| To: mark s who wrote (52) | 4/8/1997 8:46:00 PM | | From: Thomas Kundrat | | | |
I am hearing that the plant would be open in 60 days & that production would begin shortly after that. Did Mr McMillian state that production would begin this month?
If so are there any contracts in place for the product?
Seems like a huge potential if the patented polymer is as good as claimed.
Any idea when the audit would be complete?
Any plans for a plant in the U.S.? |
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| To: Thomas Kundrat who wrote (54) | 4/22/1997 10:56:00 PM | | From: mark s | | | |
Thomas,
I haven't heard of the recall of stock, but I did hear of the possibility of an additional stock offering. The funds from this sale would likely be used for operating or capital expenses, which are needed until a positive cash flow is established. The number of proposed shares was 2 million. This would dilute the E/P/S by about 20% when revenues are realized, but considering the undervalued stock price and the stocks potential, I'm not too concerned.
Mark S |
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| To: MCorbley who wrote (56) | 4/24/1997 11:51:00 PM | | From: mark s | | | |
Michael,
Thanks for the info. Here's my take on the info provided. I would guess the share cancellation would be viewed as a positive, since there would be 18% fewer outstanding shares to dilute earnings. I would assume that since they mentioned the share cancellation in this news release that they are seriously considering taking this action. Therefore, I'd expect an announcement about end of April. Maybe May.
The news regarding the revised financial statements is also a good thing in my opinion. This company needs to put the past behind, and move on. Once the audited statements are published everyone will be able to get a feel of revenues, earnings, growth, etc.
It's good to see that they've retained an investor relations services.
This should help spread awareness amoung the investment community. If the growth follows, as I think it will, the stock price will adjust accordingly.
All in all, this information followed very closely with what McMillian told me in earlier communications. This reinforces my confidence in his honesty. Looks like he's doing the right things to me.
Mark S |
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| To: mark s who wrote (57) | 4/29/1997 3:55:00 PM | | From: David Wideman | | | |
Mark & all,
Excerpts from a Broker/Analyst News Update published by Windward
Communications on Jan. 7, 1997:
11/29/96 - then Stratford President, Mr. Arthur Smith and his spouse &
associate Board member, Ms. Lee Monaco, were removed from their respective
offices by a vote of a majority of Stratford's shareholders.
Roy McMillan was sole remaining Board member. (Per Tom @ ICC, McMillan
had previously been asked to join Board to lend it credibility. When he
came on board, he realized that Smith/Monaco were out of control, hence
the shareholder decision to remove them & retain McMillan.)
Brief bio of current Directors:
Mr. Roy A. McMillan - President & Chairman
Established & managed the Canadian Economic Assistance Program in English-
speaking Africa.
Then served 3 years on Board of Executive Directors of the World Bank.
Since 1989, McMillan has served as Advisor, Finance for the Canadian
International Development Agency; Advisor, project development & project
finance for Ontarion Hydro Int'l ($100M investment in Peru electricity)
in 1993-94; and established a company in Atlanta, now under negotiation for
sale, which holds patents for innovative designs for Nuclear Spent Fuel
Containment.
Mr. Douglas S. Friedenberg (45)
Has been President of Firebird Capital Management, a financial advisory
firm, since 1993. From 1991 to March, 1993, serves as President of Unicorn
Capital Management, an investment firm. From 1983 to 1991, he was an investment
manager at Morgan Stanley. Freidenberg also serves as Director of Datametrics
Corporation.
Mr. G. Collin Rayner (58)
Received law degree from Osgoode Hall in 1964.
He is corporate counsel for the Bank of Montreal and has a number of
business interests. He is the owner of Ternagami Wilderness Center, a
world renowned outdoor recreation facility.
On December 30, 1996, the company announced that an agreement had been
reached with Smith & Monaco whereby they relinquished all claim to further
involvement in Stratford, and all claims against the new directors & officers.
The new team has committed to expand the Board to 5 members as soon as possible.
NOW FOR THE FUN PART - $$$
From the same publication by Windward -
For starters - years 1 & 2:
<<With a first year production capacity of 9M pounds of additive, mgt.
believes that a realistic sales expectation for first year is 4M pounds. . .
Revenue expectations for the first year would then be $16M . . .
Management believes that the net margins may exceed 25% based on initial
analysis of production costs & requirements. Management further believes that if
market acceptance follows current indications, sales may double in the following
year. These statements are based on management's conservative revenue projections.>>
And by the fifth year (2001, I guess):
<< . . . NocaCrete managament believes it can capture 10% of this market,
or $250M per annum by the fifth year.>>
Now, just for kicks, get out your calculator and figure:
$250M @ 25% divided by 8.6M shares x PE of 20 = too good to even think about.
