Good call Harley. SEC filings show that Trandem is now gone and rumour has it that Thielbar is gone as well. This new guy seems to know what he's doing.....
Greetings to my friends:
It doesn’t seem like that long ago that we sat together listening to the new CEO (Merle Lewis) explain his vision for the future of Northwestern. It was a time of “deregulation” and there were many new challenges, unknowns, and questions to be answered. But we knew that we had the very best employees and we were up to the challenge of whatever came along. However, when Art Donnell (with 25 years of Utility Management experience) was forced out and replaced by Mike Hansen, many of us began to wonder if the leadership of the company was as good as the people that actually kept the lights on. As time went on, the answer to that question became quite obvious. The last 10 years at Northwestern were probably a bit more challenging than any of us could have envisioned way back then. Even for those of us that watched from the outside, it was most traumatic. To watch a good company implode from greed and bad management is bad enough, but when you know the good people, the pain and personal financial loss that resulted, it was most difficult.
But every sunset has a sunrise. You now have a solid board of directors that is capable, experienced and involved. After 9 long years…… I am once again a stockholder in Northwestern. I believe in the future of this company because I know the people who make it work. Most of all I am please that the company now has another chance to be the great company that it once was. The new CEO is widely regarded for his experience and most importantly, for his integrity (something that has been in short supply for some time). In reality though, he really can’t make Northwestern a great company again. Only YOU can.
Seize this opportunity. Ask yourself “What can I do to make this a great company?” Then, go to work tomorrow and take back what was stolen from you. Wherever I am, there will always still be a part of Northwestern in me. My prayers will always be with you.
What you say is quite true..... if you call burying it deep in the notes of the 10K "explicit". It would be illegal if it wern't included there, and I cerainly wouldn't want to imply any ilegality. But.... what about the common stock holders who depend mainly on trust in the management to tell them what's going on? I doubt that many of them study the notes of the 10K. No doubt, many wouldn't even know where to find one. Correct me if I'm wrong (as I'm sure you will) but I don't recall hearing anthing about this being a one time event during any of the quarterly reports or quarterly financials last year. If you can show me wrong on this, you will hear no more from me on this issue.
Not sure that the management is playing square with the stock holders here. In 2007 there was little or no identification of the 1.9 million of revenue being a one time event. For all intents and purposes the $1.9 million one time windfall was reperesented as recurring revenue and used to pump up the stock and the management. Now that the bar has been set and things don't compare well with 2007, we hear nothing but how this was a one time event. This is the kind of reporting that causes me to lose faith in the management of a company. What else are they not telling us? Can someone tell me why I would want to invest more money in this company? All I can see is a continued spiral downward.
But that's just my opinion, of course.
Looks like Bart Thielbar is history. That will not come as big dissapointment to many current and former employees, certainly not to me. As I read the SEC complaint and the resulting settlements, I can't help but ponder a few questions:
If an internal audit turned up the fictious contracts, innaproprite good will transfers, and attempted cover up, why wasn't everyone involved immediately fired? One would think that Mike Hanson would be aware of the details of an internal audit. This is a serious question, as some of the possible answers are most disturbing.
Northwestern Communications was a wholly owned subsidiary of Northwestern Corporation. Therefore Northwestern Corporation's income statement would benefit directly from these transactions. Maybe I am seeing conspiracy where it isn't, but it is hard for me to believe that Bart was acting alone. Keep in mind that while acting as the head of the Northwestern Communications Solutions Subsidiary he was (I believe) also a direct employee and officer of Northwestern Corporation. But, even if he was acting alone, wouldn't that imply gross incompetence on the part of Northwestern Corporation's management and a direct and prosecutable violation of the Sarbanes Oxly Act? My understanding of SOX is that were talking about potential prison time for the CEO (Mike Hanson) even if he was unaware of the illegal activity.
Of course, these are just my opinions, but it does raise some interesting questions....... I would be very interested what others might have to say.
I just dropped in to see what is happening too. Will this compnay ever recover from the mess that Merle and Dick left? My condolences to the employees.... my regards to old friends.
Sorry about the late response, but.... I get daily historic data from Scottrade using the symbol "NTHWQ.PK". Hope this helps. Best to all.
