RE:RE:RE:RE:RE:RE:Not much happeningbober2 wrote: Inviolabispirit, you're talking about $10 million by the end of their finacial year which will be when. So net income will be $15.6 million. You address share buy, cutting their operating expenses and getting their balance sheet in order but you never once talk about the number of shares outstanding. Is that something to worry about in the future.
I believe Heritage's financial year ends in October. The NCIB (i.e. share buyback) does start to address the number of outstanding shares. At this low share price it may be worth knocking off a few of those shares. Without insider information on the current sales I couldn't tell you if that looks like a good plan at this time. I don't know what their projected sales will be for the remainder of the year. Clearly, insiders would have a far better understanding of this as they fill the orders and receive the payments. This is why they make the decisions.
I'm just basing this on the fact that Heritage is now a profitable company and if that is continuing to be the case then they have cash to do a number of different things to improve shareholder value. Perhaps paying down long-term debt is a far better use of any additional cash. Having a clean balance sheet makes this company look far more attractive to institutional investors.
If the revenue is very strong and continues to grow then the current outstanding shares are not a huge concern at this time, but at some point the company may r/s. If they buy back shares it reduces the ratio of a possible split down the road. But I don't see the company doing a r/s at this price, as they just reached profitability. With profits the share price can certainly move up from here. Also, as a profitable company they shouldn't need to go back to the institutions for additional financing in the future in order to keep operations flowing, so this can also reduce the ratio of that r/s should it ever occur. Instead of 1-for-10 or something like that, with a need to dilute again for additional financing, the company would only need to do 1-for-5 max or even 1-for-3, as they shouldn't need any more financing and therefore no need to do any more dilutions.
I know shareholders certainly don't want to hear or talk about r/s's, but at some point it may happen, I just can't see it happening at this share price when the company is profitable. It just seems like it would be a waste of a r/s when the company can easily grow the share price from here. Keep in mind that Heritage diluted shares to make acqusitions and grow the company, there is certainly a big difference in adding growth and revenue to the company through dilution as opposed to diluting shares and spending the money from a financing just to keep the lights on. Clearly those acquisitions for Heritage are starting to pay off.
I am thinking this is more of what you wanted to discuss.