August 19
Questions for the conference call:
Here are some of my questions. Do you have any? a transcript of answers from the conference call will be posted. ENJOY!
Business Breakout:
Business prospects for Actrade International's export business (Airconditioners & Refrigeration). What change in sales and profits is planned for next year? Asia & Russia, discuss any effects? How much capital does this unit use and what are the returns. Does it make sense to spin this off? What is profit contribution?
Actrade S.A.: How will this division keep growing? Will overhead stay as low as it has been? How closely will it work with Actrade Forefaiting. Are some or most SG&A expenses out of New York? What products are being traded? How is trade financing secured? How are deals originated? What are the prospects for this business. Gross margins, net margins?
Capital: How many A/E's are selling the program? How many are producing? What are plans for building distribution? More regional offices? More done from New York. In the 10-K it says that: During fiscal 1998, Capital developed a new marketing and promotional approach specifically designed to reach these large companies by educating them as the various ways that using TAD's can increase sales, lower their current collection costs and reduce delinquent customer accounts.
Is there now more of an emphasis on Large customers versus medium and small businesses? How is the program marketed? What about nation-wide marketing. How much is planned for marketing?
What has been the retention and turnover of your salesforce?
Discuss the length of sales cycle. Have any large customers dropped out of the TAD Program? Is pricing an issue?
What have been the successes and struggles in sales and marketing this year. What do you foresee for this coming year?
Do you expect similar sales and profitability growth next year as this past year. If so, where will it come from?
How many brokers does Actrade have in its network. How is broker development progressing?
What percentage of full payout TADs are being sold as opposed to the original product of 25% reserve TAD?
What are the main industries being sold too?
Are TADs being marketed as a tool to credit collection agencies?
Discuss the opening and closing of regional offices this year.
Where are most of your TAD sales coming from? Typcal transaction size? Customer size. Typical buyer or signator of TADs?
Credit issues: What is the default rate? In total for the past year, how much in TADs were not paid. Discuss when you do not place insurance on a TAD, what protection is put in place. Is Actrade developing its own scoring system? What is the percentage of bounced TADs. What is the average time outstanding on TADs now. More than 90 days?
How many people in your credit department. What is their potential capacity to handle new business? What is the typical turn-around time on customer approvals?
Forfaiting:
In fiscal 1998, the Company formed Actrade Forfaiting, Inc. ("Forfaiting"), a Bahamian corporation, for the purpose of developing and marketing similar innovative financial services for international companies.
Who will run this operation? What are the expected operational costs. How is business originated? How is the TAD different than other tools in the market for trade finance? Discuss insurance, credit protection.
The Bahamian Bank that is uninsured as all foreign banks usually are-What are the risks and protections?
Walk us through a typical origination and transaction. What do you expect gross and net profits will be? What will be the range in pricing? Discuss a transaction that falls through and the buyer/seller goes out of business.
If growth is rapid, what other staff and infrastructure will need to be added. How is this program marketed?
Will Actrade plan to have an offshore bank for the future?
How will your foreign operations change your tax rate in the future?
Financials
Note 11 in the financial statement discusses TADs receivable, bank:
Walk us through this note on by explaining how this effects the income statement and balance sheet step by step.
Discuss the retention of TADs with your own capital versus selling off TADs. How does this effect your gross and net profit margins, returns to capital etc.
Some large US banks have approached Actrade to purchase TADs. What would be the rate? Would they charge more than Actrade is currently being charged.
Discuss the appointment of Deloitte & Touche as auditors for your offshore sub. Are you happy with them. Do you plan to hire them next year to do your full audit. How much more will it cost?
Overall:
What are your biggest difficulties? What could you be doing better?
Full payout TAD-What percentage of sales. How many sales people are not yet at full capacity.
Do you foresee a need to raise capital in the next twelve months? What if your sales tripled?
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