4Q98 -- looks like we may see 4Q98 numbers by the third week of March. the accountants are at ULTR now, and after legal review, we can hope for numbers by the end of the week beginning march 22.
net income from Talon will be shown under "other income." essentially, ULTR will be able to take credit for 18.9% of Talon's net income for three quarters. i suspect this will amount to at least a few cents per share for ULTR (it was already $0.014 eps as of 3Q98). it looks fairly certain to me that ULTR will exercise its right to the 51% of Talon in the near term (maybe coextensive with the 4Q98 earnings release -- if ULTR is true to form). this may take the sting out of the 4Q98 numbers, which no doubt will not come close to netting out the $0.27 loss from the first three quarters. right now, i'd just hope we get to the $0.10-0.15 range.
once ULTR acquires 51% of Talon, it will report consolidated info. re Talon (showing the totals, and then netting out the 49% minority share). if all goes well, i could see Talon contributing signicantly to the bottom line for ULTR in '99 (e.g., $0.05-0.15 eps, maybe even more). this will be good, because right now it does not seem that ULTR is getting any credit in the marketplace for its interest in Talon. conservatively speaking, ULTR's current rights to Talon should be worth $2-3 per share. given this, why is ULTR trading at $2.5, when it alone has a book value of over $3 per share. seems to me this company is worth $5-6 per share if it's worth a dime.
i would still predict that we'll see a significant increase in ULTR share values in the middle of this year and perhaps quite dramatic increase by the end of the year. at that point, ULTR will end up buying the rest of Talon with ULTR shares valued considerably higher than today, and we'll be off to the races for the year 2000. as usual, i'm seeing the rosey scenario; but i think there truly is little down side risk from where we are and significant upside potential. |
