They really need to get someone else to handle their archived conference calls. I am having the same problems getting access to it as last quarter. Hopefully they will get it fixed soon.
Well, I wrote another long one and don't know where it went. But I mentioned an interview format in the 2001 annual report and Moquist indicated that he needed to become better at communications with the investment community. I'd say he has accomplished that in spades. It was in conjunction with the note that our PE was around 10 at the time.
Guess my post will show up eventually, but I want to be sure your Starlink, Inc. acquisition from Austin TX was reported. And something else I reviewed which was an acquisition several years ago was the scientific balloon portion of Aerostar. Another Texas company in Sulphur Springs and that one is still active.
Some day I'll figure out how to use this new Yahoo format to my advantage.
I suppose Flow Controls is the division that I was least impressed by last quarter. Clearly they sent out a product which was not completely ready and paid for it. They talked about several products but the others were primarily incremental improvements on the same basic product. Since I was never closely involved in farming, I never gave boom control and management much thought, but the more I consider what is going on as that thing covers huge amounts of land at high speed spreading fertilizer, pesticide, herbicide or perhaps some other product, it becomes quite and interesting engineering feat to manage all of the interrelated functions correctly. Computer control and GPS wireless comms must be dependible. And every nozzle and mechanical joint needs to be as trouble free as possible. Lot's of room for talented engineers and creative inventors.
What function did they announce was being brought into Sioux Falls exclusively? GPS electronics? If that was it and I don't see the answer in my notes though I remember thinking that whatever it was would be going into the Electronic Systems division to be built--then we can probably guess that the company purchased for it's skills with GPS did not turn out to fit completely perfectly. Perhaps employees have left or perhaps they dropped the ball which is what caused the unperformance of "DMU function" which required so much repair and retraining. In fact, as I think about it, I suspect this will turn out to be another problem which was unmentioned but illustrates why Moquist is hesitant about big acquisitions. In the time I've followed the company I've not seen most of them work out real well. But then I also have a bias toward organic growth and against acquisitions beyond simple bolt on ones. The people always make them too complicated. Incidentally, Ron was very explicit in this call saying that they saw nothing which in any way interested them as far as a potential acquisition this quarter.
But he likes what he has. And so do I. Including Aerostar. To me trying to buy someone else's company is much like buying a used car. There are things wrong with it that the owners know far better than any potential acquirees. So I always seem to prefer trying to modify what I'm already familiar with rather than trying something entirely new. Even more than myself, I prefer that managers in companies I invest in not take those kinds of chances. In fact, I'd probably prefer that they send Aerostar off in a whole new business than try to buy a whole new business which is out there for sale.
I listened around 6:30 pm, Steve. Note: in Yahoo, if you get a quote for just one company, e.g. RAVEN, then there will be a link to the CC right there, and it was still around about 6:30, or did you try that?
Yes, that was the Starlink Inc. of Austin TX which folded into Flow Controls. Happened in 2001 and is reported in their 2002 annual report.
As I think about the various acquisitions over the years--most have disappeared into the infrastructure of Raven, haven't they? The first I heard about and remember was an Australian company which had a technology to control depth of insertion for various products and I've not heard of that in years. Probably incorporated in some products at Flow Controls and not worth mentioning any more.
Then we had the acquisition of another electronics services company also in 2001 in St Louis and that was moved into the Electronics facility Raven has in ST Louis.
We had the written off acquisition of those two students at Wisconsin--can't remember what that was about even.
And the boom elevation controller by that fellow in Saskatchewan which is still being mentioned.
I may have forgotten some of them. I would like to hear Ron review what has happened with each of these and whether they were worthwhile investments.
Oh, now I think of some of the earlier acquisitions like Glasstite which was bought and then resold in the shrink, fix, grow period. Apparently not a good deal--factory on the west coast somewhere around Portland as I recall.
The 2001 annual report has an interview with Moquist format in which he clearly states his vision for the company. And there is a little table which shows the 3 year goals (15% EPS growth) and what the past 5 years averaged on ROI, ROS, EPS, and another I don't recall right now. It was apparent in that year that there were a lot of things which could be improved. Yet I have to say that I did not see nearly as many as have been brought to pass.
An extraordinary period of strengthening and focussing which has resulted in huge returns for us. Oh, I remember that one of the figures given was that there was a PE of 10 for the stock which Ron suggested was too low if they could perform as he hoped. How long has it been since we've heard from anyone who would think 10 a reasonable PE or even possible.
I almost gave up on listening to the call after trying your suggestion, Algo. I could easily find the VCall set up bar but nothing further happened to initiate the sound. I finally found a way to the VCall site and looked up Raven there. Then it asked me whether I preferred RealNetworks or MS and upon choosing I could listen.
This was an even better call than usual. Long with exceptionally good questions from the participants and good clear answers. I thought Mr Moquist was a bit off his pace with thinking not quite as crisp as he usually displays, but both Tom and Dan handled questions for which they had primary responsibility deftly and with confidence. Both sound like people who are able to manage Raven when Ron retires. And I have personally spoken with Jim Groninger and know he is smart and sharp on a one to one basis. Also I know that his division is the one which has been performing especially well of late with huge increases in sales, employees, and equipment. Whether he is just so busy that he can't take time for CC's, or does not feel as comfortable as the others doing it, I don't know. I have trouble thinking on my feet and especially when trying to follow the lead of bosses, so I'd prefer not to be right out in front if I were in Jim's shoes and I suspect that might be part of the reason. He could probably handle the CEO job also if necessary, but perhaps would not be interested.
Like the division managers, the company analysts seem to be developing into more and more valuable players in the communications between the managers and shareholders. I was pleased by the easy probing way each of them questioned parts of the raven story. A few quarters ago we hardly got any questions. But then part of it may be that the results are not so extraordinarily good now and each needs more info to feed those who pay him. Every question was answered well and in only one case did Ron decline to answer on the grounds that he did not wish to give information on their plans for new EF customers and offerings to the competions. It was interesting to me to hear him acknowledge that competitors did listen in on these calls. I guess he was a little bit evasive on the half million dollar upgrade which Flow controls offered. I heard Dan say something like one function within the GPS utilizing portion of the steering systems did not work as well as promised to customers using the letters DMU I thought, but what a DMU is I have no idea. Some sort of unit I suppose. In a later question, Ron alluded to a couple of parts of the steering equipment involved and said that the light bar and sections which included an antenna for GPS funtions was involved and upgraded in the field when it did not perform as well as predicted. My guess is that either the sub decimeter accuracy (4 inches or so) or perhaps the response time of steerage were not as good as predicted and so new algorithms were developed and installed in sold units.
I was still having problems with it from the Yahoo link, but was able to listen through this link at InvestorCalendar.com
Overall, I still like what I hear from management. May try to add a few more shares next week. I have bought this at several different levels over the last couple years.