Maybe part of the job description as they seek to fill the CFO position should include: "the ability to thoughtfully craft an earnings warning release". The departing CFO had to do a couple in just the last year. That ain;t ever going to go away.
And how is the company going to convince shareholders to stay invested when they cannot even entice their own COO and CFO to remain w/the company despite an ostensibly bright future? There is one reason the big institutional holders and activist leaning types may stay invested. That is because they now have enough ammo after this latest quarterly disappointment to probably oust the Board within a matter of months, remove the poison pill and force sale of the company. There isn't enough time between the forewarned fiscal 3Q results and the annual shareholder vote to turn around perception. The company itself intimates such turnaround and displacement of volatility will be a long run process. The Board was nearly removed at the last shareholder vote. We'll see in November, but it may be a foregone conclusion that they will be history. Frankly, the large shareholders should mount a proxy contest almost immediately.
gemini, you should know by now that very little ever changes w/this company. The business model simply does not work. They have tried to go back to the white board and change the management lineup, add diversification via acquisition, roll out a new financial management system, etc. The bottom line as always is that they will be held hostage to the whims of auto industry spending patterns and installation timing decisions. Whether that is 80% of PRCP's business, 70%, 50% or even as little as 10-15%---it will always blow up results. The company belongs as a small unit of a larger company, probably one even larger than CGNX or FARO---one so large the volatile results get "lost in the sauce" when earnings are reported. In effect it should be like a very small portion of a very large company's R&D department that spins out a few new products every now and then. As a standalone why would anyone put even a market multiple on totally unpredictable earnings? Even if they earn $1.00 per share in 2-3 years, who cares? What's that even worth?
How do you keep an Executive team together when performance bonuses and stock option awards are rendered moot by customer timing decisions? The answer is you can't. Every year you are likely to have at least one quarter blow up w/ an adverse customer timing decision that impacts the annual performance incentive targets. The former CEO and CFO both decided to retire a little over a year ago. The former COO resigned a few months ago. The current CFO just tendered his resignation. These guys know how to run the numbers and also that they do not control their own compensation outcome no matter how diligently they perform. Great technology and smart employees, smart enough to read the handwriting on the wall.
Time for the largest institutional holders to exercise their fiduciary responsibility and provide a solution. The Board and executive ranks are in disarray and incapable of dealing w/ the recurrent issues impacting shareholder value. Earnings/losses continue to be a complete surprise every single quarter. Flip a coin.
The only thing you are missing is the timeline for when Ariel, Royce and others muster a proxy contest and begin the coup.
CEO will likely getting stock options at the end of this year around $10 per share exercise price again---if he is very lucky. Very likely you will see Board resignations or the entire Board voted out by shareholders in November.
Good thinking, apparently similar exposure and vulnerability between the two companies right down to the abrupt CFO resignations a couple weeks before the earnings reports? Eerily similar.
What you do leave behind on the table when you go to work for a private firm instead of a public company is having to deal w/public shareholders, the SEC, quarterly and annual filings, Sarbox responsibility, having to perform every 13 weeks and sit through the dog and pony CCs, dealing w/a BOD that may be under public pressure, dealing w/institutional investors, etc. If you're making a half million dollars a year and getting showered w/stock options it can be a ton of fun, especially for a company on a predictable upward glide path and few bumps in the road. Not sure I could work for a public company under quarterly scrutiny whose fate is largely dictated by customer timing decisions; maybe not for any amount of money. Who knows the reason why someone switches jobs? The easiest explanation is PRCP was a stepping stone and he got a better offer. Better can entail a lot of things. The search firm that advised hiring him maybe another matter, depending on what they got paid for a guy that lasted merely about a year. I'd say PRCP shareholders are due a refund.
If I were FARO I would strike now before the new product cycles ramp up at PRCP. BTW they also need a CFO. Both the BOD and executive positions at PRCP remain "vulnerable". There will never be a better time for FARO to move. PRCP BOD members, many of them at least, are in their 70s. How long do they want to deal w/ constantly mercurial personnel issues in the highest ranks and shareholder scrutiny? As a PRCP customer FARO could bring a supplier in-house. As a PRCP competitor they could improve pricing by removing PRCP from the mix. They could benefit from PRCP's new products, add further diversification both technologically and geographically, and realize significant cost savings from redundancies. Given the recent troubles at FARO, now is the time for them to make a smart semi-bold move that has little downside to it. Will they? Probably not.
