They sure as heck are not going to earn it out of net income this year given the one-time special charges. Yeah, they have cash on the Balance Sheet, but traditionally you are supposed to pay dividends out of net income. The "cockroach effect" is in full play here. The company is infested with them and has been for a couple years. Always will be because autos will never be much less than at lest 50% of their business. That's half their business subject to customer timing delays, probably forever. And that's the best case scenario. Gonna take a couple more years just to get it down to 70%. Gonna need that "dividend money" to pay for Executive Search----again!
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.
But I guess that is only a consideration further down the road and won't drive near term stock action. Stokluver, I agree if the process is commercial viable, the share price should pop quite significantly. Is the medical sub a foreign sub?, Maybe there is a reason they seeded it and listed it and ran it out of Poland via a shell company. The guys running PESI are smart about stuff like that. I don't think it is because it was the only place they could raise money.
The Medical Isotope business is the key, the home run swing for the fences that can clear all the bases. First it needs to work and then it needs to be scaleable. But there is a third consideration I can't get my arms around as to how it plays out. PESI has a proprietary patented process here. That is fact. When Chalk River closes they could also have a near monopoly on a preferred way to make Tech-99 in a couple years. But I worry about government intrusion in the interest of the "common weal" for a process, maybe the only process, that can save tens of thousands or hundreds of thousands of lives of the American citizenry via medical diagnostic imaging (of course it would be applicable outside the U..S. as well). It's probably not an issue, but I wonder about an analog, like eminent domain, where the government intercedes itself for the benefit of the greater good and tries to limit the profit potential of such a process. They try to do it all the time w/life-saving drugs, especially Democrats who constantly bemoan "profiteering" by private pharma--- ignoring the decade or more and often billions of dollars of expense to discover and bring a drug to market. The government is expert at meddling, regulating, restricting, and even confiscating (it's tax time as we all know) what rightfully belongs to others in the name (or guise) of protecting the greater good. If the PESI process works and is commercially viable, they should be allowed to charge whatever the market will bear. But if they are one of the only source providers, I wonder how it all plays out. It's their patents, their discovered technology, their investment and know-how to be sure.
I would happily hold the Isotope stub if they spin that to shareholders and dump the shares in the primary business.
I view the possibility of the $2s as a short-term hiccup as this company is out of excuses, and the disappointing outlook for Q1 offered on the CC will not get a pass. Someone is quite obviously trying very hard to exit a position before that Q1 report due in a few weeks. Everything was upbeat on the prior CC, but this last one put the company right back in uncertain territory as regards DOE spending and timing. Moniz has his hands full w/Iran over the next 3-6 months. Spending on the business PESI is in, allocating funding , or even awarding contracts is the last thing on his mind or the DOE's agenda near term. I have switched my view of Permafix medical as being the cherry on top, to where it is now the sole reason you invest in this company and simply accept that the base business is awful and hope is can just trend breakeven while waiting on the isotope potential.