Pipe Dream or Delayed Gratification?
Still no profit for window-tint maker, shareholders told
(just thought I'd get this on the record, bold portions at my discretion...)
newsday.com
By Mark Harrington
STAFF WRITER
June 18, 2002
One hundred of perhaps the most patient shareholders in the Nasdaq market displayed only mild agita last week as "smart window" developer Research Frontiers Inc. again postponed a long-elusive profit.
At its annual shareholders' meeting at the Fox Hollow Country Club on Thursday, the Woodbury-based company whose technology allows windows to electronically darken said it expects a full-year profit in 2003. The 37-year-old company, which has reported annual losses for all of its 15 years as a public company, had hinted last year at the possibility of a fourth-quarter profit.
(Whoops, Q4'02 won't be profitable now! Score another one for Wexler!)
Robert Saxe, chairman and chief executive, largely appeased shareholders with word of new marketing programs, advances at the single factory making smart-window film, and hints at deals with large potential customers. He also pointed to the silver lining of carry-forward losses: "Hopefully, it'll be a long time before we have to pay taxes," he told investors. (The company lost $4.4 million last year on revenue of approximately $126,000.)
(Oh, that Saxe, what a cut-up...)
"I haven't got much patience any more," said Walter Lucker, a retiree from Middlebrook, N.Y., who sparred boisterously with Saxe during the two-hour meeting.
He was frequently the lone voice of dissent, however. Confident of the company's "huge potential," Eugene Sukonick, an investor from Philadelphia, expressed only measured frustration at the company's progress, which is "six months behind where I thought we'd be." He said he wishes the company had more manufacturers on board than SPD Inc., which is using a proprietary method to make film at a small factory in South Korea.
So Young Kim, a representative for SPD Systems Inc., a division of SPD Inc. that distributes the products, in Plantation, Fla., said in advance of the meeting that the manufacturer had worked through a "streaking" problem with early samples of the SPD film. Now, she said, the company is taking orders, mostly for samples, in "small quantities." Because they are expensive ($1,400 for a 24-inch by 36-inch skylight window) it's a niche market, she said. The windows require a constant electrical source to remain clear, and require specialized installation.
Meanwhile, Research Frontiers continues to battle with a vocal investor group that is working to drive down the stock price. Earlier this month, Manuel Asensio, chief executive of Asensio & Co., sent a letter to Research Frontiers' board of directors taking the company to task.
"Our opinion is that [Research Frontiers] has no valuable technology, that the alleged products have no sales or earnings potential that remotely approximate management's claims, and that [the company's] sole activity is the perpetuation of a fraudulent micro-cap promotion," the short seller wrote. Asensio's efforts have met with only mixed results: yesterday, Research Frontiers' shares were up as high as $13.90 before closing at $13.07, up 77 cents for the day.
At the shareholders' meeting, Saxe and president Joseph Harary took sharp aim at their short-selling rival, portraying him as "desperate" but unable to unwind his position because the stock hasn't fallen enough.
The best way to defeat the short sellers, Saxe said, "would be for the general market to increase its buying of our shares."
(No, the best way is to build a self-sustaining business, and then, if the shorts won't go away, buy back your own shares of stock using the profits! Oh, but first you have to have profits...)
The company left enough subtle hints about current and future deals to spur such efforts.
When one shareholder asked Saxe about General Motors' possible interest, the chairman said, "Big auto companies like to keep things confidential. I think I should leave it at that."
(Before someone brings up Mercedes-Benz...)
Research Frontiers hasn't announced any agreement with GM. |
