NSI. -g- I will assume this discussion is about NSI and not a collateral skirmish among people of the SUNW wars of '96 onward, so I will contribute my NSI opinion:
From what I understand, company is nearly debt-free. It plans to have an "initial" dividend at an annual rate of .04. Expected '02 earnings, per company, if I remember correctly, .15-20. Stock is selling at @$2.11.
It's those "other liabilities" related to the dread word ASBESTOS.
"During the fiscal year ended August 31, 2001, the Company was served with approximately 30,000 claims and settled approximately 16,000 claims for an for an average of approximately $1,035 per claim..."
At this point, if someone hasn't just said, "fuhgeddaboutit" and moved on to another stock, I will add:
It appears to me that there may be about 22,000 open pending claims as of Oct. 2001. There's an estimated $113M accrual liability for asbestos claims. There's a $95M accrual (or liability offset) somewhere in the balance sheet for $$ that NSI expects to get from insurers for claims paid and "pending and future claims to be paid through 2004".
I tried to see at what price the management was granted NSI options. I couldn't find that info. Looks like past options were prorated based on stock price on first trading day. Not sure.
Looks like Mr. Hattox, CFO, got a nice deal. Apparently his bosses agreed with the "independent compensation consultant" who said his 122,000 options of past couple of years were worth "by the Black-Scholes value at the time of the exchange election" at about $8. So the agreeable Mr. Hattox cancelled those options in exchange for the cash -- about $988,000. An astute decision! Since the stock actually reached its high of $2.68 on its first trading day, and it's been mostly downhill from there, I guess Mr Hattox has gotta love Black-Scholes and "independent compensation consultants" !!
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NSI has had a very good record for increases in income, earnings per share, and dividends. Alas, that all seems to be very, very much in the past.
Paul Senior
I am considering selling my long-time position. |
