Latest Contra TakeI was able to borrow a copy of the latest Contra newsletter and here is what they had to say about Analysts:
Elmer Baldwin, a gentleman quoted here before, recently stated that Analysts International's restructuring is now finished. He further suggested--and this was novel--that growth is in the cards. Famous last words, perhaps, as the former CEO/president has been shown the door. We's put our faith in Elmer, given his track record. Lo and behold, that confidence was not rewarded.
What now? The new suit in his suite belongs to Andrew Borgstrom, and quite frankly, he's not inspiring. In a further reshuffling, a new chair was plucked from the board, while the old chair was relagated to director status. Rearranging the deck chairs doesn't excite us, either. Nasdaq has notified the company that it's in danger of being delisted. It has until March to get its stock back to the buck level, where it hasn't spent an extended stretch sicne October '08, or else....um, or else it can appeal and get a six-month extension. Sheesh!
Revenues continue to shrivel, down 51% year over year. While some of this was by design as low-margin buisness was exited, the bulk of was due to the normal course of affaris. the loss swelled to $4 million, only a quarter of which comprised one-time costs.
About the only postive we see is that a $15 million credit facility that doesn't expire until September 2012 has been arranged, giving this cash-poor bunch some financial breathing room. However, at the end of the day, this enterprise is a shadow of the one we purchased. Plus, with the Nasdaq guillotine hanging in the air, the risk-reward ratio has been skewed. therefore, the company is being demoted from a Buy to a Hold.