Looking further into this, the potentially faulty part comes from WSI Industries, Inc. of Monticello, MN. who apparently have a commitment to quality enshrined in their working culture (says so on their web site so it must be true). The fault was first spotted in an engine end-of-assembly run up on 3-26-2014 when a unit failed. On inspection, it was found the unit had seized because of the fault now reported. So, that’s near end March. We haven’t been able to confirm whether Polaris got straight onto WSI or not but the NHTSA document states ‘This was not an immediate cause for alarm but did require investigation‘. Yup, I guess it would. Who wants to ride a motorcycle that could throw you over the top suddenly at speed?
Almost 3 weeks later, two more units failed the test (4-15-2014) and Polaris stopped shipment of new units. Now, call me an old fuddy-duddy but what happened in the 3 weeks between the events? Polaris knew there was a potential problem, a potentially life-threatening problem maybe so what did they do? Did they warn dealers to make the checks (expensive I know but cheaper than litigation over an accident caused by a known fault)? Doesn’t look like it because that’s only just happened and even today, Polaris have nothing on their web site’s recall page about this one (last Victory recall dated 4-1-2013).
Looks to me like between them Polaris and WSI have some questions to answer, especially as owners are now being contacted and told very explicitly to stop riding the potentially affected motorcycles and get them back to their dealer. BTW, this is a bit tougher than the original statement (‘This was not an immediate cause for alarm…’)!
So, did Polaris give the wrong spec or did WSI make an error? Either way, someone’s quality control failed. If you were affected by this fault, we’d like to hear from you!
The Veebase Sniffer
Irritating that Yahoo immediately deletes any posts that contain links. Here's a cut and paste of a May 12 post a rider community blog. This should make clear why WSCI failed in not addressing it:
Polaris: Victory 2014 recall. Too little, almost too late?
Veebase Sniffer May 12, 2014 News, Victory Motorcycles 1
Product Recall – Polaris: Victory 2014 Motorcycle models
As we all know, the NHTSA confirmed a recall notice on 5-2-2014 for ’872 Polaris motorcycles from 2014, including Boardwalk and High Ball models’. The recall was issued by Polaris Industries, Inc. on 5-1-2014 to the NHTSA as required.
The affected units are all 2014 (apart from the 2015 Gunner), manufactured between January 22 through April 25 and cover the following models: Boardwalk, Cross Country, Cross Country Eight Ball, Gunner (2015), Hammer Eight Ball, High Ball, Jackpot, Judge, Ness Cross Country, Vegas Eight Ball, Vision. The cause, we now know, is the crankcase machining clearances which may result in insufficient gap between crankshaft and crankcase. This MAY cause the engine to seize and we can all figure the consequences of that happening.
.... continued next post.
Interesting article in Sept Oil and Gas Journal. Indicates pipeline construction plans being yanked because costs are ramping massively. First couple lines of the article:
Crude oil pipeline growth, revenues surge; construction costs mount
By Christopher E. Smith
US pipeline operators continued to expand their systems rapidly in 2013. Investment in oil pipeline carrier property surged last year, rising roughly $14 billion to more than double the values seen only 7 years before. But while oil pipeline operators' revenues also surged, lifting net incomes with them, revenue growth for natural gas line operators remained relatively anemic and incomes fell for a third straight year. Gas pipeline operators scaled back planned mileage additions, focusing instead on looping existing systems and adding compression to boost capacity. Rapidly rising pipeline construction cost-up 60% year-on-year and more than twice what they were only 2 years earlier-likely ...
There's an easy solution to your problem greendog03. Don't read this board.
If you disagree with the issues I raise, combat them with a cogent, opposing view. I suspect though I won't read much coming from you on that front.
The MTRX CFO failed miserably in managing earnings expectations. Shareholders got punished terriby as a result. The FY 2015 Projections don't make sense. They're hiding a major expense from shareholders and analysts, and won't own up to it. The CEO is incapable of communicating effectively. Both the CEO and CFO are failing miserably in managing SG&A. These are serious problems, pointing to a poorly managed company. The stock price will reflect that in the future.
But why are we left guessing? That's where this mgt team fails miserably. There are articles out on the net as early as first week of May that finger WSCI as the culprit for the bad parts that caused PII to recall some of their new Indian motorcycles. Then, WSCI reports in late June and says absolutely nothing about the recall? Then a director sells stock? Gross incompetence on the part of WSCI mgt. Sets them up for significant SEC problems should this recall wind up having a material impact on future earnings.
