That is correct. I hope Spartan did not push work into the next quarter so as to reduce the amount that is owed to VIDE. It will take several months to determine what is owed and to have it verified by the accountants and then hopefully there is no litigation or dispute. One other good thing in connection with the Aydin sale is that for the last year VIDE was required to keep $1.2 million in escrow. The escrow is over at the end of August. Hopefully that money will not be the subject of any claims. So the amount of money that could be released to VIDE is up to $6.6 million plus the $1.2 million held in escrow. The real question is what does the company due with these funds? Before taxes they would have over $2 per share if they get the maximum. Don' t forget the CRT settlement which should be paid soon if it has not already been received. I know the gross amount of the settlement but not what percentage belongs to VIDE. I hope to hear some good news from the company in the near future.
I agree. Just vague statements and no concrete guidance. This is now a very small company. On the other hand it is possible to grow a small revenue company by large percentages. But what is the plan for this company to increase revenues? They seem to go from one small contract to the next. Ayon Visual Solutions' sales dropped because last year's quarter contained one large sale which was not able to be replaced during the next 12 months. Really? A distributorship covering the entire country and not only no increase in sales, but a big drop. There is no record of consistent growth, just hoping to get a contract here and there. That is not a plan. With no debt, greatly reduced expenses and three divisions, you would think the company could turn a nice profit. The stock is going nowhere until there is a plan and execution of the plan shows results. Waiting to see how much of the Aydin money and the CRT monies are received later this year.
I am guessing that the first quarter earnings ending May 31, 2014 should be released tomorrow. Not sure with such a very small company now why the earnings take to the very last day to release which is 45 days after the end of the quarter. Probably only $4 million in revenue from on going operations. Just 3 small divisions. With today's technology the computations should be available in a few days. I am further guessing that the earnings will not be good. I will be curious to see if the overhead expenses have been reduced to match the much lower revenues. Management salaries are too high for such a small company. Rent payments may also be too much for the downsized company. Savings on overhead go directly to the bottom line. What type of return is being achieved on the cash being held by the company? What steps are being taken to increase revenues?
Thanks for your comments. Good luck to you. Lately there has been increased volume but no explanation for it. The company does not make announcements so everyone is pretty much in the dark. Time will tell.
You were right. I just read the NH newspaper article about the Howards being sued for fraud by the NH Securities Agency. Mr. Howard, was twice convicted of bank fraud, bribery, insider trading, etc. He served two prison sentences totaling 3 years, which was less than the full time sentenced. How they became associated with the company without a thorough background check is troubling. The people they handled investments for paid them for the advise and also lost large amounts of money. They were not licensed to charge for financial advise and Mr. Howard had been barred from being involved in that sort of activity. They caused a number of people to lose a lot of money. They have hired an attorney and will defend against the charges, but it does not look good for them.
I have no personal knowledge of the Howards. The difference between being seen as a smart investor or not is simply whether an investment turns out well. No one makes only successful investments. I think these people were caught up in the great recession as so many people were and probably being leveraged when everything tanked, they may have suffered large losses. I know from the public insider trader filings that they followed the CEO into several investments that were disastrous. They then sold the bulk of their long term holdings in VIDE at a low price. I think they were well intentioned but probably overextended like so many people whether it was in their homes or in the stock market. So I would not be too harsh on them. Investing is risky and what caused the great recession was beyond our individual control. The sad part is that it wiped out many people's entire assets. I do think that the board members do not matter. The company is controlled by the CEO and while he may ask for opinions he runs the ship. The board members are requirements of a public company. In the sale of the divisions there was a resolution that passed, obviously since the CEO and family have a controlling interest, that bypassed the Board and gave the CEO full authority to sell the divisions. That resolution told us that the major decisions belong solely to the CEO and there was not even a pretext of involving the thoughts, advice or wishes of the Board. Other than the Howards at one time, the present Board members own very little stock and have not purchased any despite the low stock price. I wish the Howards well.
My two cents worth. The company made the decision to keep VDCDS since that was the division that was supposed to win the large gov't contracts. Remember the "pipeline of perhaps $250 million". More than a year later there is no mention of what was to be a game changer for the company so we can assume that VDCDS did not win the contracts. The company has no debt, a strong balance sheet with more money to come from the CRT settlement, the Aydin payout, the Aydin escrow ($1.2 million), $1 million owed from Lexel plus a payout of the inventory of Lexel ($2.9 million) and lastly $1 million owed from the Z-Axis sale. While the two Ayon divisions are doing better they only amount to $5 million in sales and the markup on the Ayon Visual Solutions division is small because the company is merely a distributor so even with increased sales the profit is low. The real key is VDCDS and it dropped to under $7 million in sales. I agree that the large CRT inventory write offs are over with and that it was a paper loss and that the inventory still exists and will be sold over time. I agree that the number of shares outstanding have been reduced. I agree that overhead and fixed costs are being reduced. Only 71 employees left from close to 500. But this is now a $14 million dollar company in annual revenues. It once had over $80 million in revenue more than 10 years ago. How much money can be made after expenses and taxes on $14 million in revenues? How much time will it take to grow the company? Without the home run, such as those large gov't contracts that were not won, this is now a very small company. I think there will be over $2.00 in cash, after taxes, by the end of this year and the value of the remaining businesses might be around $2.00 or slightly more as things stand right now. The company has no debt, it has cash and could grow with the right decisions being made and good implementation. But will it? The market is not impressed as of now.
