Mr. Michel was appointed as CEO 20 months ago with much fanfare. He has presided over the company during unquestionably the industry’s most explosive growth. The market has grown by 70% each of the last two years.
However, if you looked at the annual (and the last several quarterlies) closely, you will notice some disturbing trends.
Revenues
For the first time in company history equipment leasing revenues were down for two consecutive quarters (the last two quarters)
Equipment leasing revenues were down for 4 of the 6 quarter’s Peter’s been CEO. In the 13 quarters prior to his appointment, they were down only once (1st quarter of 2004)
Over the last 18 months, equipment leasing revenues have grown at about an annual compounded rate of 7% compared to 70% for the industry as a whole. This is the lowest growth rate in the company’s history over any 18 month period.
4th quarter equipment leasing revenues were at the lowest level since the 1st quarter.
Total revenues were lower for each of the 6 quarter’s Peter has been CEO than they were for the last quarter Tom Wharton was CEO.
Expenses
Expenses were higher for every quarter since Peter was appointed than any quarter in the company’s history (except 1st quarter 2004 when the company took significant write-offs)
In the 6 quarters prior to his appointment, the total expense/total revenue ratio had never been above 1.7. Since his appointment, it’s been below 1.7 only two out of six quarters. It’s been almost 2.0 the last two quarters.
Net Loss
Net loss hovered around $1.0 million for each of the last 6 quarter prior to his appointment. It has not been below $1.3 million under Peter, and for the last two quarters of 2007, it was well over $2.0 million each quarter.
Stock price
On the day Peter was appointed, the stock closed at $2.40. Today, it is trading at $.45, a price 81% lower.
The 81% loss in shareholder value is the worst in company history. Of the 4 prior CEO’s (while the company was publicly traded), Jim Stark was next worst at 51% loss in shareholder value.
Prior to Peter’s appointment, the stock price had never traded below $1.20 and never closed below $1.30. Today it is trading at $.45, 65% below its previous low.
The stock trading volume is at its lowest level since a reverse stock split in 2005.That can be blamed on Pete and the owrthless IR firm. |