Of course, "the proof is in the pudding" & manufacturing faciltiy isn't
even open yet. Management sounds like they're taking the conservative
approach to things, so it may take awhile for this one to develop.
Until I hear something to the contrary of the above, think I'll just hide &
watch, let McMillan & Co. do their thing. I hope they do it well.
Hope this helps,
David |
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| To: David Wideman who wrote (58) | 4/29/1997 4:50:00 PM | | From: MCorbley | | | |
David
Thank you for the excellent information. Does anyone know: Does year 1 refer to a time beginning about 60 days from now as mentioned earlier in this thread when the plant begins functioning? Does this also mean that the company is currently not producing any Novacrete? Are they still planning to generate additional revenue by licensing the "recipe" to other companies?
Michael |
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| To: MCorbley who wrote (59) | 4/30/1997 11:53:00 AM | | From: David Wideman | | | |
Michael,
Some answers, to the best of my knowledge:
<<Does year 1 refer to a time beginning about 60 days from now as
mentioned earlier in this thread when the plant begins functioning?>>
Year 1 = fiscal year from June97 - May98.
<<Does this also mean that the company is currently not producing any Novacrete?>>
Correct. Plant should be completed by early June, with production to begin
shortly thereafter.
Evidently, prior management had the technology but resorted to hyping vs.
actually manufacturing/selling. Opening of manufacturing facility represents
fresh start.
On one hand, it's easy to say that this fresh start is from "Ground Zero".
However, we do have a few inherent advantages, including what sounds like superior
technology & A-1 management. Although previous announcements - $200K revenue from a
licensing agreement, $900K licensing agreement w/Phillipine co., $4M profit from
joint venture in Greece - are not valid (per Greg @ ICC - "Throw all of the old
press releases in the trash can"), I would think that these acqaintances are still
in place. With new management & pre-existing product awareness, thoughts/hopes
are that we'll be able to "hit the ground running".
<<Are they still planning to generate additional revenue by
licensing the "recipe" to other companies?>>
Although the marketing plan will probably change under new management,
it would seem that the company would continue to utilize some sort of
licensing agreement. IMHO, revenue projections contain all revenue sources,
whether product sales or licenses.
More FUN WITH #'s (from a conservative? standpoint):
From Year 1 projections on report posted on yesterday's report -
Revenues: $16M Assume $10M
Net margin: 25% Assume 10%
EPS (8.6M shares): $.465 $.116
With a EPS of $.116 and a PE of 20, stock price = $2.32 (a 4+ bagger in
one year).
Note: If company shows that it has anywhere near the potential to increase
revenue to $250M by year 5 (as stated in report), market should value stock
at significantly greater than PE of 20 (maybe 40, 50, 60?)
Hoping the best is yet to come,
David |
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| To: David Wideman who wrote (60) | 5/9/1997 11:52:00 AM | | From: MCorbley | | | |
David
I liked your analysis of the earnings potential. However, I imagine that there must be substantial costs involved in finishing the plant and bringing it "on-line." How would you think those costs would affect the earnings projections? Will all the costs end up as long-term debt on the balance sheet. Will there be large "one-time charges" against earnings for the first few years?
Michael |
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| To: MCorbley who wrote (61) | 5/9/1997 12:56:00 PM | | From: David Wideman | | | |
Michael,
All are good questions; sorry I don't have good answers, only IMHO's
(CAUTION: IMHO's can be hazardous to one's financial health!).
I'm not sure that start-up costs will be unbearably "substantial",
i.e. shouldn't take a "GM-sized" factory to reach Year 1 projection of
4M pounds (on a capacity of 9M pounds). My guess is that the facility
will not be much of a sight to behold; just another "concrete plant".
Also, I'm "assuming" (another DANGER sign) that management has built
these start-up costs into projections. Take into consideration that
the article I pulled #'s from (I think it was Windward Communications?)
may not have the same credibilty as a BUY recommendation from Merrill
Lynch, but it's all I've got to go on.
My reasons for being LONG on HARD for a LONG time (that's the plan, anyway):
1. NEW management
2. REAL product
3. GIGANTIC market
4. Investor Communications Co. - No, a company's investor relations firm is
probably not one of the greatest reasons to buy a stock, but I've grown to
trust Mark, Tom, Greg and the gang at ICC. I think ZMAX, GOAE & HARD have
tremendous potential.
From its current market cap of about $4M, I see nothing but great things
ahead. I hope I'm as smart as I sometimes think.
Have a good day,
David |
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