My point is an easy one to make and understand - they need to get off their sorry tails and communicate with shareholders about the financial impact of the recall. Not when they report next. Not in the coming days. IMMEDIATELY.
I suspect that's why the stock is getting hammered now.
I just can't agree with your assessment sfiaes. A couple key things bothered me in this call:
1. The CEO's review of the 5 year plan was horrid. He spewed the typical corporate jargon, flapped his jaws and communicated nothing of value. From the time he started talking, the stock started a free-fall on increasing volume, from $23.20, down to $22. Almost 5% whacked on his worthless outline of a 5 year plan. His efforts would have been better spent demonstrating a detailed knowledge of the competitive landscape and how MTRX stacks up in terms of strengths and weaknesses. He should have communicated concrete information on expected customer capital spending in each area of his business. He should have discussed how and why they expected to increase market share. Instead, we got worthless jargon.
2. Why were sales in Oil, Gas and Chemicals segment so much lower YoY? How in the world could they not have addressed this?
3. Why are they getting ZERO leverage in SG&A? As a company grows, SG&A as a % of sales should be declining. That's not happening here. Why? When it doesn't happen, its a sign of poorly managed company.
4. Both the CEO and CFO acted clueless in answering the most obvious of questions .... Well, if we take the mid-point of your Segment Sales projections and apply the mid-point of your Segment Gross Margin Projections, and assume the EXISTING level of SG&A as a % of sales, and apply the same tax rate, we get an EPS estimate of 1.70 ... why are you dishing out a $1.40 - $1.60 estimate then? Seems a common sense question to me. And it got asked twice. Each time, the CEO and CFO danced around the answer and gave us useless B.S. They likely have a write-off, or some expense they just don't want to own up to. They're hiding it. Probably large bonuses, or large exit packages to executives from acquired companies. They just don't want to tell anyone about it.
Clueless clowns at the helm.
... Pushed the stock down 6%+ on 5x normal daily volume. What has today's seller learned from the WSCI mgt team that the team has failed to disclose to the rest of its shareholders? Will we find out in a press release tomorrow? Or, must we wait until the upcoming earnings release to be told about "unexpected" expenses incurred from a product recall way back in early May?
These guys are going to go thru the call, and into the Q&A, without explaining:
1. Major revenue shortfall in the Oil, Gas and Chemical segment.
2. Why they are getting ZERO leverage on the SG&A line.
What a bunch of clueless clowns. The CFO is a weakling, stumbling and stammering through his presentation, adding nothing of value to give insight into actual performance.
Stock is melting down on high volume. Team that with what we know to be a WSCI manufacturing problem that caused a product recall by it's major customer, and it appears we're being delivered a fairly clear signal that results for the upcoming quarter are going to be miserable. The sad part of all of this? We know about the product recall from researching the Web. Management reported last quarter results well over a month AFTER the recall, yet failed to give us ANY information about the recall. Didn't even acknowledge it. They have disclosed NOTHING to us. In addition, a director of the company has recently dumped some of his stock. I just can't see anything positive coming from the signals and information we have in hand. Can anyone else?
25%. Excuse me. But #$%$ are you smoking?
Mid-point of expected EPS next year: $1.50. Actual EPS latest year: $1.33. Growth? $1.50 - $1.33 / $1.33 = 12.8%.
Reasonable PEG ratio for a stock in a highly cyclical industry? PEG of 1. Equals reasonable PE of 12.8. Take reasonable PE of 12.8 and multiply by expected EPS of $1.50 in upcoming year and what do you get for a price target? $19.20 ... 15% lower than where it trades right now.
By that reasonable calculation ... Wall Street is far too giddy on this piece of Cr*p stock and its piece of Cr*p CFO.
The problem here is an idiot of a CFO who is just effing clueless when it comes to managing investor and analyst expectations. And the resulting damage to company reputation, and value, is immense.
Only an idiot of a CFO fails to manage expectations in the marketplace to the point that his company's stock falls 25% on 8x normal daily volume, by 10 am, on the day after reporting record annual results. ONLY AN IDIOT CFO.
Get rid of this idiot CFO.
What I looked at was the CFO's projections for the upcoming fiscal year, made each Sept. So in Sept 2013, the MTRX CFO predicted that upcoming FY 2014 EPS would be in the range of 1.00 - 1.15. Yes, as the year progressed, they upped the projections.
What I'm trying to get a feel for though is whether they sandbag the EPS projections coming into each year .... in other words, to what extent can we rely on his current projections of 1.40 - 1.60 for FY 2015? Someone posting earlier this evening indicated that they always sandbag the estimates coming into the year. Based on the numbers below, that does not appear to be the case. Certainly not in 3 out of the last 4 years. So, I doubt that they are intentionally understating the FY 2015 numbers so that they can easily beat. I suspect that the 1.40 - 1.60 range is actually what they hope to achieve in the coming year. We'll know more after hearing the call tomorrow.
