Hi GJC,
I hope you can help me with something. I'm asking you since you had a recent conversation with the company and did an excellent job of summarizing your findings. Since I am a numbers man, I spent a lot of time going over the company assets in the past and have satisfied myself on that question. Now, I am totally confused with regard to the number of outstanding shares in this company. Since that was one of the questions you addressed, perhaps you have the information I need.
Here is the problem I hope you can help with:
In the February 3rd news release, the company stated earnings of .0475 cents per share based on 20,328,043 shares outstanding. Fine. However, in their 10-12g, as of 9/30/96 they present this information:
Common Stock - $.001 Par Value
Authorized 31,955,555
Issued and Outstanding 21,348,356
So now we have a million more shares as of September than was used for earnings calculations at the end of December. To further add to the confusion, your post 2212 stated the following as you summarized your conversation:
On Shares:
20.5m shares issued and outstanding, 19m shares restricted, 1.8m free floating confirmed.
The numbers don't add (19 plus 1.8) to 20.5 but it's yet another number to digest.
Now, in the fourth quarter, they announced the purchase of 40% of Motorsports Travel Center, 100% of Muzzleloading Technologies and 45% of CyberDirect. Did they purchase these companies with additional stock? We know they did not have the cash for these purchases so it had to be additions to their debt load or more stock issued. Do you happen to know which it was from your conversation?
My concern is whether or not they are diluting the stock. This is important since it directly affects future earnings. It would appear that the most recent earnings were overstated somewhat (the difference between the 20.3-million in their news release and the 21.3-million in their financial statement.) If many more shares are outstanding, it changes the stated earnings picture and is dilutive for future earnings.
Many thanks for any help you can give.
Al |
