COPY of Transscript of Inteview
SOURCE:
stockadviser.com.
Tuesday April 14, 1998
Brian Tarbell : Hello Everyone. I would like to introduce Mr. John Regan, Chairman & CEO of PDG Environmental. Mr. Regan, thank you for joining us today. Could you please let everyone know what your company does.
John Regan : Our company is an environmental remediation company specializing in asbestos and lead paint abatement.
MearK : Mr. Regan, what is your company doing to convert its enormous backlog into actual revenues? Do you have any expansion plans?
John Regan : We are working off our contracts on the schedule that is required. We expect to reduce our backlog by the end of the first quarter.
Tenfold : Having teamed up with Phillip on your Diplomat project, do you forsee future projects with them. Could there be the potential of a buyout by Phillip?
John Regan : The Diplomat project went extremely well and the Harrisburg project is also doing very well. We hope there is additional projects with Phillips in the future.
PDGE Shareholder : What potential do you see in the Las Vegas area & when fo you expect to see the results?
John Regan : There are still a lot of demolition of older properties proposed for Vegas. We have just received our Nevada License approval by the Board. We expect project opportunities to materialize in the near future.
MearK : What steps do you still need to take to get relisted with the NASDAQ SmallCap market? When do you see this occuring?
John Regan : Listing requirements for NASDAQ small cap are $4 million in capital and a $4 share price. One of the goals for this year is to be re-listed on NASDAQ SmallCap by the end of the year.
Tenfold : How did you get started working with Phillip on these projects. Did they contact you or did you contact them? Can you estimate what this relationship will be worth?
John Regan : We have had a close working relationship with the Phillip abatement team in Houston for several years. The Harrisburg project was the first successful joint bid that we have had. I don't know what the future will bring with additional work with Phillip.
Richman : PDG Environmental seems undervalued in my opinion. What can you do, or have done, to help increase awareness of PDG?
John Regan : Our biggest problem with getting exposure is our Bulletin Board status. Our investor relations firm TKO is working dilligently to get additional exposure through newsletters such as the Stock Adviser.
Tenfold : A few weeks ago, PDG jumped up on its earnings report. Then it experienced a major sell-off without any news. What caused this?
John Regan : If I could predict why stocks move the way they do, I would not be working for a living.
PDGE Shareholder : Are you planning on expanding into other geographical areas?
John Regan : We expanded into the southwestern region in early December with our acquisition of ACEC. At the present time, the only major market that we do not have covered with a branch office is California and the mid-west (Chicago). We are evaluating potential expansion into those areas now.
BM : Can you have incremental earnings increases (eps) for the next 4 qtrs?
John Regan : We do not make specific earnings projections, but with our current backlog and status of our on-going projects, we expect to continue the trend that was established over the last 4 quarters.
Richman : How many market makers foes PDG have? How do you increase this number, is it beneficial to have a lot?
John Regan : I believe we have 8 to 10 current market makers. It is beneficial ro have active market makers for stock liquidity.
canvas10 : Is PDG looking into any other markets?
John Regan : With markets, I am assuming you mean other areas of business, not geographic markets. Asbestos abatement does of course have a finite life, but we expect the market to be good for the next 4 to 7 years. We need to investigate other business opportunities prior to the asbestos market beginning to turn down. We are doing that now as a part of our long-range plans. We expect PDG to be around for a long time.
BM : Do you think by making earnings projections this will give you more coverage by analysts (wall st)?
John Regan : I don't believe making earnings estimates will increase coverage by analysts.
PDGE Shareholder : Are you planning on any other interviews or appearances to help advertise your company?
John Regan : We are scheduled to be published in the Wall Street Corporate Reporter sometime in May. TKO continues to get additional newsletter coverage.
BM : What will be the maximum number of shares (including possible dilution) outstanding this coming year?
John Regan : The number of shares outstanding will depend on the number of options and warrants that are exercised during the year. We cannot predict how many that will be. The earnings per share for year end was based on fully diluted shares outstanding which was 8.2 million. The actual shares outstanding is approximately 6.5 million.
BM : What are the number of warrants outstanding?
John Regan : The S-3 Filing that is currently awaiting approval by the SEC is for approximately 850,000 shares, which includes nearly all outstanding warrants.
sanford : In PDGE's operating markets, what type of market share (percentage) does the company have?
John Regan : The asbestos industry is very fragmented. The largest abatement contractor has less than 4% of the total market. Our market share in various locations is difficult to estimate accurately, but we believe that in all of our markets we have in the range of 5 to 20% market share.
Richman : What is an S-3 Filing and I guess I don't understand your answer to that question.
John Regan : An S-3 Filing registers the stock that underlies the warrants. Our former lender Drummond Financial was issued warrants in conjunction with financings that were done 4 or 5 years ago. The warrants have an average exercise price of approximately $1.10 which if exercised will generate approximately $900,000 in additional capital for PDG. This will help get our capial to the $4 million level required for NASDAQ Small Cap re-listing.
BM : Can you replenish the backlog as fast as you use it, so fiscal year ending yr. 2000 revenues can match this upcoming great year?
John Regan : We are working very hard at continuing the trends that were established over the past 4 quarters. We hope to be able to continue to record substantial growth in the future.
BP : How would PDGE view potential takeovers either as aggressor or as a target?
John Regan : I have not heard of any takeover rumours, has anyone else?
OROSS : Why is this company stock price depressed when the fundamentals are so strong? What is your proposal to get this stock price up so that you can list on NASDAQ?
John Regan : The current stock price is obviously very frustrating to us. Trading at a PE multiple of about 1/2 of the environmental industry is something we cannot explain particularly with a growth rate of 50%. We are concentrating on continuing to post improved revenues and profits and hopefully the stock will begin to trade based on fundamentals.
broker : Is there anything we should know that we don't know?
John Regan : Everything of any substance is already public information. The outlook for the coming year is extremely bright based on our significant backlog and work in progress. Unfortunately, we are limited in what we can say about prospects but everything is positive.
broker : How many shares are there, all total?
John Regan : There are 6.5 million shares outstanding and 8.2 million shares on a fully diluted basis.
BP : What would your realistic hope be for a stock price at the end of 1998?
John Regan : As I stated previously, one of our goals for 1998 is to be re-listed on NASDAQ SmallCap which requires a $4 share price. We are working very hard to achieve that goal.
OROSS : Are you planning to increase your services and product line by purchasing other companies?
John Regan : There are many acquisition opportunites in the asbestos industry that would diversify our operations geographically. When attractive opportunities are identified, we will pursue them.
MNola1 : What is the status of the legal action against PDGE?
John Regan : The shareholder suit against PDG Remediation in which PDGE was named as an additional defendant is proceeding very slowly. The courts have ordered that all discovery be completed by July 31, 1998.
trc33 : John, will the $12 million contract in Harrisburg completing in June potentially cause your first six months revenues to double?
John Regan : The Harrisburg contract is approximately $12 million of which approximately $2 million was booked last year. We expect that the $10 million in revenue will be booked in the first two quarters and will obviously increase revenues substantially and possibly even double those of last year.
broker : is the legal action if there is one, the reason for the stock not moving ahead?
John Regan : The shareholder suit may have some minor effect on the stock price, but we do not feel that our potential exposure is such that it should have a significant effect.
Brian Tarbell : If there are no more questions, I would like to thank Mr. Regan for being our guest today. Mr. Regan, is there anything else you would like to add?
John Regan : Thanks for everyone's support and hopefully the stock will start trading ar levels consisten with our financial performance. |