They have alot of explaining to do on that F*#^ing call. Their performance this quarter, relative to prior Qs, and to expectations, just plain S*#ked.
2015 Prediction 1.40 - 1.60
2014 Prediction 1.00 - 1.15 Actual 1.33
2013 Prediction 0.83 - 0.98 Actual 0.91
2012 Prediction 0.75 - 0.95 Actual 0.65
2011 Prediction 0.60 - 0.80 Actual 0.71
Nope. Did not realize how much of a cluterF*** mess this was going to be Q to Q, before I bought. Now that I do? I'll be patient for a bounce, hit the door and not come back.
Wonder if this P*S CFO will show his face at the DA Davidson Conference on Sept 9th? At least Tristan will show, so we can laugh him out from behind the podium, off the stage, out of the room.
"Revenues in the Oil, Gas and Chemical segment were $52.1 million in the fourth quarter of fiscal 2014 compared to $66.5 million in the same period a year earlier."
Why couldn't the CFO alert analysts to the pending shortfall on last Q's conference call?
Who did the idiot CFO talk with on June 16th, 17th ... that caused the massive selloff, on massive volume, from June 18th thru 27th? And what insider information got disclosed? .. beyond leaking the lowering of 2015 estimates.
"In a report published Tuesday, D.A. Davidson & Co. analyst Tristan Richardson reiterated a Buy rating and $40.00 price target on Matrix Service Co. (NASDAQ: MTRX).
In the report, D.A. Davidson & Co. noted, “Earnings results scheduled for September 3rd, after the close. The call is scheduled for the following morning, Thursday, September 4th, at 11am ET/ 8am PT. We look for $0.36 per share for the fourth quarter ended June 30th (which is in line with consensus), as compared to $0.28 a year ago. Our estimates are at the higher end of management's implied Q4 guidance of $0.37-$0.29. We look for continued growth in the Storage segment as the company continues to execute substantial work booked over the past several quarters. Our projections also include growth from the acquired North American Construction operations, which are included in Electrical and Industrial segments.”
Matrix Service Co. closed on Friday at $28.21."
Jumped to high of $29.33 today, before plunging to low of $23 after-hours, shortly after earnings of .28 reported. 2015 estimates moved from $1.79, to $1.40 - $1.60 range.
Tristan's the man. LOL.
Tristan Richardson put out a very bullish note this morning, expecting MTRX to report stellar earnings. They just reported a real mess, missing quarterly estimates by a mile, and lowering next FY estimates by a good margin.
Tristan is either an idiot for blowing this call in a major way, OR, he is possibly one heck of a #$%$. If he knew about the miss, what's to prevent him from putting out the bullish note, but telling his closest and best customers to use this opportunity to short the stock until the cows come home?
I suspect the latter. As I indicated in an earlier post, I suspect the CFO let the word out about 2015 estimates to a few of his closest friends and family ... which caused the stock to fall hard from mid 30s to mid 20s a few weeks back. Tristan found out, and decided the best way to make his clients money was to put out a head fake call on earnings. Welcome to Wall Street, bagholders.
Anywho, Anyhow ... there is enough BS going on here with the CFO, the company's analysts, friends and family, insider trading ... to never trust this lousy company and it's lousy CFO ever again.
MTRX - Uninvestable. You've got to stay away from this company. It's too erratic, too much leakage going on to select investors. Too much insider trading happening here. Its just a piece of junk company that should not be trading in the public markets.
From the mouth of the CFO in the last conference call:
" ... we are in the middle of updating our strategic plan and finalizing our budget for fiscal '15. So we will be releasing guidance for fiscal '15 in the summer".
I suspect Kevin S. Cavanah has practiced a little "Selective Disclosure" allowing friends and family in on the fact that FY '15 numbers aren't going to be as strong as anticipated. Isn't that how the thieves in Corporate America always act? Let their favorite analysts, shareholders know the news before it gets released to the bag-holding public shareholders.
Investors know the market is rigged, which is why we have plunging participation in the stock market. And we can't rid ourselves of our rigged markets because we have a weak SEC, who sit on their tails and allow the Kevin Cavanah's of the world to cheat and steal from the investing public.
If there are MTRX FY '15 estimates floating around out there, known by some, but not by all, then this company needs to get off it's thieving tail and get this information released to everyone.