What would you do greendog? The CEO got a package on hiring that included stock options for 300,000 shares (100,000 per year for three years). The CFO got stock options for a grand total of 25,000 shares that quickly fell out of the money, and remain out of the money, and only vest over a number of years. He leaves little on the table by departing, other than a job that pays a a couple hundred thousand a year for a guy approaching his mid-50s w/ degrees from Lehigh and Carnegie Mellon. If one was ever gonna make a move to upgrade late in his career now would seem to be a good time. He had responsibility for overseeing the recent acquisitions, implementation of a new financial (e.g. accounting) system, multinational operations and the associated currency headwinds that have come w/them, and working for a BOD that was nearly ousted at the last Shareholder Vote. The COO resigned just last December and the former CEO and CFO merely a year prior to that. Given all that, if he got a stable and better offer somewhere else where the Executive Suite has been anything other than a revolving door and he was looking at his own retirement a decade henceforth.....he would have to consider it I assume, especially when the current CEO is sucking all the stock option award oxygen out of the room. Just one way to look at it if one had to guess as regards the motivation. Doesn't seem to be an issue as regard the current quarter as several executives have left or retired over many recent quarters. At some point he BOD will get tired of hiring new CEOs, CFOs, COOs and disgruntled shareholder votes and maybe consider selling the whole deal. Until then, Ms. Smith will be earning every penny of her job as Controller and Chief Accounting Officer.
At a minimum, we know that several medical diagnostic imaging companies that use Tech-99 are already lining up non-HEU sources of supply, even in advance of commercial viability being established and FDA approval. Most of them will want multiple sources of supply.
You could probably get a few million dollars for the golf courses, another few million for the hotel, $0 for the injection wells, $0 for the waste business (which doesn't make any money), and net working capital is offset by long term debt. Stock is still a bit over-valued on a liquidation basis. You got a hodgepodge of garbage here that doesn;t make any money. The land and hotel and buildings are worth a little bit. That's it.
What do you think DRAD's agenda is w/re: to PESI? What is their endgame--just a small investment in the Permafix Medical sub as a "flier" and ultimately a possible source supply of Tech-99 at a preferred rate (if approved), or something bigger? The mix and history of DRAD and PESI and Mr. Climaco's hire broaches some interesting scenarios does it not? None of the inter-involvement is a coincidence.
I also think the DOE has its snout in this too, sniffing around (what they call lending a helping hand to produce a non-HEU source of Tech-99). Really need to keep the government out of private enterprise. Having them involved is a sure fire way to mess the whole deal up. You want the government (other than FDA approval) to have zero involvement in this and zero call on its future if successful.
I see also that NorthStar Medical radioisotopes is already in this area and has a relationship w/both GE Healthcare and Triad Isotopes, so I wonder what the edge is that PESI has? Is it who ever gets there first, or something else. GE has very deep pockets.
thx. for response. IIRC from most recent CC they implied they could begin seeking FDA and Europe approval/application almost at the same time if the scale up and design proves up. Two questions. Lots of things work and are technically doable, but do not make commercial sense. How confident can we be that this makes sense commercially w/o use of a large nuclear reactor? If it is "smaller batch" processing in smaller volumes from small research reactors do the economics still work, or is there a way to scale up to size so that it does makes sense from a profitability standpoint? I guess that is what the next step is all about. Secondly, once submitted, how much quicker could EU approval be obtained, hypothetically, than FDA approval if submitted simultaneously? Also, having trouble bridging the 2-3 year time frame to fruition vs. a supply crisis for Tech-99 within a year. What happens during the gap? They also said they expected to be full-scale by the end of 2015 and apply to the FDA shortly thereafter, so I am confused by the timeline here. But in theory you might expect the share price could react to each and any of several marker events:news that the scale -up proved feasible, that EU approval was obtained, that FDA approval was obtained, that orders were received, and so on. Also I assume that Tech-99 however produced is all the same and the quality of diagnostic imaging would be comparable w/PESI's method.