RE:RE:RE:RE:EPS up 100%You got to love how these guys massage the numbers. A little bit of financial engineering perhaps?
They paid over $8MM for AgJunction from Mark and ended up declaring a $1.6MM gain on its sale for $2.4MM? lol Gee, I wonder what that goodwill and intangible writeoff was the quarter before? It's quite mislieading if you ask me.
During the second quarter they experienced their lowest revenues in quite some time AND lost money in the process.
The true book value of the company is now: $26.7MM net tangible assets divided by 72MM shares outstanding which is approx. $0.37. Of that $0.37 approximately $0.16, or half, is attributable to INVENTORY. Sadly, when they have their inventory writedowns in subsequent quarters (and they will) the inherent value of this company will decrease accordingly.
Add to this the merger costs and expenditures due to integration of the two businesses coupled with more writedowns and overlaps, we're looking at a tangible book value of much less. I wouldn't be surprised to see this company trade at around 10 cents per share which I now calculate to be its true inherent value.
Moreover, we can expect a 1:5 reverse split to get the share count back to around 25MM befitting a combined company with approx. $50MM in annual revenues. With luck, post reverse-split they'll hit that dollar mark again but it's doubtful at this time. They may even do a lower ratiod reverse-split to get the share price higher for subsequent financing which may be required post integration. The future remains precarious with this company, especially regarding shareholder ROI.
JJ