That is a nice sign. It would even be better if the buyer would purchase at the asking price and by doing so drive up the stock price into the high 3's. BTW, Vanguard, a long time institutional holder, increased the number of shares it owns by 27,000 during the first quarter (January through March 31, 2014).
Don't believe they are corrupt. However, I think they are inept. Almost 2 years ago the decision was made to increase shareholder value. The stock is 20% lower now. The CEO is still being paid the same $200k even though 3 divisions have been sold. The company is still paying the CEO the same rent for the building in Tucker. What I fail to understand is why the CEO is content to let so much time go by without improving the company or the stock price. The CEO should retire as was announced almost 2 years ago and let someone with fresh ideas and more capability run the company and try to turn it around. Last year's fourth quarter earnings will be announced this coming week. I am betting based on how the stock is doing with people selling at these prices, a new low was set yesterday, that the earnings will be terrible. This from a company with no debt and money in the bank. It is now a very small revenue company with no disclosed plan to increase revenues and profits. Right now things look bleak. Maybe the CEO just wants to buy the rest of the shares on the cheap and take the company private. Actions speak louder than words and right now there is no action by the company. Absolutely no transparency. If there was any good news at all we would have been told. The question is, what have we not been told.
The company sold off the two largest divisions in order to pay off the bank debt, Due to the failure to keep within the loan covenants the interest rate doubled and there was a $2,000.00 per day penalty. So the company was forced to sell those divisions. As we see, the third division was sold for $1 million cash, paid over a few months period, and a recovery of the inventory to be paid over a few years, presumably as the inventory is sold. So the third so called division was worth about $0.15 per share in cash and a promise to pay for what the company already owned, ie., the inventory, and probably at a steep discount. Next, the company put all of it's eggs in one basket, that of the Florida operation that was supposed to be awarded a huge contract. Well that was first mentioned more than a year ago. Does anyone see or hear about such a contract? It is very risky to put all of your eggs in one basket. What the company does have is the following: Perhaps $5 million remaining from the sale of Z-Axis; $1 million to be paid in the next few months from Lexel; as much as $6.6 million as the payout from Aydin depending how Aydin did as of the end of this August; money from the CRT settlement which has been resolved and the funds should be distributed in the next month or two; Ayon Visual Solutions which is a distributorship of the eyevis products; Ayon CyberSecurity which was bought for $625,000.00, the Florida operation, VDCDS, and some real estate. If you add up the cash it could be about $2.00 per share, depending on taxes and whether the company is losing money and using some of the cash. If you back out the cash, and the cash presumes that the Aydin money will be paid at or near the top of what might be owed, then the market is valuing the rest of the company at about $1.50 per share or $9-10 million dollars. If the Florida operation had gotten the huge contract or if it still could, then the plan would have worked out so much better.
I do recall those numbers. However, the company may not have known the full amount of the settlement at that time and I am not sure how the company can know what % of the settlement it would be entitled to. In any event, numbers provided by the company have rarely been accurate. Let's hope the company was intentionally being conservative so as to avoid any claims that the company overstated what it might receive. We will find out in the next few months if not sooner.
The CEO said he would turn over the company to a younger person with new ideas. That was supposed to happen a while ago. The CEO wanted to be in charge of the sale of the subsidiaries which he has done with 3 sold. The company intends to be an ongoing concern with the FL operation as the main division. It would really be best if the company was run by someone who could build the company with the cash that it has or steer it in a direction where it would actually make a profit. The fact that it has no debt, money in the bank and has cut so many costs and still can not make a profit means that someone else should be at the top or the company should be sold and the proceeds distributed. The CEO is the person who is losing the most money and seems like a deer caught in the headlights and does not know how to get the company profitable. Some of the cash may be used to cover losses. That is a shame.
You used to be confident this was a great buy. It is going down because larger holders of the stock are bailing out at these low prices. No news from the company and not reporting earnings or the lack thereof for two months does not build confidence with investors. The shame of it is the company might have $2.00 in cash at some point later this year and investors are selling at $3.25. That means they value the remaining assets at not too much.