Thought 5 or 6 curies was the target for maximum implementation/coverage for the isotope? They seem to be stuck at 4 curies, which I believe is still pretty good. Any science types here that can chime in?
The Board will always be just a rubber stamp since he has voting control. The CFO and accounting firm were both changed out recently, hmmmmmm? Is it a place for "Yes Men" only? More likely folks distancing themselves from Nero before Rome burns. He's fiddling alight.
And since that letter the company has added a host of other problems: a revolving door at the executive office level, a maddeningly inconsistent earnings progression that carried over to a maddeningly inconsistent dividend policy of invoking a dividend than omitting it without notice or rationale, continuing option awards despite a lack of bottom line results, a Board of directors that has gotten that much older and that much more entrenched . And since that letter Lazarus has stood alone as the only institution w/the stones and character to call the company out on all these issues. Maybe they could not change anything w/o invoking a proxy fight which they were loathe to do. But they shone a light on how a company should not be run--- and that a company should be run first and foremost for the shareholder owners. Ironically, the support for such an action is probably there today because four years later Lazarus have remained proven right.
Almost every single point in that letter could be written right now, excepting four years later the company is just beginning to diversify. One wishes they could say they were waiting for the payoff of that recent move w/bated breath, but it more w/the holding of one's breath. The net cash position was cut in half. A chunk of intangibles was acquired. The acquisitions were projected (per the Jan 30, 2015 CC) to be accretive sometime before the end of Fiscal 2016, or within 11 months from now. Then again the company's timeline projections have been historically a bit of a wild guess for anyone who has followed them for a while. Timing differences and all, you know......
nearly four years ago. Look at the revenues and look at the net income. They have missed the entire auto upcycle. That letter of November 8, 2011 is as germane today as it was then both in arguing for the sale of the company and calling into the question the requisite skill set of the Board of Directors as well as the underperformance of the share price. It should be read by every current and prospective investor. Simply google: Lazarus and letter to Perceptron, and it is easily accessed. Read it before the next shareholder vote for the nominees to the Board in November. Read it before you buy the stock. It will take 5 minutes of your time.
Yeah, he's got voting control alright, but it's just like that song from Porgy and Bess----"I Got Plenty O' Nuttin'"
Nearly two decades of obliterating shareholder value. What a legacy. The bankers are all working on their golf game. There will be no problem getting a tee time when you own the courses.
market cap is just under $8 million. The assets , if they were in LaJolla or Palm Beach, would be worth maybe $25 million. In Ohio they are probably not worth $8 million.
analysts are probably distancing themselves from the company. You don't want your name tied to this one as the axe on the company. Dropped coverage is more likely IMO.
Lots of assets are valued at a fraction of replacement cost: offshore drilling rigs, nuclear cleanup facilities, coal mining equipment, etc. The worth of an asset is the free cash flow it generates, not how beautiful it looks, or what it costs to replace. Lenders will likely flip the properties to someone like Blackstone to recover some portion of their hypothetical debt gone bad if that eventuates. The second mouse gets the cheese--- at a fraction of the cost. The CEO is operating under the "Field of Dreams" delusion: "If you build it , they will come". How's that been working out for him the last several years? Go look at the financials for the golf and related operations segment. It's not worth arguing about. Stock price is truth, and it is speaking volumes. It could be worse, he could be doing all of this in Indiana.
now. He's working for salary and a little bonus--that is assuming the company can at some point again generate positive cash flow. Meanwhile he will have to wear the hats of CEO, COO, CFO---chief, cook and bottle washer. At the same time he is losing shareholder support and who knows how the Board feels? Were he to leave, I suppose that would leave the Controller to run the company. Juggling timing differences, the strong dollar impact, a new financial reporting system, Wall St. expectations, analyst expectations, foreign operations, integrating acquisitions, dealing w the overhang of litigation and unresolved foreign withholding issues, new product introductions, in-roads by FARO expanding its own 3D metrology applications, a peaking auto cycle. He better not drop one ball, not even one.
The acquisitions and new products better darn well work out or the company could be in deep, deep doggy-doo. They have been on a lackluster path since the new CEO took over. He gets two years as a honeymoon. No one is going to given him more than three, if he lasts that long.
But the assets are not making any money. Golf and related operations segment has been losing money. The CEO is bellying up to the bar for more of the same. He'll lose money in a more sophisticated way. Put it this way, if you were getting married, would you, even in your wildest dreams propose to your bride that you honeymoon in Northeast Ohio? Almost nobody vacations in Ohio. Golf vacations are Hilton Head, Kiawah Island, Florida, North Carolina, Palm Beach, Pebble Beach, San Diego. This company's biggest asset and biggest bet is in an area you can only use maybe 6-8 months out of the year. Doubling down on that is pure insanity and could kill the company. Institutions and retail shareholders are probably going to lose everything. The shame of it is that it is so damn obvious, just like building the injection wells in a documented earthquake prone area. The CEO has voting control, and so shareholders can only vote w/their feet. What do you think the have been doing? Look at the freaking stock price.This is mass exodus on a scale only tempered by the lack of trading liquidity in the stock. While the CEO was racing $9 million of debt, he should have raised a little more and just taken it private.
When you start having to talk about underlying asset value instead of cash flow and earnings, you have an issue. Ultimately this is going to become a liquidity issue. Cash may be trash, but it IS liquid. CEO seems willing to spend all the shareholders' cash and leverage to the hilt for his last big hurrah. I still don't know a single person who vacations in Ohio. The potential mis-step here is so big and so glaringly obvious it is surprising no one is interceding from the institutional side to protect their investment. They are probably going to lose everything. They seem resigned to accepting that outcome. I suppose without voting control, all they can do is vote with their feet. Corporate assets are being squandered, first on injection wells in a known earthquake prone area, and then expanding a resort that has yet to make money. It borders on insanity. It is worse than throwing good money after bad. It is gambling.
I didn't pull the $50 million value per rig from anywhere. I am saying I think that is the implied market value currently being inferred by the stock's share price based on those rigs delivering significant free cash flow over their remaining funded contract time periods, adding the cash on the balance sheet, and subtracting debt. The remaining value has to be rig value and any net working capital available. It is a rough guess. It is not meant to be true value. True value is only realized if the rigs are sold and an actual price is paid for them. The market can be right or wrong about implied value of the rigs and it may not equate to what you think what true value actually reside in the rigs. I'm open to alternative valuations as to what anyone else thinks the rigs are currently being valued at based on the current share price. True value probably lies somewhere between scrap value and several hundred million dollars value per rig. If the market is severely under estimating true value, the company should go private and buy the stock in cheap or sell the rigs for true value over implied market value amount. I suspect it would be near impossible to find a buyer in this market. That may change over time.