A while back Northwestern had a statement on it's website that went into great detail on how the Corporation was setting high ethical standards for all Northwestern employees. It disappeared about a year ago (I think). I am currently taking an MBA course in Business Ethics (Oxymoron?) and would really appreciate if someone has a copy that they could share. I think it would be a good study on the value of such statements and make for a good classroom discussion. Thanks.
Gotta agree about insolvency being the main issue here. However, I would suggest that in reality, they have been insolvent for over two years, mostly because they paid way too much for ALL of their investments. But.... they have been covering it up with inflated goodwill on the balance sheet and illusionary minority interests on the revenue statements. They have been borrowing on the future with everything they had (including utility assets) to provide cash flow. Unfortunately, nothing is left. At this point, I will join the others who believe that BK is enevitable and will occur before year end. There is just nothing left here to work with. This company already belongs to the creditors. The stockholders are irrelevent.
Just my opinion, of course.
Even though you could read a lot into the INACTION of the South Dakota PUC, I have no reason to question their Integrity. But.... I have said it before and I will say it again. The South Dakota PUC is either gutless or brain dead. Based on the information publicly available, it is quite clear to anyone with a miniscule understanding of regulated monoplies that Northwestern's utility rate base has been declining and they would be unable justify their current rates. All of the South Dakota (and probably Montana) customers are paying more than the law actually allows Northwestern to charge. Over the last 4 years Mike Hansen has reduced capital spending (thus the decling rate base) to a point that now this company's cash cow could be killed off with the stroke of a pen. Ahh...... Yet another example of his brilliant management ability. Behold and learn how you get promoted to COO. Unfortunately for Mike, the Montana PUC is real. Gary.... time to wake up and smell the roses.
A reverse rate case should have been initiated years ago by the South Dakota PUC. If they were really representing the people who elected them, this would certainly have happened a long time ago.
About a year ago I picked up a few "reliable rumors" that some of the PUC staff were informally collecting information to initiate a reverse case. Would be interesting to know what happened. But I have to agree with Arrows.... nothing will happen.
Just my opinion, of course.
Barry.... perhaps you are correct. However, there is a difference between prudently securing a future supply and essentially doing nothing. My understanding is that NOR got rid of the people that knew how to do this, and then (necessarily) chose to do nothing. There are ways to leverage and hedge when buying any comodity just as you should be doing when you invest in equities. I'm sure Haveseenitall would be happy to explain it to you. I see this as very poor decisions on the part of the utility management team. In most companies you would get fired for such gross stupidity. But in this case you get paid $900,000 per year and will probably get a raise. Drook had better be paying attention to what I just said if he has any chance of using the utility to save this company. What we really need here is a new mangement team, top to bottom. I see a good start on the house cleaning.... but there is still a ways to go.
Just my opinion, of course
I think you may have misunderstood my comments. I agree with you that the decisions made by the new management make a lot of sense. I have no disagreement with the current direction of the new management, that is why you havn't seen me posting lately. My comment on integrity was meant as a complement to Drook. I am starting to believe that he does have the integrity, which has been sadly lacking at NOR in the past. This is absolutely essential if this company is to survive. I believe I am on record as stating that I don't think that bankrupty is enevitable....... just probable. Quite honestly, I don't think Drook knows for sure. That is why I postulated that the pension buyout may be offered...... "just in case". Not fair on the wishfull thinking allegation. I wish very much for this company to suceed...... always have. What you have perhaps understood in the past to be bashing, was my honest (and admittedly futile) attempt to get NOR's management (Merle and Dick were known to read this message board) to realize that they were not fooling everyone, and to make the difficult decisions before it was too late. Their lies and misrepresentations did tend to make me a bit emotional (pissed off?), but I don't think anyone can accuse me of being spiteful or mean spirited. Now, go back and reread my post...... it may read differently.
Just my opinion, of course.
Why would they pay out cash now (that they don't have) to reduce a future liability that would probably go away in a bankruptcy filing? I can't see the benefit to NOR for such a buyout. The only reason that I can see is that they may be trying to pay some of the cash (that they owe) to the employees in case everything comes crashing down. This would be a radical departure from past practices. The interests of the employees have always come last under Merle and Dick. Do I see some integrity starting to creep in here?
