Everytime I look...I'm looking at it again.
They get net earnings for 2007 of 2 million, and with 130 million shares that actually works out to 1.5c per share, not 3c. They are using 108 million shares and that works out to 1.9c/share.
They say adjusted EPS, adjusted for stock base compensation, amortization of intangible assets and future income tax benefits.
So, if you take the 3.7 million and only take off interest and their tax estimate you get 3.3 million and 3 cents per share, and if you divide it by the actual 130 million shares you get 2.6c.
I was just looking at page 31 of the analyst report and they believe that Versatile will pay back all of its outstanding debt this year. In the table below it shows their full year projection of interest payment of 0.3 million ($300 thousand), and the 6 months interest paid so far is $175 thousand, or 58% of their projection.
Chit... In my efforts to verify how good the analyst's projection that they will have a strong enough cash position to pay off their debt, well, at June 30th current assets were $16,587,844 and at Dec. 31 they were $16,617,563, an increase of about 30K or 0.2%.
Ok, so they say that one of those two quarters reported in the 6 months is typically their weakest. Cash is up, 4 fold, from about 100k to 400k. They need cash to repay that 4.1 million of debt the analyst projects that they can do. That not quite 10% of the way...
This $2.7 million dollar note that is repayable has moved from the longer term debts to the current liabilities, as has a 175,000 term loan. This means the current liabilities have increased by $2.6 million, or 16%, but total liabilities have decreased by 450,000 or 2.3%.
So, they have $2.1 million from the April warrants coming in, and another $0.5 million from some August warrants, essentially new equity, and I can see where that is spent already. You gotta love this reference to "strong financial position" (page 31 analyst's report) and the implying that they can pay off that debt from cash flow. Reading analyst's report truly gave no indication that they aren't paying this debt back from the operations of the business and they imply it is coming from cash flow from the actual business and not new equity.
My goodness, and what pretty graph on that page... Look at the change in cash flow position, from -8.1 million in 2005 to +9.5 million in 2008. It sure give the impression this company is going to make a lot of money. Problem is that first two years of change in debt is taken care of by equity issue or convertible debentures.
So for the move from debt of $8.1 million to $4.1 million there was that $3 million debenture and more share dilution. I'm finding it difficult to figure out where all of the "strong cash flow" came from, but from the 2006 annual report they have the balance of shares at 97.4 million. There are so many notes on different placement...
Item | 2007E | 6 mos 2007 | Difference |
Revenue | | | |
Mobile & IT | 65.31 | | |
Kiosks | 4.39 | | |
SyncSeer | 1.17 | | |
AutoStore | .17 | | |
Total Revenue | 71.03 | 31.65 | 39.38 |
| | | |
Gross Profit | | | |
Mobile & IT | 14.04 | | |
Kiosks | 1.75 | | |
SyncSeer | .82 | | |
AutoStore | .12 | | |
Total Gross Profit | 16.73 | 6.93 | 9.8 |
Operating Expenses | | | |
General and Admin | 4.50 | 2.16 | 2.34 |
Sales and Market | 6.88 | 3.34 | 3.54 |
Research and Develop | 1.64 | .47 | 1.17 |
Total Operating Exp | 13.01 | 5.97 | 7.05 |
Net Earn/Loss BOI | 3.71 | 0.96 | 2.75 |
Interest | .30 | .17 | .13 |
Amortise & Deprec | 1.00 | .63 | .37 |
Stock Compensation | 0.20 | .16 | .04 |
Net Earn/loss BIT | 2.21 | 00 | 2.21 |
Current Tax Exp | -.06 | -.05 | -.01 |
Future Tax Benefit | -.18 | .38 | .56 |
Net Earn/Loss | 1.97 | .32 | 1.65 |
Adjusted EPS | .03 | 0.00 | .03 |