Richard, I was expecting more flak for a negative post. I haven't checked my Email yet though. Now you want details. OK, but I suspect this will be a lengthly post.
Let,s get our Pallet Annual Report. You do have it don't you?
page 1) Pallet goes on acquisition trail. Corner the pallet market in North America.
page 12) Pallet doesn't have enough money, several deals fall through. Cost $835,000 to renege on deals.(page 26)
page 12) Pallet issue warrants offering - investors file an action against PLT- PLT returns money to investors. huh!
page 12) Pallet can't pay for IPC deal - Sell IPC back to original owners for a loss of 1.8 million.
page 13) Were the companies that PLT did acquire profitable? "Operating performance far below expectations:"
page 13) "Overhead Cost ...". Pay someone at least 1.8 million to get them into this mess. Some of which went to a law firm in which a Company director is a senior partner. $446.000 in 1996 and $424.000 in 1995 (page 27).
page 21) Business Acquisitions "The excess of acquisition cost over the aggregate fair market value of the acquired net identifiable assets is recorded as goodwill." Goodwill is listed at 25 million. For non profitable and operations subsequently closed down. Cum on.
page 26) "Restructuring ..." Closing down operations just purchased at a cost of 1.3 million.
Back to page 1+2) Well that was a good idea that didn't work, let's try something else. By the way the companies we aquired were profitable before we bought them. Huh!
You get the idea. If you go throught the reports critically, you'll probably find more red flags.
So who was running the show?
page 15) Co-founder Terrence M. Lynch steps down from his position as Chairman and Chief Executive Officer and the board. A new managment team is put in place. No mention of the parties in the new management. We note on page 28 that Mr. Douglas Moore is listed on the Board of Directors as the President and Chief Executive Officer and also under the Officers he is listed as President and Chief Executive Officer.
Curious, Sept 27/96 news release
"Mr. David Hill, Chief Executive Officer and co-founder of Pallet Pallet Inc. commented on the Comany's financial results.[snip] Reconizing the urgent need to put the company back on the right track, Pallet Pallet's Board of Directors appointed an entirely new management team in April 1996."
"Mr Douglas Moore, who has more than 16 years of experience in the pallet business, was appointed President and Chief Operating officer. [snip] I am very comfortable with Mr. Moore's sound management philosophy and the excellent steps he and his experienced team of managers are taking. As a result, I've recommended that Mr. Moore be appointed Chief Executive Officer to replace me, effective September 30, 1996, and the Company's Board of Directors has approved my recommendation. I will stay on the board as Deputy Chairman.[snip]"
Now you might to read through these last two paragraphs a couple of times to get the names and positions straight. I never did. You might want to go back and look at who held what position in fiscal 95.
FYI the fiscal year end was May 31/96 but the report was signed by Douglas Moore on Sept.30/96. This adds to the confussion.
I've heard around here there are a lot of people with a saw and air nailer willing to build pallets in their garage for $6.00 apiece. I would expect a company would have to be fully automated to compete with that. What do I see the report, a picture of a couple of guys, one with a saws and the other with an air nailer. In one of their quarterly reports they mention hurting from competive pricing.
This is getting off track and this post is already too long. Later. |
