WTHL**DD**Classic Corporate Turnaround- taken from RB
Stalking the corporate turnaround can pay some of the largest dividends to patient investors. A truly special situation where the individual can beat big money and professionally managed institutions to the punch, earning substantial profits as the rest of the market moves to make a valuation. In all the markets, investors will be smarter about selecting stocks. They will choose companies with real profits, excellent future profit potential and no other scenario offers more rewarding gains.
Tempting Turnaround Companies, Important Variables to Assess.
-Consider the financial viability of the troubled company.
-Who are the major creditors and stockholders, they assume a pivotal role in the success or failure.
-Assess the likelihood that company earnings can make a successful comeback.
-Examine management and what restructuring strategies it?s taking to correct the situation.
-They must be profitable or attain profitability in the future.
-They must have multiple revenue streams.
-They must have alliances with leaders in their field.
-They must have visionary leadership that is executing their market plan with precision.
-They must continue to expand rapidly into growing markets.
-Did I mention that they must be profitable?
Case in point?
WHITEHALL ENTERPRISES, INC. (Ticker: WTHL)
801 Brickell Avenue, 9th Floor Miami, FL 33131 Luis Alvarez, President
Tom Biggs, Investor Relations 904-409-0200
A growth oriented holding company targeting business acquisitions which will contribute a diversified asset base for the company.
AT A GLANCE
On Feb 1, 2000 the company announced its first profitable year to date. WTHL has attained profitability with a huge 71 Million dollar carry-forward Tax Write off to its advantage. These numbers add immensely to its bottom line every year. On Aug 13, 1999 Whitehall received formal approval from the NASD to commence trading on the OTC Bulletin Board. It is only very recently a turnaround coming out of bankruptcy, a new company and relatively unknown to investors. WTHL management holds a vast shareholder interest in the company and has the most to gain by increasing value. Earnings have already made a successful comeback and future earnings look spectacular.
Recent acquisitions include Alternative Lending Group (http://www.alternativelending.com), an E-Finance Company involved in Mortgage, Credit card and auto loans via the internet. ALG?s monetary and time saving capabilities go far beyond what normal brick and mortar finance companies can offer in an untapped internet E-Finance market and is currently expanding operations from 9 to 29 states. ALG also recently announced that it has completed the acquisition of Direct Financial, LLC, a Michigan mortgage broker/lender. The Direct Financial acquisition will increase ALG's annual gross mortgage originations from $93.5 million to $250 million. On 1/27/00 Whitehall announced it has recently signed a multi-tiered portal marketing agreement with America Online's (AOL) Digital City.
WTHL is also currently working on the upcoming acquisition of C & M Oil Company, Inc. a Citgo supplier that has grown its sales from $6 million in 1990 to over $12 million in 1998 and $15 million in 1999. We should see closure during May 2000. With the recent mergers of Mobil-Exxon, and Amoco-BP Oil, the South Florida market presents a great opportunity for signing up gasoline stations that lose their brand because of the mergers. Furthermore, CITGO's distribution agreement with CMO is not limited to South Florida. This represents an unlimited growth potential consistent with ALG's plans for national expansion.
The Company's plan for growth during the prior fiscal year included the acquisitions of MBM and Hair-biotech (HBI). MBM Limited was Whitehall?s first acquisition. MBM is a Canadian manufacturer of plastics and Responsible for WTHL?s first profitable quarter since inception.
The company has also aquired HBI (Hair-biotech Inc.), a development stage biotechnology company with three unique patents for hair growth and hair loss prevention technologies.
Link to Chart, Filings, and recent Press Releases
bigcharts.com
About the CEO, Luis Alvarez the brains behind it all.
