There are legitimate ideas, questions, and concerns that I know a number of shareholders here have expressed. I also know there may be very few that can/will show up at the shareholders meeting. I would like to compose and send to Dr. Hunter, a letter that addresses these issues in the hopes that we can receive insight on these matters during or after this meeting. I will start off with my list and would really appreciate current shareholder participation.
1. Utilization - How much more utilization is actually available without significant capital expansion? The irradiation system basically feeds product through at a constant speed. So is the system below capacity during normal business hours? Does increasing utilization equate to additional shifts? I would sincerely appreciate better defining our current capacities.
2. Marketing - Is there any active marketing to potential regional business? Is there a business plan in place to keep growing utilization, earnings, and footprint? How can we update the company website to offer a little more professional business format? How can we better expose the company to the market through avenues such as more press releases or equipment/facility updates?
3. Guidance - There is no current future guidance. What can be offered?
I'll start with that. Please contribute. When we get a good consensus I'll compose the final letter and mail it to Dr. Hunter personally. Since the shareholder meeting is May 17, I intend to have this in the mailbox no later than May 1. Please, no animosities. Thanks all.
thx. for the effort. 1. At the current quarterly run rate of cash flow from operations, VIFL could generate about $3 million annually. If capital expenditures run roughly $1 million per year primarily for purchase of Cobalt, that would leave about $2 million annually of free cash flow. Rather than simply let that cash sit on the Balance Sheet why not pay out a dividend to shareholders since organic growth requirements are minimal given the large amount of excess capacity that remains unused? 2. What are the two or three strategic planks in the business plan to address growth and increase the customer base going forward? 3. Why are you advocating restoring voting rights on the 235,500 shares to Fort Ashford and in effect ceding even greater control of the company and its strategic direction to them, and why has their intent not been communicated to shareholders ? 4. How secure is the source of Cobalt supply from Nordion as VIFL does not have a long term supply contract w/them, and Nordion has put itself on the block for possible sale. Does it make sense to execute a long term supply contract w/them like other of their customers have done? Pick whichever of the 4 you want or shorten them as you see fit.
BTW, in partial answer to your first question, the company is running in the low 30%s in terms of capacity utilization. They could about triple the current throughput (which can run 24 hours per day) w/o having to add any new fixed capacity.
I can ask concerning contemplating a dividend. There are good valid answers on both sides of that fence. On one side it makes the stock more noticeable to the market and offers a sense of consistent profitability, it produces press releases. It is a perception that is pleasing to prospective investors. In reality, if they paid out half, say .16 per year in dividends, the yield would only be about 3.2% at a 5 dollar share price. That won't have them breaking your doors down. Paying a dividend would be a dent in their net capital and would diminish the rise in book value. Personally, I would rather see the free capital (capital not expended on normal operational expenses) accumulate to the point where it could be deployed as an investment for growth. That investment could be hiring a very well connected professional field sales representative/team. A professional IR position can do wonders for internet presence, news/press releases, company promotion, and advertising. This is still a smaller company and each administrator obviously must wear several hats. This is advantageous to reduce overhead costs, however it can also become a roadblock in that there is not the proper amount of time, consideration, or specific expertise dedicated to continued expansion and refinement.
Your #2 is a lot like my #2.
#4, concerning Cobalt procurement, is a good valid question.