OK - it took a while and after seeing "interim" in more places than just about any other company I've ever invested in - it's official - AL is going permament No doubt he has right sized the business and that at some point revenues will need to grow. However, as another poster pointed out, we don't always need high revenues to make money - there is a bunch of lower priced stuff that is quite profitable. I would look for AL to step up and buy shares in the open market. This is a man driven to show that his management techniques work. Done it several times before - HPOL is near and dear to his heart as he was there with TOTL being sold and came on as COO in a former life. No to say this will be a straight line up, we are moving in a very positive direction!
The cost structure at HPOL may be part of the problem - but the real issue is the company has been in organic decline for about 10 years, the decline was masked by acquisitions. In 2006, the first year without an acquisition, they showed an organic decline of 10%. In 2008 they bought 3 companies, and still showed an overall decline in revenue.
Has there been a quarter since they dumped the call centers (2002 or 2003) when organic growth hasn’t slowed? Wasn’t Al there at the start of the decline?
You must be kidding. At this point, the company is going on 10 years without a CEO who understands the business. At least during most of that time there were others in senior leadership who understood the business, but that hasn't been the case for 2+ years now. The best you can hope for is a hail mary sale to some unknowledgeable buyer willing to pay too much for dubious assets -- assuming he is able to negotiate that before the rest of the little talent the firm has left joins the ranks of the others that have already bailed out.
I think you need to take a read of Al's book.. It's thoughtful and his record is pretty clearly in the public domain and it's good.. I have long said that Al would right size this business quickly and get it in far better shape financially than it has been in some time. The challenge, and it remains today as it has in the past, is to be able to sell new services (i.e. the viability and sustainability of the value proposition) that is it plain and simple.. The share repurchase and guidance just show that he is starting to feel a bit more comfortable where things are at - with 1M shares in his back pocket - I don't think $1 per share will suffice..