Hey, Meifud.....did you run out of twists on my moniker? Now, you start to impersonate others like "tyerep."
Man, you remind me of someone who has road rage. Hatred like you exhibit destroys one from the inside out.
While I'm engaged in this analysis....I've had one recent thought on the matter. There's no doubt that the longer this thing drags out, the more difficult it becomes for BFDI to financially support the Baltimore contract. No company of BFDI's size can go on and on supporting an infrastructure via large expenses when there is no revenue coming in from the deal. If Baltimore wants out of this contract (the press indicates that is the case), it surely gives the city a case to argue that BFDI can't financially handle it and would sure make BFDI willing to step aside so it can continue its business. I mean, how is BFDI going to fight a long drawn-out court battle without a lot of money. Conversely, why would the city want to put its vendor out of commission....a home-town vendor at that? The press publicizing financial woes at BFDI prepares the public for the end of the contract and gives the appearance of fault on BFDI.
However, there is a WBAL piece from the other day that has an audio piece in article. Brandon Scott, a councilman in charge of public safety matters, is being interviewed and he stated that there was plenty of blame to go around with regard to the contract between Baltimore and Brekford. The last earnings release states that the company is hunkering down on conserving capital and realigning costs with existing revenue.....that is a clear statement that it is not going to maintain the level of costs to support a Baltimore any longer.
My theory on the press is that all of what's going on is in preparation of a discontinuance of the Baltimore contract.....nothing more and nothing less.
I personally am ready for BFDI to move on to something else.
P.S. Fab, you have probably noted the spike in inventory back in the 1st quarter numbers and then a drop in the 2nd quarter inventory with a spike to receivables in that 2nd quarter.....followed by a decline in receivables in the 3rd quarter. This likely presents the flow of the camera element. What portion of the camera element I don't know. Following the numbers through these accounts....from inventory buildup through receivable collection....does not appear to represent anywhere near to the entire 2.2M, though. As to where any remaining camera money is evidenced on the balance sheet (when BFDI bought the cameras).....whether in inventory or in Property, Plant and Equipment.....I can't determine based on the SEC filings. Also, I'm not sure of the markup on the cameras. Knowing the markup to the city from BFDI would be key to resolving the puzzle...but the company is not going to give that information out.....I doubt. All of these blanks must be filled in to determine any difference to be seen on the future balance sheet numbers and resultant liquidity standing.
The intent of my first post is that, setting aside the press's analysis??, my own analysis shows liquidity to be tight, but not so tight as to represent an imminent bankruptcy concern. Further, any future camera collection can do nothing but benefit the company and shareholders. If the contract in Baltimore is severed (as the press has publicized will be the case), we don't know what kind of settlement would be achieved to free both parties from the contract. Until this is known, factoring in the effect on BFDI's financials is impossible.
The market overall has been so strong, tax-loss selling is likely playing a role now too, IMO.
I have to say that I'm not totally sure because I'm not sure when the cameras became useful. Your question is one I've researched for some time previously. Part of the point of my post was that evaluating risk goes beyond reading what the press says. Dealing with the issues like you are looking at is the only way to make a commonsense evaluation of where the company stands financially.
A sale is booked after the inflow is both earned and realizable under GAAP principles. Both criteria must be met before revenue can be booked. Based on every source (10Q, biased press, anything) I've seen, the cameras are installed....installed to the point of the city's usage? That would need to be the case before the funds are "earned." Further, the issue of "collectability" must be settled too and not in question for the sale and receivable to get booked.
Looking at the numbers on the financials, I don't think the 1.5M (maybe a small portion has) has been booked. That's my opinion. You and I both know it is a very important question, though.
I luv ya too, Fab......I don't think the press ought to be my basis for judging the bankruptcy risk, though. That's my point.
BFDI is getting hammered by the activist press and the multi-personality Meifud (who BTW is always consistent....always a basher....and who does not discriminate with aliases....can be Jerry or Cindy). Can you imagine what would happen if the company actually said something before this baltimore deal is worked out?
As to BFDI's financials, bankruptcy occurs when you can't pay your bills on time. If one wants to evaluate that issue, he/she is going to focus on the PNC credit line. As of September 30, BFDI had 6.55M in current assets (mostly cash and A/R) and 6.82M in current liabilities. The 6.82M includes the 2.5M owed to PNC bank (due in March 2014). The 6.82M also includes .5M owed to CB and Scott, which is not due until September of 2014....and there's no way these managers are going to ever require payment until its good for the company since they together own over 60% of the stock. Does anyone actually think these guys lack incentive to right the ship?
Anyway, you can forget the .5M owed to CB and Scott because they aren't going to call that due....so, effectively BFDI has 6.55M in current assets and 6.32M in current liabilities (6.82M less .5M). The company therefore could narrowly pay off all current liabilities from available liquidity.
If you read the last 10Q, there was over .8M more spent over the past 9 months on salary-related expenses directly tied to Baltimore. BFDI just told us that it is taking its costs down to assure breakeven operations....that tells me it is not going to let the Baltimore delay hurt the balance sheet further....those variable costs are getting chopped.
