Steves call to company at may 27.
Jens, please post this to SI. It is important updated information on some older topics. Thanks!
Steve alias SSPARSONS@AOL.COM
I gave the company a call today for the first time since buying the stock last November. In my conversation with a gentleman named Joe, I got some interesting information that may catch some of you by surprise. It was a very entertaining discussion which lasted a good 20-25 minutes. Let me share with all of you my discussion:
1. First Quarter Financials will be filed in the near future. The company has promised that they will file with the SEC on a quarter to quarter basis. They intend on continuing to be a full reporting company and to follow the rules of the SEC.
2. The company has every intention on being as diverse as possible. They acknowledged their success with the Hydro deals but they also like their other business strategies which are currently in the works...(Joint Ventures or JV's, other construction projects, etc). In other words, this will not be a Hydro build only company...they understand that diversification is important.
3. Licenses are pending with regard to an old topic from a year ago (building materials). No deals have currently been made but they are under negotiation.
4. With regard to some of the older projects, I asked about the Navajo project which was announced last September 15. This project is not dead but there have been no updates since last fall. The belief is that a deal can still be made but nothing significant has changed since September...hence, the reason for no new press releases on this topic.
5. The St. Lucia deal for $34 million is also not dead. No updates have been given since the last press release in August '97. The last announcement stated that the project was in the final stages of financing . The lending institution had required additional documents from the land owner in order to secure a clean title to the property. This was a requirement from St. Lucia...a closing date may still arise.
6. The Letter of Intent announced last October is also not dead. The signed Letter of Intent to have ARET act as project managers at a Missouri resort valued between $90-$120 million is still a possibility. I questioned the monetary amount but Joe said it is factual...it is truly within a range of revenue between $90-$120 million for ARET if this comes through. However, it appears that this project may be on the back burner for a while. I was notified that a major portion of the financing was coming from Asian financial interests but due to the financial crisis in that part of the world, nothing has materialized. Still, it is nice to know that they may someday grab this deal...it is truly a huge contract if they secure it.
7. The big news is with Fluor...there are THREE contracts pending with Fluor:
a) Foundation Package plant expansion for a US household products manufacturing unit which was announced back in September. Value of this project: $5-$12 million.
b) On that same project, another bid was submitted to construct a Utility building. This was announced back on September 23. Value of this project: $5-$9 million.
c) The recent announcement back on April 16. ARET announced that Tomahawk and Dunn Industrial submitted a design/build expansion with Fluor in the range of $17-$25 million. Joe informed me that an announcement should be coming shortly that Dunn and Tomahawk are in final negotiations with one of the first two projects announced last September. Remember...these two projects were the height of our concern back in January when we thought they were going to make an announcement pertaining to the winner of those contracts. I am surprised that we continue to be in the running for those deals. In all honesty, I thought this latest announcement was the only deal outstanding as I thought it was a combination of the earlier projects announced. However, this announcement in April is totally separate than the first two...this is OUTSTANDING news.
Joe made a very interesting point in wrapping up my discussion. He mentioned that the company is making a lot more money on the Hydro projects because ARET is going solo on those as opposed to the Fluor deals. Joe did not understand why investors were so hyped up about the Fluor deals but I told him that Fluor is a recognizable name in the investment community that common folks like myself relate to. He told me that the Hydro deals are a pure revenue making machine that ARET takes in all by itself as opposed to the Fluor deals. To me, winning any contract is tremendous because it adds to the stability of the organization. Joe was a very nice person to talk to. He acknowledged that talking to me was a good change of pace because I had a lot of facts prior to back up my discussion with him. He liked the fact that I knew which contracts had already been signed and which were on the backburner and he really got into the discussion. He complemented me on my knowledge of the company and I guess that is the best complement I can get from anyone directly involved with their organization.
In closing, I hope my message brings to light some of the older factors presently being undertaken by the Corporation. If I hear more news, I will keep you all posted.
Steve alias SSPARSONS
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