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Strategies & Market Trends : Ride the Tiger with CD -- Ignore unavailable to you. Want to Upgrade?

To: marcos who wrote (200555)	6/23/2011 8:25:58 PM
From: loantech	Read Replies (1) \| Respond to of 313883

RYG my largest and one Claude likes.

To: marcos who wrote (200555)	6/23/2011 8:34:17 PM
From: pogbull	Read Replies (1) \| Respond to of 313883

Armtec investors still seeking answers after Guelph firm’s AGM guelphmercury.com GUELPH — Fran Pilon wants answers. The local retiree recently invested a good part of her life savings in a long-established Guelph construction firm, Armtec Infrastructure Inc. As recently as March, the company’s stock was trading at more than $17 a share while its president and chief executive officer, Chuck Phillips, said publicly the company could “comfortably maintain our current level of dividends.” Earlier this month, shares of Armtec nose-dived, hitting an all-time low of $2.53 a share on Wednesday. “I’m feeling that I’m not getting all the truth,” Pilon told the company’s board and management Thursday during Armtec’s annual general meeting. “How could my shares fall this much in a year?” Pilon said she bought her shares at “closer to $20 than $2.” About 100 shareholders, investment advisors and employees crammed into the foyer of Armtec’s head office, on Speedvale Avenue West, for the meeting, which spilled into an adjacent room where the proceedings were broadcast. But most shareholders likely left without a clear sense of what went wrong. “Why did it drop so precipitously?” Bob Wright, chairman of the company’s board of directors, asked at one point. “Who knows?” Phillips blamed a “perfect storm” of adverse conditions, including the recession and bad weather. He said the company’s engineering and construction suffered because of the “long, cold winter” followed by an “unprecedentedly wet spring.” Armtec earlier said it expected to pay an annualized $1.60 dividend per share on a quarterly basis. But in June, the company reported a sizeable first-quarter loss and announced dividend payments would not be issued this quarter. Cancelling dividends was “an appropriate management action in the face of tough market conditions,” Phillips said, adding dividends would be reinstated. “However, we are unable to estimate when that might be,” he said. A class-action lawsuit was started against Armtec days ago. The suit filed in Ontario Superior Court on behalf of investors who bought shares between March 30 and June 8 alleges the Guelph-based company broke securities laws when it offered a dividend, then cancelled it. The claimants argue Armtec should have known when it raised capital by issuing stock that it did not have enough earnings to pay dividends. Class-action lawsuits must be certified by a judge in order to proceed. None of the allegations against Armtec have been proven in court. Armtec has asserted “there are no grounds for a lawsuit to succeed” and stated its intention to defend itself should the action proceed. “What has happened has come as a bit of a surprise to everybody,” Wright told shareholders. “We did, in my view, act responsibly,” he said. Phillips emphasized members of management and the board have stock in the company, too. “I can tell you personally, a significant portion of my personal net worth is invested in the company,” he said. But many in the crowd wanted more proof the company could be turned around. The packed room seemed to get hotter as the meeting dragged on and a tense question-and-answer session got under way. When shareholder Dan Ellingham tried to read a five-page speech he prepared, Wright cut him off. “Let him speak!” members of the crowd yelled out, and Wright acquiesced. Ellingham sounded off on managers for giving rosy assessments of Armtec’s financial situation before cancelling dividends. “This is an unpalatable situation for shareholders,” he said, adding his confidence in the company had been “totally destroyed.” “If I ran my household like Armtec has run this company, I would be lining up for (welfare), because I would be broke,” he said, to applause from the crowd. Pilon also took aim at Armtec’s leadership, pointing out all construction companies deal with bad weather. Performance in the face of such adversity “is where you separate the men from the boys in management,” she said. Wright defended the company, stating it does not have a liquidity problem. He said the company simply hadn’t been earning enough to make good on debts. “It’s just words to me, sir,” Ellingham replied. Paul Hurwitz, a portfolio manager at a major financial institution, asked whether there is a plan afoot to sell the company. Wright said the board has no intention of selling or otherwise abandoning the company.