PNC, like any bank, comes out best when it earns interest and gets paid back. At this time, there's nothing to indicate BFDI's inability to resolve the loan.
Further, Baltimore already agreed to buy the cameras from BFDI and it owes BFDI 1.5M, whether the contract goes forward or not.
So, the biased press....or commonsense?
I'm open to the notion that gold is bottoming right now. Conceptually, do I want to consider GSS when everyone is buying gold or when everyone is dumping gold? IMO, gold is just being dumped now.....not just today, but for sometime now. Yet, today, has the feel of people just running for the exits as another news item appears to suggest that all is well in the market. GSS seems to be shrugging it off too.....which is possibly pointing to a bottom in negative sentiment. There are blow-off tops and exhaustion explosive sell-off bottoms. I think we may be experiencing the latter right now....while our stock market overall is in bubble-land, IMO.
that has to be the most irrational post written here before.....you say don't buy unless around .70, but if it breaks 1, it will be 2 in short order????? Wow.
Hello WWRP. I almost missed checking out the board today. I'm glad I checked. I've missed seeing you on the boards. I trust your bride is doing well. May God bless your family this Thanksgiving. Thanks for taking a moment to remember.
I hope everyone here has a wonderful Thanksgiving with the ones you love.
One of these days, these characters that are throwing stuff out there to see what sticks are going to make a mistake themselves and get uncovered. Yea, everyone hates cameras is a present remark....but this remark is not even true (everyone does not hate them) and cameras serve a purpose our society is not going to be able to deny or do without. Irresponsibility carries the consequence of loss of freedom.....and creates a growing demand for the information and security cameras can provide. So, IMO, these anti-camera advocates that say whatever comes to mind on the merits of "he said, she said" in order to bring about the demise of cameras are going to make a critical error.....and when it happens, the movement will get weakened.
I read that yesterday morning in the camera news. The end of it says that BFDI has scheduled a date to review the person's claim, even though the date for this individual's ability to contest his ticket has passed. It sounds like the town and BFDI want to look deeper at the person's claim. It sounds bogus to me. There would be 1000s upon 1000s of tickets issued by that camera if the person's claim were true, yet there's been nothing about a problem there for the years since BFDI has managed the camera. It's like you said, there seems to be an effort to push BFDI out. My guess would be Xerox. This particular incidence sounds absurd to me.
How about me flipping the question, Toby....have you sold any? I've been asked this question over and over. It's my business, but as I've stated before, I haven't sold any because I don't know what's going on with the Baltimore resolution. Why shoot myself in the foot and drive the price down? I can sell on fear or I can see what's going on. You have the same choice to make. I'm sick of the Baltimore issue and just want them to make BFDI whole (at least for cameras) and see BFDI walk away. None of us has so much as a guess about the real problems in Baltimore. It's just turned out too political and I would like to see BFDI go back to pursuing incremental growth via smaller contracts.
It does little good to report...and ignoring is best.
I just encountered again one of my favorite reasons for cameras. My wife and I were out for a walk in a very busy vacation community area this afternoon where a young lady had been pulled over by someone from the sheriff's dept. He was ticketing her.....had his lights flashing and everyone was turning around to look. She looked humiliated. I'm sure she would have rather received her citation in the mail, even if she was caught by a camera.
You are one hateful person.....others here may think you are hateful toward me, but you are hateful to others you seek to deceive.
Whenever a direct connection can be made between an event and the stock price, you have evidence of the impact of that event on the stock price. It does not matter whether the press turns out right or wrong....it publicly exposed information that was hearsay at the time. It harmed shareholders of BFDI. This is salient, IMO.
BTW, I believe someone has some responsibility for the leak in the B. Sun and should be called to account. Who related the information to the press? The stock price directly was impacted by that article. No person would contend with this statement. It is self-evident in what happened the next day of trading. There was no broken contract at the time of that release. Somebody passed something to the press. That somebody has responsibility. While being busy at condemning the company, there's a basis for condemning the action of the press here. I mean, our company got corrected by the same press for telling us it expected cameras to come on before the end of the 3rd quarter.
There is a lot of emotion expressed and rightfully so. Further, this is a basher's paradise situation.
Rational posts will be appreciated by some and mocked by others.
Bfdi stock is being priced relative to its default risk here. This is not a price from risk of bad earnings....although bad earnings can bring financial distress. The earnings were known last Thursday from the NT 10Q. The stock did not fall then.....it cratered after the B. Sun piece released over the weekend.
So, what could make the price remain severely depressed? Fear of default and/or default. What makes the price go up? Removal or lessening of the concern over default. If risk of default is resolved, the price will have to go up, and I think quickly from this level.
Consider several scenarios relative the default risk:
Baltimore languishes on........IMO, it heightens the risk
Baltimore comes online or BFDI partners with a bigger company to run it, for example....IMO, risk is resolved
Baltimore is ended and BFDI is paid what's due them.....IMO, risk is resolved....balance sheet is cleaned up....variable expenses related to Baltimore decline immediately....profitability becomes possible again
I favor the third scenario......BFDI built its business without Baltimore....it can do it again, IMO.
As to BFDI's reputation if things are ended, consider that Chicago selected Xerox after it was fired in Baltimore.