RE:RE:Results?Read the MD&A quickly. The demise of Global (and KNR's loftier ambitions) is effectively summarized as: "Global’s large-scale HVAC operation is focussed primarily on high rise multi-residential. The acquisition of Global in 2021 added substantial new revenue and scale. However, as the Company was nearing completion of many sizable construction projects, Global’s operation was heavily impacted by cost overruns and material disruption which resulted in significant revenue and earnings reduction."
In this context, I understand significant revenue reduction due to inability to deliver parts of project quiickly enough due to labour shortages and material supply issues. I understand the earnings reduction as part of what you delivered, you delivered at higher costs due to inflation.
What I don't understand is how they delivered and billed some $28 million of services (my interpretation of credit losses of $28 million they are talking about in the Accounts Receivalbe note) to the high rise multi-residential buildings and those customers are not going to pay the bill. Can't put some kind of a lien on the assets which clearly must be worth a lot? Construction industry not making money and declaring bankruptcies as well? From what I understand, there is a residential shortage and nobody sees their prices coming down in all the talk about affordability. So, how does KNR lose money or not collect for what it provided to probably large construction companies that are most likely still doing very well? There is a specific meaning to "accounts receivable" and having so much deemed uncollectible during the 4th quarter raises some good questions, which I clearly do not get from all the disclosure - someone please chime in if know the answer.
A piece related to ARs: "The timing of revenue recognition, billings, and cash collections results in accounts receivable, unbilled revenues, contract assets, and deferred revenue (contract liabilities) in the consolidated statements of financial position. Amounts are typically invoiced as work progresses in accordance with agreed-upon contractual terms, either at periodic intervals or when contractual milestones are achieved. Receivables represent amounts due from customers: accounts receivable consist of invoiced amounts,and unbilled receivables consist of work in progress that has not yet been invoiced. Contract assets represent unbilled amounts where the right to payment is subject to more than the passage of time and includes performance-based incentives and services provided ahead of agreed contractual milestones. Contract assets are transferred to receivables when the right to consideration becomes unconditional. Deferred revenue (contract liabilities) represents amounts that have been invoiced but not yet recognized as revenue, including advance payments and billings in excess of revenue. Deferred revenue is recognized as revenue when (or as) the Company performs under the contract."
I see the other board putting on a brave face with portraying yesterday's call as a good one. Nice try IMO: the bad stuff is real, but the good stuff is trust PG and loaded with hope into the optimistic statements. Heard all the good things about BioCloud all along. Then they stopped saying anything and year or whatever later you hear that it was a dudd and had no chance once vaccines were being rolled out, years ago. But I am sure many will at least pretend to be excited by a patent when it comes. I wonder what a patent is worth for something that even the company cannot speak of how it will be used going forward and independent HC validation that it does what KNR says it does was never obtained (OK, Covid is not the thing anymore, but what happened to the Japanese application for detecting influenza....one of dozens of questions never answered. But I think all the questions are effectively answered by shifting to BioWater, which has tons of existing detection competition already in use.)
Looking forward to YY's assessment to try to offer a counter-balance. I am guessing he'll take shots at me because it would be even more foolish to try to address viewpoints reasonably supported by facts.
I think our market cap is somewhere around $20 million. Shareholder equity or technically-improper NVA some refer to is now negative. Looking forward to the changing spin why it will be a no-brainer to buy at whatever level, now that this particular argument is no longer valid. We'll see what the turbulent early part of the week wil bring. But it doesn't matter, we all knew that it will take a long time to substantially recover our BC losses, if ever.
GLTUA