Just my opinion, of course.
<I am curious, do you think NOR has any chance of avoiding bk? There are alot of good people still at NOR, who have put in many years of hard work. I hate to see them all get burned. I know you have seen through the smoke for several years and you know the fundamentals well.>
Thank you for the kind words. Honestely, after NOR dropped below $5, I decided that this was no longer a stock that I would consider investing in, and I haven't been spending the time to study NOR's current position in detail. There are some very smart people posting now who are doing a great job of making the financials as transparrent as possible for the investors. But for what it's worth..... my opinion:
1. NOR will stave off bankrupcy until it runs out of cash. When you can't pay the bills, you have no choice. When / if this happens will depend on how much CASH is used to clean up the mess after Conerstone, Blue Dot and Expanets are gone. I don't think anyone really knows how bad this will be until it is all over. Personally, I am not optimistic. There was a lot of borrowing on the future that occured in order to float this company for the last three years. No doubt, there are lots of hidden liabilities stuffed in the cracks. I for one, will not underestimate AA's ability to cleverly hide losses in future contractual liabilities.
2. Utility revenues (read: cash flow) are not even. For NOR, the primary revenue months are in the winter. The spring and fall barely generate enough cash to cover utility operating expenses. These revenues generally lag the season by 1 to 2 months. The answer to the question of steady state cash inflow / outflow stability should be obvious by this fall. Raising utiltiy rates IS NOT an option (see previous posts). I doubt that anyone will loan them operating cash if they can't demonstrate the ability to generate consistant positive cash flow (after interest payments). Failure to do so would trigger BK.
3. If the brain dead South Dakota PUC ever wakes up, they might reduce the rates for SD customers up to 25% comensurate with the declining rate base. This would almost certainly trigger BK.
Bottom line....... BK very likely...... but not enevitable at this time. I don't see enough real information to make the call. For the employees, there will be business as usual, regardless of the financial condition of the company. The lights will not be allowed to go out. Of course, since demonstrating positive steady state cash flow is essential to survival, there will be considerable pressure to further reduce expenses. I suppose in the enlightened view of Mike Hansen this means that more people will go out the door. I believe that the Montana people were prommised 2 years without layloffs. As soon as that time expires...... I think there will be massive layoffs in Montana similiar what happened in SD two years ago. I feel real bad for those poor people. Not a lot of good jobs in those parts. For those of you in Montana reading this, please make contingency plans now. This company has been sucked dry. The best scenario that I can see is a cash poor, low growth, utility that will need to cut every corner to survive for the forseeeble future. For those employees that can..... get out now. There is just no future here.
Just my opinion, of course
Harley is telling it straight. He has been posting now and then for a long long time. From what I've read, I believe the two of you would probably agree on most issues. Best to you both.
Can't disagree with what you have to say. It's just that after several years of watching this company do everything wrong..... it is nice to see SOME good decisions. I think your idea of bringing in "old line utility people" makes particular sense. The days of flash and glitz are over for NOR..... time to get back to basic business. I predict that in the not to distant future we will see a much simpler corporate structure. Drook doesn't seem (to me) to be positioning for a long term play. Not much glamour running a low growth utility with no money.
Just my opinion of course
P.S. Blow.... nice to see you back.
Looks like Mr. Drook is taking the advise of many of us on the board: "Integrity does matter". Lets see...... coming clean on the financials..... getting rid of those responsible for this mess.... working on new accounting controls. By golly, if this keeps up, I may have to join the Havseenitall group. Well..... maybe not quite yet. I think this "House Cleaning" still has a ways to go. Still quite a mess to clean up down a level or two. I understand that the theory Mike Hansen used to use was to fire the whole group and bring in your own people. I think that might be appropriate here (certainly would be poetic justice). Surely, he would understand..... that "it's just business". Keep up the good work Mr. Drook, you are starting to win a few fans.
Just my opinion, of course.
P.S. Does anyone know what happened to Trey Bradley (CIO)? His name just seemed to disappear from the executive list.