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8.6 Mil shares outstanding, 5.6 mil in the float
Book Value (mrq) $1.38
Earnings (ttm) $0.70
Sales (ttm) $13.34
Cash (mrq) $0.32
Valuation Ratios
Price/Book (mrq) 2.15
Price/Earnings (ttm) 4.25
Price/Sales (ttm) 0.22
OVERVIEW
In November 1998 the Company adopted a strategic plan to dispose of all industrial service and environmental companies with
the goal of revitalizing the Company. The Company has entered into an exclusive agreement with a group of insurance
executives to explore strategic opportunities in the insurance industry. Management is engaged in preliminary negotiations with
several acquisition prospects, however no agreements have been finalized.
The implementation of this strategy began on November 30, 1998 when the Company sold the assets and transferred the
liabilities of J.L. Manta, Inc. ("Manta") to Kenny Industrial Services, L.L.C., for $23,000,000 consisting of a combination of
$3,000,000 of cash, a short term note of $15,000,000 which was paid December 15, 1998 and $5,000,000 in separate notes
at an interest rate of 5.0%. The cost of the transaction was $6,531,950.
The second step was completed on December 31, 1998 when the Company sold the assets and transferred the liabilities of
P.W. Stephens Residential, Inc. ("P.W. Residential") to American Temporary Sanitation, Inc. for $2,400,000, consisting of
$1,004,000 in cash and a five year promissory note for $1,396,000 payable quarterly through 2004, together with interest at
the Prime Rate plus 2.5% per annum. Furthermore, the company has received letters of interest from various organizations
interested in acquiring P.W. Stephens, Inc. ("P.W. St. Louis"), however no agreements have been finalized.
RESULTS OF OPERATIONS:
General
The Company currently operates primarily in the environmental remediation services industry through its P.W. St. Louis
subsidiary. The other services formerly provided by the Company have been classified as discontinued operations in the
accompanying financial statements. The following discussion and analysis relate to the Company's continuing operations.
Historically, second quarter results are lower than other quarters due to the effects of inclement weather on the environmental
remediation services industry. The results of operations for the six months ended March 31, 1999 are not necessarily indicative
of results of operations to be expected for the full year.
Revenue
Revenue during the three and six months ended March 31, 1999 decreased to $2.5 million and $17.6 million, respectively, from
$10.6 million and $21.0 million for the same periods in 1998. This decrease was caused by the sale of the assets of P.W.
Residential and Manta late in calendar 1998. The second quarter revenues for 1999, derived solely from P.W. St. Louis,
represent a significant increase over its second quarter 1998 revenues of $1.0 million, resulting from successful efforts to expand
its customer base.
Selling, General and Administrative Expenses (SG&A)
SG&A during the three and six months ended March 31, 1999 decreased to $514,000 and $2.7 million, respectively, from
$2.1 million and $4.0 million for the same periods in 1998. This decrease resulted from the elimination of expenses attributed to
the former operations of P.W. Residential and Manta, and the consolidation of job duties at the Company.
Other Income
Other income during the three and six months ended March 31, 1999 of approximately $106,000 represents interest earned on
notes receivable advanced by the Company.
Net Income
Net income during the three and six months ended March 31, 1999, increased to $39,000 and $3.7 million, respectively, from
$5,753 and $262,000 for the same periods in 1998. This increase was attributed to the gain realized from the sale of the assets
of P.W. Residential and Manta late in calendar 1998.
Liquidity and Capital Resources:
The Company believes that the proceeds from the sale of assets, the cash flows from the existing operations of P. W. St. Louis
coupled with the financing arrangements the Company currently has in place will be sufficient throughout the next twelve months
to finance its working capital needs, planned capital expenditures, debt service and the outstanding obligations from the
Company's discontinued operations. Implementation of the Company's strategic plan of expanding into another line of business
may require additional capital.
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