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Food Technology Service, AŞ Message Board

  • eagledragon1 eagledragon1 Mar 29, 2013 12:18 PM Flag

    2012 Earnings


    Food Technology Service, Inc. (VIFL) had record revenue of $3,958,629 in 2012 which is a 5.7 percent increase over 2011 revenue of $3,744,546. Net income increased 1.8 percent $925,943 in 2012 compared to $909,502 in 2011. Earnings per share of $0.328 were unchanged between 2011 and 2012. Revenue for the fourth quarter was relatively constant at approximately $962,000 in 2012 and 2011.

    Food Technology Service, Inc. CEO Dr. Richard Hunter said: “This year again marks a revenue record for the Company and we continue to have significant cash reserves and no long term debt. I am especially pleased with the growth in stockholder equity which increased by over $1 million in 2012,” said Hunter.

    Still a cash cow, but needs to grow business. More than enough room Rick.

    Sentiment: Strong Buy

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    • It's a good cash cow. The cash flow is fine. They need to grow the top line, expand capacity utilization, to leverage EPS. If they cannot do that both sequentially and y-o-y, they need to return at least some cash to shareholders.

    • more palatable to say you are pleased w/the growth in stockholders' equity which increased by over $1 million in 2012, than to say you are pleased by "achieving" flat earnings per share (or net income of a bit under $1 million in 2012)--but it's basically the same thing. I guess you have to say something spinned positive.Then again i suppose you cannot say you were pleased making a timely exit on all your shares held at the time in late September at $6.50, just prior to a disappointing third quarter ending.

    • What we have here is a failure to communicate (to quote Strother Martin in Cool Hand Luke). The 10K is out and it looks like both pretax and operating income declined year-over-year, if only marginally. IMO you have either ineffective or unmotivated management , which also barely communicates w/shareholders to keep them duly informed beyond the minimum SEC filing requirements. There is no guidance or outlook given for 2013. There is no color provided for the year-over-year drop in net income in the fourth quarter of 2012. There is no mention as to whether the capital improvement program (i.e., replacement of the Programmable Logic Control system) has been completed, and whether, or how much, it affected (i.e. downtime) 4Q or full year results. There is no mention of how free cash flow will be allocated in 2013, if indeed the capital improvement has been completed. There is no discussion of why food irradiation only accounted for 6% of revenues in 2012, despite continuing lip service paid annually to expected future growth in that area. What management and directors are motivated by apparently, and IMO, is the exercise of its stock options and subsequent sale of stock to lock in significant personal gains sometimes in the open market and sometimes in privately negotiated transactions, and sometimes right before the end of a disappointing quarterly result. So you have to ask yourself three relevant questions 1. Do you trust management to effectively grow the company (its capacity utilization, customer breadth and earnings), placing the enhancement of shareholder value as its first priority? 2. Do you trust the BOD? 3. Do you trust FA?

      • 2 Replies to roboklerk
      • Robo, I have enjoyed reading through your historical comments, though recent comments involving conspiracies seem unproductive. Valuation is based upon earning capability and growth. VIFL is a small company with flat earnings and significant excess capacity. It is a solid small business with significant constraints on growth in a competitive field that requires significant capital investment. The CEO has done a good job of returning the business to profitability and should be appreciated. Building the business will increase costs in the short-term with no guarantee of additional sales. It has limited management depth (CEO/CFO same person), thus costs are understated.

        Have you spoken with the CEO, the board, or anyone at FA? Last year, the company was unable to get quorum and thus the board is not elected, but remains from the prior period. Regarding FA voting, they can't vote all shares in VIFL because of the Florida statute for share purchases over 20.00%. The Company is obligated to support extended voting rights at the next shareholder meeting as part of the purchase of the CEO's shares. Why would FA take any action until that issue is addressed at the shareholder meeting? Show up at the shareholder meeting, talk to the parties. You are insightful and can provide good feedback to everyone involved. I look forward to reading more.

        Sentiment: Hold

      • Eagle, it is one thing for management not to want to be overly promotional--but these guys offer you nothing. They have a thinnest 10K I have ever read, citing little more than percentage change statistics you or I could easily calculate by ourselves. Forget about a CC, or Investors Day---when was the last time you even saw a PR from them? It as almost as if they want this company's story to go unnoticed and be kept on the "down-low". If they want to run it like a private company, then they should take it private.