RE:AGMMy post from earlier today on Google.
Much of the same patter...pure-play ITS, positive market environment, technology based competitive advantages at ETC and IRD, anticipated low double digit growth growth in ITS businesses. Investors can choose to take this as a vote of confidence in the strategy or inaction in the face of poor financial results. I'm guessing that those still in the stock are in the former camp and expect that execution is a problem that is being strongly addressed.
Therefore, my interest was largely in those areas touching on execution:
- Financial improvement - there couldn't have been stronger signals that financial improvement is on the horizon. An additional $1.5M in cost savings identified; total YTD of $5.5M in annual cost savings. A glimpse into the financial improvement landscape may come as early as Wednesday; I'll be surprised and disappointed if there isn't some evidence of progress in this area on the Q1 call, even against a backdrop of expected poor overall results.
- Strategic review - progressing at its own pace. Strong reminder that Wilan has contributed significantly to the ITS rollout and affirmation that the IP monetization business will continue to contribute until an acceptable valuation is realized. There will not be a fire sale in a imprudent rush to become a pure play ITS company. Good to hear!
- CEO impact on the stock price - JG actually said the CEO selection could affect the stock price...while not the primary search objective, but certainly a wish, suggesting that ITS credentials could play a significant role in selecting the CEO. A signal that a heavy hitter would be a positive.
- Additional Board appointments - there will be additions; the CEO for one. Possibly others with ITS specific experience and market cred. No hint as to the next Chairman; Rusty Lewis as the lead independent director is an obvious choice, but the fact that this was not addressed may point to an external choice. Something to keep an eye on.
What wasn't focused: revenue. There was a passing mention of the $500M USD backlog and the early passing reference to expected low double digit growth in the ITS businesses. There was focus on the long term nature and size of ETC contracts in the two case studies and the business growth potential from additional IRD products within its existing customer base in the other two case studies. No mention of expansion of ETC-tech based tolling outside the USA. No mention of a land and expand growth strategy...a positive imho. No mention of M&A. The clear message , from those items that were virtually ignored, is that focus on these will have to wait until management and investors believe the profitability dragon has been slayed.
See y'all on Wednesday.