FGH Snap-Shot Review
Shares Outstanding: 39,972,844 (As of March 20, 2000)
Stockholders' equity (SE)... $248,121,000.00 @ 12/31/99
BOOK VALUE: $6.21 ($248,121,000.00 SE/39,972,844 outstanding shares)
BACKLOG:
"As of December 31, 1999, the Company's backlog was approximately $689.1 million, approximately 73% of which management expects to be performed within the 12 months ending December 31, 2000."
Note: $242.0 million in new & revised contracts have been announced this quarter. Since the Company expects to work off approximately $125.76 million per quarter ($689.1*73%/4); current backlog (@3/31/00) can be guesstimated as $805.34 million PLUS the approximate $100 million in maintenance & repair business NOT counted in the backlog.
$905 million divided by 39.97 million shares = $22.64 of WORK per share of common stock.
CASH FLOW & WORKING CAPITAL:
"The Company believes that cash generated from operations, including the collection of recoverable income taxes, ($38.7 million at December 31, 1999), the settlement of certain recoverable contract claims, and funds available under the New Credit Facility will be sufficient to fund its requirements for working capital (including contract losses), capital expenditures, and other capital needs for at least the next 12 months and to remain in compliance with the new loan covenants."
Comment: The foregoing suggests there is plenty of work under contract to support the company UNTIL orders for newbuilds begin to emerge and the liquidity to satisfy requirements until none-strategic assets can be liquidated, resulting in a gradual reduction of debt and an increase in working capital.
PROBLEM CONTRACTS:
Ocean Rig, - The agreement reached in January extends delivery dates to Oct 31, 2000 & Dec 31, 2000.
Petrodrill - The agreement (subject to approval by MARAD & the respective boards) reached this month,
extends delivery dates for these two units until August 1, 2001 & Nov 1, 2001.
Comment: With these major disputes laid to rest and with the controversial Millennium S.A. contract removed from backlog, it appears answers have now been provided for the major PROBLEMS clouding the Company in recent months.
EMPLOYEES:
"The Company's workforce varies based on the level of ongoing fabrication activity at any particular time. As of December 31, 1999, the Company had approximately 9,860 employees, including 9,242 in the United States, 229 in Canada and 389 in France. Total workforce included contract labor of approximately 1,077 employees at December 31, 1999."
Comment: Back in November Mr Hastings, FGH/IR said the Company had about 9000 employees plus approximately 1000 contract labor. From the above, it can be seen that rumors of company hiring can now be confirmed.
JL HOLLOWAY :
"OUR CHAIRMAN AND CHIEF EXECUTIVE OFFICER BENEFICIALLY OWNS APPROXIMATELY 26% OF THE OUTSTANDING COMMON STOCK OF THE COMPANY; THIS COULD DISCOURAGE OTHER COMPANIES FROM ATTEMPTING TO ACQUIRE US."
(39,972,844 shares of Common Stock) * 26% = 10,392,939 shares.
"The Chairman of the board of directors and Chief Executive Officer of Friede Goldman Halter, J. L. Holloway, beneficially owns approximately 26% of the outstanding shares of Common Stock of Friede Goldman Halter. Mr. Holloway has entered into a stockholder's agreement which will restrict his ability to dispose of these shares. The size of Mr. Holloway's holdings and the restrictions contained in the stockholder's agreement could also delay, defer or prevent a change in control or the removal of existing management."
POTENTIAL BUSINESS:
DOUBLE HULL: "OPA '90. Demand for double hull carriers has been created by the Oil and Pollution Act of 1990 ("OPA '90"), which generally requires U.S. and foreign vessels carrying fuel and certain other hazardous cargoes and entering U.S. ports to have double hulls by 2015. OPA '90 established a phase-out schedule that began January 1, 1995 for all existing single hull vessels based on the vessel's age and gross tonnage. The Company estimates that OPA '90 will require 66 barges engaged in domestic trade to be retrofitted or replaced by 2005 and another 22 such barges to be retrofitted or replaced by 2010."
Link to full report, (courtesy of Khalil): freeedgar.com
Current Technical Info:
50DMA 6.3 (Slowly trending UP since hitting ALL TIME low of 6.24 on Mar 23, 2000)
100DMA 7.04 (First Resistance level?. Penetrated yesterday & today. A CLOSE above this line will establish this level as Primary SUPPORT and the 50DMA as Final Support)
200 DMA 9.47 (Final technical resistance just below anticipated psychological resistance @10) I EXPECT BOTH to become SUPPORT LEVELs within a few weeks.
Good Luck
SargeK
Note: Slider "The "K" raised more questions than answers for me. Potential for 50% move in either direction still exists." Message 13321692
Comment: I think the 100% to 200% Upside potential significantly out weigh the possible downside of only 10%. The 50DMA has proven to be very resilient SUPPORT EVEN before the annual was released, when uncertainty & anxiety ruled supreme!
K |
