From FLGator, over on the Raging Bull board:
By: UFGator
Reply To: 1480 by tobyz
Friday, 7 Jan 2000 at 10:35 AM EST
Post # of 1482
My understanding is that Fritz is now working for an investment banking group that is raising money for ETPI. He is
no longer acting as I.R. contact for ETPI.
As far as what's going on lately, I think there will be several significant changes in store for us in the coming weeks
which should restore confidence and value in the company. I've heard a few rumblings, haven't spoken with Doug
Butcher for a long time so I don't know if or how much of this is accurate.
From what I can gleen, ETPI is finally returning their focus to the profitable portion of the business that they excel
at, which is the NiteLife/Performance S&L portion of the business. They have been draining money from that
business to keep the Stargate and Redfish Management divisions afloat (Hero's, waterpark, Chacho's and
Redfish). From what I'm hearing, the company may be spinning off or merging the Stargate/Redfish divisions into
a different company, leaving the core profitable Nitelife/PS&L/ VisionQuest divisions with ETPI. The spinoff may
result in ETPI shareholders getting shares of the company it mergers/spins-off into, but I don't know if that's for
certain and I don't know any details.
If all goes as planned, then ETPI would have greatly improved their cash flow by eliminating the negative cash flow
from the game centers, restaurants, and waterpark. Those entities can still be successful, but have a much better
chance with another company that is in that line of business that can leverage the resources better than ETPI,
which was just dabbling in them. The waterpark was great when it's open, but ETPI just doesn't have the leverage
necessary to carry a park like that year-round when it's not open. The seasonality of the game rooms and
restaurants was also hurting the company. The only profitable constants were the core businesses they are
keeping.
All this should shore up the income statement, as it will improve cash flow, greatly reduce depreciation (which was
killing them on the quarterly reports), and enable the company to have a good chance to reach their $0.05 eps
target for year 2000.
The drawback is that with all this restructuring, I would expect that they would take a sizeable hit in the 4th quarter
1999 filing to take as many charges as they could to spin off a clean company and start fresh with their core
NiteLife/PS&L/VisionQuest company. Anyone looking for a profitable 4th quarter will probably be disappointed.
Anyone looking for profitability in year 2000 should be encouraged.
Anyway, that's what I'm hearing. A lot of speculation and supposition, hopefully we'll be hearing something more
concrete soon. If someone else is hearing anything, please post for all to see. I'll try to give Doug a call at some
point and see if I can get more details, but there's always a chance that he won't be able to discuss details.
Gator
Disclaimer: I have received 10,000 shares of ETPI stock in exchange for providing various consulting services to
the company. |