Quoted from the Feb. 2000 10K on file with the SEC at biz.yahoo.com
An enormous amount of time, work, effort, personal and monetary sacrifice was expended by Mr. Alvarez, without any compensation by the Company, from the time of takeover, bankruptcy procedures, reorganization, SEC compliance, trading and acquisitions. The Board concurred that if it was not for Mr. Alvarez's foresight, tenacity and negotiating abilities the former company (Total World Telecommunications) would have never emerged from bankruptcy proceedings. When the former company was forced into Involuntary Chapter Seven Bankruptcy everyone involved with that company (management, board of directors, and creditors) considered this to be the only option. Mr. Alvarez worked diligently with all creditors, private investors and attorneys to come up with a viable reorganization plan. Mr. Alvarez had a strong commitment to two central elements of this plan. One, the plan would insure equity in the reorganized company for its thousands of common shareholders, and two, place the new company in a position to maintain a $71,000,000 plus tax loss carry-forward. Mr. Alvarez' has made the acquisitions necessary for this to come to fruition. Additionally, he has made several more acquisitions and now the Company is a viable entity. At present, Mr. Alvarez is working closely with the Company's Board of Directors on several more acquisitions.
The Alternative Lending Group Acquisition ?
1420 East Missouri, Suite 125 Phoenix, AZ 85014 (Jeffrey Mertz, President)
The Company has completed the $8million acquisition of Alternative Lending Group ("ALG") and all its related assets. alternativelending.com On 1/27/00 WTHL announced that has recently signed a multi-tiered portal marketing agreement with America Online's (AOL) Digital City. "ALG's new alliance with America Online's Digital City will allow the company to dramatically increase its exposure on the Internet almost immediately," said Whitehall President and Chief Executive Officer Luis Alvarez.
In just six years, ALG has grown from a single-city mortgage company based in Chicago - with $38 million first-year gross business - to a mortgage bank, credit card, and auto loan processor covering nine states, with $93,592,399 in actual 1999 gross mortgage loans originated and closed. The company has focused its mortgage origination through a consumer direct marketing channel and has maintained steady growth and profitability by providing mortgage loans to fit all types of consumers' needs. With the added control that mortgage banking status provides, ALG is able to make loans simultaneously profitable and competitive because of the reduction in sales commissions and expenses associated with conventional mortgage brokerage firms.
ALG recently created two new divisions: the Wholesale Division and the Internet Online Mortgage Division. These divisions will help establish the company's national presence and substantially increase gross production over the next 12 months.
Mortgage financing has traditionally been a lengthy ordeal, lasting weeks or sometimes even months. ALG offers the convenience of applying for all types of loans via the Internet. ALG has utilized the Internet as a referral source for the past three years, and has maintained a $2 million monthly average loan volume from its previous website. The company has spent much of the past 10 months developing a new website, Alternativelending.com, and a new business plan for the Internet Online Mortgage Division.
With the launch of its website, ALG plans to increase its market focus from nine states to nationwide, during the next 12 months. Alternativelending.com intends to become the place to shop online for a home loan. ALG will continue its Internet marketing strategy direct to customers and will compete directly with current online leaders E-loan and Mortgage.com to provide a low cost mortgage option to all customers regardless of credit history.
Alternativelending.com allows customers to find a product, choose the rate and costs they want, and apply for a loan, all in about 10 minutes...and from the comfort of their home computer. This feature allows ALG to have more control over its Internet Online Mortgage loans, since they make the determination to approve the customer or supply them with alternative loan products to meet their needs. With other sites, those customers will simply be approved or denied.
ALG is now a mortgage bank and will have more flexibility with pricing, underwriting, closing times/locations and customer communication. ALG will continue to provide more hands-on service to customers who request it, through its traditional offices located in the Midwest and Southwest regions.
With the addition of ALG's Wholesale Division, the company will not only be marketing its Internet Online Mortgages, but also its mortgage banking services to other mortgage brokers. The Wholesale Division has allowed ALG to make every loan more profitable, thus allowing improved customer service and more competitive rates, costs and closing times.
