Hi Jaime,
The writedown was in the fourth quarter, and included some items (such as refurbishing inventory) that probably should have been written off much earlier. It appears that with the quarter already being so poor, that there was a bit of "take a bath" accounting in evidence.
The first quarter concludes today, and as the company's press release indicated, the San Diego operation will be approximately breakeven for the period. That breakeven comes despite the expenditure of approximately $1 million in certification expenses. Conference call participants also know that production was 50% higher in the first quarter than in the fourth quarter.
They are, in fact, "operationally current", if by that you mean they are breaking even on existing levels of business. I don't think anyone knows clearly how rapidly they will be able to squeeze costs out of the manufacturing process, but it is obvious that they have returned the facility to breakeven on existing levels of production (roughly $3 million per month in sales).
Government products and ITS are currently in the black, and both should easily set records this year for pretax profits.
Government products revenues will approximate $45 million, and ITS revenues will approximate $30 million.
For next year, those divisions will have revenues of about $60 million and $50 million, respectively.
In short, I think that a "turnaround" will be in evidence with the publication of the second quarter numbers.
As for the converts, it isn't clear to me what you are asking. Can you be more specific?
Regards. |
