q1 2025 compared to a profit of $4.3 m the year before. Revenues fell sharply by 70% to $17.5 m (vs. $58.3 m), largely due to an extended maintenance shutdown at the company’s biodiesel and chemical production facilities. Adjusted EBITDA came in at –$16.1 m (vs. +$7.1 m). Biofuel sales volumes declined by $29.9 m and chemical volumes by $7.9 m, further impacted by weather disruptions. Despite the weak quarter, management emphasized the restart of production in March and reaffirmed confidence in long-term profitability, supported by flexible feedstock capabilities, an upcoming capacity expansion in late summer 2025, and engagement with industry groups on policy clarity around the new 45Z tax credit. The company ended the quarter with $97.1 m in cash (vs. $109.5 m at year-end 2024) and maintained a quarterly dividend of $0.06 per share.
The writer may own shares of the companies mentioned. This communication is for informational purposes only. AI helped us with this. Check important info.