On March 30,2000 ALG announced it now offers Internet consumers the convenience of applying for a Net1Card and The Future Card via the Company's Web site. "This new credit card feature provides yet another avenue through which Alternative Lending can diversify its lending capacity," said Whitehall President and Chief Executive Officer Luis Alvarez.
On Apr 4, 2000 Whitehall announced today that ALG is in partnership with PeopleFirst Finance, LLC (www.peoplefirst.com), offering fast and easy blank check online automobile and motorcycle loans via the Company's www.alternativelending.com Web site. "PeopleFirst literally redefined the auto lending business when it applied Internet technology to the loan process," said Whitehall President and Chief Executive Officer Luis Alvarez. "In 1998, the `Online Banking Report' named PeopleFirst one of the five `Best of the Web' financial innovators and dubbed them the `pioneer of blank check auto lending'. We are pleased to be partnering with PeopleFirst to provide excellent `A' paper credit quality customers with convenient and cost effective auto loans," Alvarez concluded.
Alternative Lending Group has also appointed Michael J. Matney Chief Operating Officer. Prior to joining ALG, Matney served as Vice President of Wholesale Sub-Prime Acquisitions for Bank One Financial Services, Inc., where he was responsible for overseeing 2,000+ units totaling $100+ million in monthly revenue. Matney also served as Bank One's Vice President and Regional Director of Retail Sub-Prime Originations, where he managed seven branches with 55 employees and $125 million in assets. He received Bank One's President's Award in 1994 and 1995 for Branch of the Year. ``The addition of Mr. Matney to our team, who brings eight years of solid experience with one of the largest bankers in the industry, is the next vital step in our strategy to becoming a powerhouse in the online mortgage industry,' said ALG President and Chief Executive Officer R. Jeffrey Mertz.
The Proposed C & M Oil Company Acquisition -
Whitehall recently executed a stock purchase agreement to purchase 100% of the common stock of C & M Oil Company, Inc. ("CMO") and all its related assets.
CMO has been a South Florida distributor of gasoline and oil related products branded by CITGO. CMO operates under an agreement with CITGO supplying several CITGO gasoline stations, as well as government and local and national businesses with truck fleets in South Florida.
CMO has grown its sales from $6 million in 1990 to over $12 million in 1998 and $15 million in 1999. CMO's growth in its customer base has been steady, especially if we account for a very steady price in gasoline and oil products until the third quarter of 1999. The Company's marketing efforts have been in expanding its service based revenues. These services consist of maintaining truck fleets of governmental entities and local and national carriers operational on a daily basis. This type of service provides CMO with a higher profit margin than sales of gasoline to gas stations. CMO is the only distributor providing this service in South Florida.
As a commitment to the management of CMO, the Company will provide working capital to aggressively pursue the distribution of gasoline to gas stations. With the recent mergers of Mobil-Exxon, and Amoco-BP Oil, the South Florida market presents a great opportunity for signing up gasoline stations that lose their brand because of the mergers. CMO can also enter into joint venture agreements with individuals willing to operate CMO owned gasoline stations. Furthermore, CITGO's distribution agreement with CMO is not limited to South Florida. This represents an unlimited growth potential consistent with ALG's plans for national expansion.
CMO's management has over 40 years of experience in the industry and 10 years as CITGO distributors. The Company has obtained commitments through employment agreements with senior management and sales executives to continue the steady growth trends evident in CMO's history. As a commitment to the management of CMO, the Company will provide working capital to aggressively pursue the distribution of gasoline to gas stations. With the recent mergers of Mobil-Exxon, and Amoco-BP Oil, the South Florida market presents a great opportunity for signing up gasoline stations that lose their brand because of the mergers. CMO can also enter into joint venture agreements with individuals willing to operate CMO owned gasoline stations. Furthermore, CITGO's distribution agreement with CMO is not limited to South Florida. This represents an unlimited growth potential consistent with ALG's plans for national expansion.
