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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Paul Senior who wrote (21583)	7/1/2005 5:15:46 PM
From: Broken_Clock	Read Replies (1) \| Respond to of 78774

Paul I have been watching EGR for several months now. I almost pulled the trigger a few weeks back but it looks better to me now. $1.50ish looks like bottom.

To: Paul Senior who wrote (21583)	7/1/2005 6:14:56 PM
From: MCsweet	Respond to of 78774

Paul, I bot this near end of last year (possibly mentioned on this board? --- I probably sold too early but made some decent money), so I am not totally against the idea. Just letting you know this has been a horrendous business and that the business could easily eat them up. For a normal stock with decent prospect, I would normally back up the truck given the balance. Here I am not so sure. They are in a terrible business (at least it was when I was in it), and the excerpt below doesn't give me any confidence these guys know how to navigate it. Retail suppliers usually get hurt by commodity volatility, up or down (i.e., if cold winter -> have to buy gas @ skyrocketing high prices to supply greater customer demand. if warm winter -> have to dump extra gas @ low prices cuz customers don't want it). Same idea with electricity supply during summer. Plus you have customers churning out all the time, and you have to compete with utilities that want to drive you out of business and have lots of money and political connections to do it with. Just keep that in mind. MC In the second quarter ended January 31, 2005 the Company announced a strategic realignment of its Pennsylvania customer portfolio and the sale of excess supply contracts. Due to timing and forecasting issues associated with the implementation of the portfolio realignment, the Company incurred costs for more electricity than planned during the transition period. As a result of these issues the company is restating the previously reported second quarter gain from $9.3 million to $7.2 million to account for the higher cost of the replacement power. The effect of the restatement is to change the previously reported net income of $1.4 million in the three months ended January 31, 2005 to a loss of $0.7 million, and the previously reported net income of $0.3 million for the six months ended January 31, 2005, to a loss of $1.8 million. As a result, the Company has filed a Current Report on Form 8-K and an amended second quarter Form 10-Q today reflecting the restatement. The Company has also determined that the timing and forecasting issues related to the implementation of the Pennsylvania portfolio realignment constituted a material weakness in internal controls. Improving the Company's internal controls is a significant issue that is being addressed by ongoing process improvements, which include new reconciliation procedures and capital investment in new, externally developed, systems to replace internally developed software.