OTCPK:ERILF - Post by User
Comment by
poneon May 27, 2015 3:15pm
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Post# 23770757
RE:I contact company regarding A/R
RE:I contact company regarding A/Rkeepitrealhomie wrote: Asked them about payments and the health of it. This was the answer I got:
I presume you are looking at the aged trade receivables in the annual report. Two things to note:
· Trade receivables have only increased 1.5% year over year, whereas revenues increased by 20%.
· The increase in older receivables is driven by the increase in revenues of the steel business, which historically has longer payment terms than manufacturing or media based attractions. (Steel revenues increased by 82%year-over-year – from $20.6 million in 2013 to $37.5 million in 2014.)
The first point on the 1.5% growth is not really responsive. It's the composition of the receivables that matters. But the second point helps to understand what is happening a lot, so thanks for that.
It would be really nice if they would put a footnote into the annual report showing a breakdown of AR for each of the main businesses, so people could track receivables behavior to specific businesses.
Why doesn't Empire just sell the commodity steel fabrication business? This is a commodity business with no barrier to entry. The margins are awful. And now they are telling us the customers in that business don't pay timely. What is the reason to hang onto such an awful business?
The media attractions business has the potential to do something magical to this company over the next 10 years. Why hide that success behind such an awful business as steel fabrication?