The HBI (Hairbiotech) Bio-technology Acquisition -
On September 13, 1999 Whitehall announced the acquisition of Hairbiotech Inc., a development stage biotechnology company with three unique patents for hair growth and hair loss prevention technologies. Hairbiotech currently holds patents to: (1) Antioxidant (A-O) technology, (2) 1,25 Dihydroxy Vitamin D3 compound and its analogue, with FDA approval for Phase II Human Clinical Trials, and (3) Hair Growth Factor (HGF) technology. The 1,25 Dihydroxy Vitamin D3 compound and its analogue patent was granted in February 1997 to the University of Miami and was acquired by Hairbiotech in August of 1997. Hairbiotech currently sponsors research at U of M as part of its Research and Development agreement with the University. This technology has been proven to be effective in preventing hair loss due to chemotherapy treatment. This will be a product that will generate significant revenue, when marketed through an alliance between Hairbiotech and a Fortune 100 pharmaceutical company, to the tens of thousands of patients who are undergoing chemotherapy treatment for cancer each year.
The Hair Growth Factor (HGF) hair growth stimulation composition patent was granted in February 1998 for a research stage pharmaceutical product derived from human cultured cells. The only FDA approved competing products are Rogaine and Propecia which are limited in their effectiveness. Rogain is effective in only approximately 20%-30% of its consumers, and in the case of Propecia, it is for use by men only and carries the possible side effect of impotence. Hairbiotech's technology is natural because it targets specific human hormones responsible for hair growth and thus it is safely effective when used by both men and women. It is anticipated that HGF will be marketed within three to five years to both men and women experiencing any kind of hair-related malady.
"Our business objectives are progressing much faster than we anticipated," said President and Chief Executive Officer Luis Alvarez. "Although Hairbiotech won't contribute revenue until we license the Antioxidant product, it will be a significant addition to our asset base." "We are extremely excited with the prospects of working with the Whitehall team," said Dr. Doured Daghistani, President of the Hairbiotech subsidiary. "We can now concentrate on the scientific aspect of our future business."
Alopecia (commonly known as hair loss) affects four in ten men and one in ten women, which represents a $500 million annual market. The chemotherapy induced alopecia market represents $100-200 million. Whitehall, through its medical technology division, expects to play a significant role in these markets. HBI will continue its research and development relative to the prevention of hair loss in conjunction with the University of Miami School of Medicine. The Company and HBI are currently negotiating with multinational industry leaders for the funding of clinical trials and ongoing research.
The MBM Acquisition, Whitehalls first -
Initially the most important goal was to oversee the operations of MBM, which was the Company's only operating subsidiary during the quarter ended December 31, 1999. MBM is a Canadian manufacturer of plastics. The company maintains strategic relationships with such notable North American corporations as Johnson Amp; G.K. Packaging; Fenton Webber; Novo Pharm; Jones Packaging and the Canadian shampoo division of L'Oreal. The acquisition of MBM has enabled Whitehall to begin rebuilding its financial foundation and forge new acquisitions. The Company evaluated in the course of the prior year whether the operations of MBM were sufficiently compatible and synergetic with planned acquisition candidates. Management determined that these operations were not complementary, and is currently negotiating the sale or other disposition of MBM and its operations. The Company is currently negotiating an agreement to sell its ownership interest in MBM. The sale of MBM will provide sufficient cash to acquire CMO, a business with approximately 3 times the sales of MBM and located within the Company's geographical area. Proceeds from the sale of MBM will leave a significant surplus of equity after the acquisition commitments of CMO are funded.
Outstanding and Float Estimates
As of 31 Dec 99 there were 8600 shareholders with 124,027,647 shares issued and an estimated float of 16,120,000.
WHITEHALL ENTERPRISES, INC. (Ticker: WTHL) is a classic turnaround, currently profitable, and a powerhouse holding company in the making. With extensive expansion, acquisitions, multiple revenue streams, visionary leadership and a precision buisiness plan, a special situation has come to fruition. No other scenario offers more growth and future profit potential.
Please use this document as a starting point for doing your own research. |
