Balance Sheet Comparisons .....
What follows is a comparison of FAMH's balance sheet as presented in
the press release vs. the "audited" balance sheets of ROMC and ASGN,
two company's that Ira mentioned in a previous press release. A few
line items seem to be missing from FAMH's.
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1997
(IN 000'S)
ASSETS ROMC FAMH ASGN
Current Assets:
Cash $ 77,946 2,815 18,339
Short-term investments 47 -- 5,370
Trade receivables 35,475 863 15,215
Notes receivable 109 -- 67
Rec's from related parties 233 --
Deferred tax asset 352 -- 1 ,218
Income tax receivable -- -- 111
Prepaid expenses 1637 213 679
--------------------------------------------
Total current assets 115,799 3,892 40,999
Notes rec from franchisees 4 -- --
Rec's from related parties 1,290 -- --
Deferred tax asset 310 -- --
Furniture and equipment, net 8,206 163 2,572
Other assets 4,878 1,875 --
Worker's comp restricted dep -- -- 596
Goodwill 66,652 -- --
------------------------------------------------
Total assets $197,139 5,930 44,864
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Acc'ts payable
/other liabilities $ 2,680 83 2,549
Accrued payroll costs 7,227 -- 3,043
Current portion of
capital lease obligations 731 -- --
Current portion of
payables to related parties 4,265 356 --
Income taxes payable 3,396 -- --
--------------------------------------------
Total current liabilities 18,299 439 5,592
Capital lease obligations 1,260 -- --
Payables to related parties 1,375 -- --
Other long-term liabilities 2,525 76 --
--------------------------------------------
Total liabilities 23,459 515 5,592
Shareholders' Equity:
Common stock, $0.01 par; 299 210 107
shares authorized, 100,000 -- 25,000
issued and outstanding 29,863 -- 10,727
Additional paid-in capital 152,188 2,734 12,099
Stock subscriptions rec -- -- --
Retained earnings 22,118 2,471 27,072
Less reacquired shares (925) -- --
Cum foreign currency adj -- -- (6)
----------------------------------------------
Total shareholders' equity 173,680 5,415 39,272
---------------------------------------------
Total liabilities and
shareholders' equity $197,139 5,930 44,864
Some accounting comparisons follows:
1) Current assets per share at the end of 1997 would break down as follows
(assuming 21,000,000 shares for FAMH)
ROMC = $3.88
FAMH = 0.19
ASGN = 3.82
2) Current liabilities per share (FAMH shows no accrued payroll costs, but
this should prove inmaterial)
ROMC = $0.61
FAMH = 0.02
ASGN = 0.52
3) Current ratio = (current assets)/(current liabilities)
(higher is better)
ROMC = 6.3
FAMH = 8.9
ASGN = 7.3
4) Shareholder's equity per share
ROMC = $5.82
FAMH = 0.26
ASGN = 3.66
5) Current stock price
ROMC = $27.81
FAMH = 0.38
ASGN = 33.13
6) Ratio of stockholder's equity to stock price (higher is better)
ROMC = 0.21
FAMH = 0.68
ASGN = 0.11
This tells us that FAMH is 3-6 times cheaper (as far as stockholder value goes) than
these two competitors.
7) Price/Earnings (PE)
Note 12 month trailing sales for ROMC is $213.8M (EPS = $0.51) and ASGN is $112.8M
(EPS = $0.83) and FAMH (1997) $21M? (EPS = $0.11).
The competitors sales figures are in-line with the released pro-formas showing us
where Ira wants to take the "new" going forward Firamada.
ROMC = 55
FAMH = 3
ASGN = 40
If FAMH could achieve even a 20 PE, then we should have at a minimum a $2.20 stock
(without Myriad).
While this analysis is cursory in nature and non-exhaustive in its scope, it does
gives us an indication that FAMH is IMO "undervalued" and should be able to
attract more investors as sales and earnings live up to expectations.
A good LONG stock. This company will give the "investor" a solid return IMO.
Enjoy your FAMH,
WINK ;>)
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