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Technology Stocks : Allen-Vanguard Rescue Board
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To: kidl who wrote (202)9/20/2009 12:41:43 PM
From: tennessee_jed1 Recommendation   of 724
 
The wording in the press release is suspect.

The question is why were the intangibles tested at Q3, not at say Q2 or Q4? The revenues from the Med-Eng acquisition have never met expectations. Did the decline in revenue become so significant in Q3 that there was a 'trigger' that forced the revaluation? If so, management must have sufficient documentation to backup this claim. Luxton has claimed all along that the problem with the company has been due to the 'timing' of orders. Is he now claiming that there will essentially be no orders? Did it go from lumpy orders to no orders?

Additionally, calculating the fair value of the intangibles requires many estimates regarding expected future revenues from the underlying assets. Management must have documentation (such as communication with customers regarding potential orders, or lack thereof) that the expected FUTURE revenues from Med-Eng are significantly lower than the last time they tested.

Also, remember that in all of this impairment testing, there must have been auditors who OK'd the writedowns.

Also, the only way that there is nothing left for shareholders is if total obligations exceed assets. This was only the case after the writedowns in Q3.

What if AV wins an 'unexpected' order in a couple of months? That would imply that the intangible assets were written down too far, and that there was shareholder value at the time of the Versa transaction. Also, any reference to the 'Made in America' program is bogus because that only applies to stimulus spending. I don't think the $800 billion in stimulus spending included defense.
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