Bruce, some responses...
>In fact, the reasons were babbled and almost incomprehensible.
I agree that they were not dynamic in their responses, yet the
responses seemed comprehensible.
>"Mobilization of contracts" was one reason given. Now WHAT does that
mean--contracts which they didn't get?
I'm guessing that they use "completed contract accounting" to
recognize revenue on large construction contracts [I believe this
is common]. Anyway, with this type of contract, one can only
recognize revenue as work is done on the contract. Thus failure
to get going, "mobilize", would delay the recognition of revenue.
>After all, it's been over three months ago that they knew that these contracts weren't "mobilized" in the 4th quarter.
Even if ECGOF had started the contracts, C&L may have required them to
hold back some revenue, i.e. only recognize a proportion of the revenue accrued by the completed contract accounting. As I said before I think C&L may have thrown them for a loop. Of course, this
could not be said on the conference call, they couldn't cast any
doubt on their auditors.
>WHY weren't they mobilized--that may be important info also, but of course was not provided.
Maybe delays in signing? Maybe shortage of workers? Who knows?
>are we really expected to believe that this
came as a surprise to them and they just discovered it in the last week?
Agreed, this had to have been known before --- the only surprise could
have been how C&L ruled, and they could have been debating it for
weeks.
>No post which I read even came close to mentioning/accusing a conspiracy,
One has to believe with a C&L audit, which I'm sure was through since
this is their first C&L audit, there is no conspiracy.
>I am long on this stock, but that doesn't mean that management can't be criticized.
I agree. However, if you really don't believe in the management then
you should indeed sell your stock poste haste.
Regards,
Michael
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