CONFERENCE CALL NOTES (MINE)
There were several items of interest...first, it was nice not to have Smith Barney around. Next, I was disappointed not to hear DLJ on the call, but Oppenheimer asked questions (I believe for the first time). It would be nice to get some additional exposure (of course with 12mil shares outstanding, it may be difficult). All of the analysts heard on the call seemed VERY upbeat about the qtr....as well they should be. Sorry if any of this seems confusing or jumbled, but I wouldn't make a very good secretary!
Some highlights:
-Intl sales 67mil vs. 47mil
-Gross profit declined again... 16.9% vs. 17.7%, attributed to inclusion of Prospect for the first full qtr, increase of the construction group in the mix and low margins in the manufactured good group. the thought was that these items would remedy themselves over the next couple of qtrs.
-G&A reduced significantly--very impressive and should remain in the 8.5 - 9 range.
-large increase in interest rate expense--attributed to debt occurred during acquisitions. See paying that down in the future.
-high receivables--due to Prospect as contractors were holding back payments. these payments have begun and should be used to pay down the above debt and should leave the company with strong free cash flow in the 12-18 month range.
-48% debt to capitalization-should be reduced in coming qtrs.
-Revenues increased 37%
-Bahrain showed small profit for the qtr ($4,000), and should slow in march, but will be strong in april and may.
-integration of Prospect-major expense reductions taking place, and should see benefit from the european exposure in the future.
-one of the acquisitions over the qtr, a S.American piping co., sounded very promising, as it was mentioned that the bidding activity was especially strong in S.A.
-Solid US power mkt with new opportunities which haven't been seen in years....
-booked 12 China pwr plant contracts--should begin to be reflected in Q4...and currently bidding new contracts.
-pricing continues to improve in almost all mkts.
If you have any questions, I'd be happy to address them. I'm sure the analysts on the call will have further info available later today and tomorrow. For the record, I'm a partner in a small money management and investment advisory firm in atlanta. I'm not recommending anyone buy, sell or hold given the info i've posted. Further, I own shares of SGR for clients as well as myself.
regards,
greg |
