RE:RE:RE:RE:RE:Absolute Software Now An "Absolute Joke"NLMoose wrote: If you have a TD Investments account and viewed your events for the November 7 - 13 period, Absolute Software had an estimated 5 cents Earnings Per Share.
However, when they released the results, their EPS was off by a whopping 20 cents a share at -15 cents per share.
Absolute Software are now paying the price for not properly looking after their bottom line (profit) as well as their top line (sales) as their share price has now plummeted to 52 week low levels as opposed to achieving their optimum price of $23.00 a share.
I know this is an older post, but I was taking a look at their financials.
For Q4 2021, they had net $9M in transaction costs related to the acquisition of NetMotion (net of income tax credit, around $7M). Without that, they would have showed a net profit higher than the previous quater.
In Q1 2022, they still had costs from acquisition transaction. They adjusted acquired deferred revenue down $4.6M and had $3.4M in transaction costs. That said, they still wouldn't have made a profit due to increased amortization and depreciation charges (+5M) and due to interest costs for the acquisition (+5.1M). Overall, adjusting for the write-down on acquired deferred revenue, transaction costs and the impact of income tax, their loss for Q1 2022 would have been around (2M).
That said, once the working capital situation normalizes, that they stop incurring charges for the transaction costs and provided they are done writing down the fair value of acquired deferred revenue, they will have positive cash flows to apply to the debt to lower their interest charges. So, they will eventually go back to black and in time their earnings will show significant improvement compared to FY 2020.
There is execution risk involved though and it may take a bit of time before they surpass the FY 2020 earnings, so the stock weakness may not go away for a bit.