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Perma-Fix Environmental Services Inc. Message Board

  • Eggplant101 Eggplant101 May 16, 2012 1:14 PM Flag

    10-Q // SEHC ugly


    You may be right about SEHC, that acquiring it may benefit the company in the long run. But: I just finished the 10-Q, and the SEHC #'s look awful. SEHC had operating income in 1Q12 of negative $1.041 million. EBITDA for the whole company in the qtr was negative $304,000. At this point, I would argue that PESI management stepped in poop with this deal, and severely overpaid.

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    • Disagree "stepping in poop." Their size has been a detriment to share price. You heard CEO say record earnings last year failed to keep stock from sinking.

      They badly need to grow and diversify (like providing kinds of "services," which they've begun pushing.) Really need another merger to get market attention.

      Glad to hear you two invested in this company and discussing. I surely thought they would have cracked $2 by now. Landing one of the contracts they're bidding on would help.

      • 1 Reply to rabbitw96
      • rabbitw96,

        1. Agreed, size matters, but there is no benefit to larger size if it does not help long term profitability.

        2. "You heard CEO say record earnings last year failed to keep stock from sinking." Well, he should know that the stock price is forward looking, and reflects the expectations for future earnings. With record earnings, how much dividend was paid out to shareholders? $0. How much (fallen) stock was repurchased by the company? $0.

        3. "Really need another merger to get market attention." What? They really need profitability and growth to earn a higher stock valuation. Market attention? What is that for? Your investment strategy depends upon the great unwashed to look at a company and then buy it regardless of valuation? I don't think that will work well in the long run.

        4. I am happy to discuss, but because I never disclose positions, you can not necessarily assume that I am invested (long or short).

        5. Landing new contracts will be helpful only if the contracts contribute to profitability.

    • respect your view. but the numbers you cite are off a pretty substantial revenue base. A small amount of cost cutting (headcount, redundancies, etc.) would turn them positive pretty quickly. It's still early days post acquisition. Given the cost of debt and only the 1MM shares of PESI that the former management of SEHC purchased at $1.23/sh. in selling SEHC to PESI, I think they got SEHC at a good price. As they say, that's what makes a market.

      If you are a trader, the numbers were a little disappointing in Q1. Some stocks I trade, but not this one. The management made a mistake IMO in not lowering revenue guidance for 2012 from $160MM, or at least providing a range incorporating a lower number as a possibility. So, the stock market has done that for them. But I do not own the stock for 2012, or even the first half of 2013. I do understand the frustration of holders who have been in this a long time.

      The bigger issue is obviously the timing and amount of DOE funding for project clean-ups.

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