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Non-Tech : SPIN-OFFS "secret hiding places of stock market profits"
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To: Paul Senior who wrote (1065)4/3/2007 9:15:31 PM
From: Stewart Whitman  Read Replies (1) of 1185
 
I don't think I would pay what's being asked. Haven't decided what price I would buy at. Here are my notes, mostly taken from the proxy statement:

137.9 million shares of our common stock, 139.5 diluted.

Year ending June 30, 2006: EPS $0.85 ($0.84 diluted).

Six Months Ended December 31, 2006: EPS $0.35 ($0.34 diluted). Book value of $1.72. But large about of goodwill (> $3/share).

Historical revenue growth has been about 10% from 2002 to 2006.

24% of our revenues from five clients.

Problems with proxy business - moving to internet, away from paper. Large clients terminating business, sometimes due to acquisition ($40 million in Securities Processing Solutions and Clearing and Outsourcing Solutions services). A client of our Investor Communication Solutions business segment, that was one of our five largest clients in fiscal 2006, has notified us that it will not renew its contract for account statement processing and distribution services with us, which has already expired. However, we will continue to provide this client with proxy distribution and related services. In fiscal 2006, this client generated $44.8 million of revenues with respect to the services being terminated.

Summary - difficult business with segments in transition, small moat, low growth. May also dependant on stock market activity.

Regards,
Stew
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