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Gold/Mining/Energy : American Eco (ECGOF, ECX on Toronto exchange) -- Ignore unavailable to you. Want to Upgrade?

To: Zach E. who wrote (2395)	4/16/1998 4:12:00 PM
From: Duncan	Read Replies (2) \| Respond to of 2841

As many of you know, I was a long time bull on this board...and now I'm simply a lurker. Maybe one day I'll buy back in. I was fortunate to have sold my shares at 9 3/8 to 10.5 a while back...at a slight profit...after 18 months of holding ECO stock. It's amazing what U.S. reporting provides...particularly the 10K disclosures. While I've mentioned their cash flow situation once or twice before...I can't emphasize enough how cash flows from operations outline the story. It sheds light on how a company is MANAGING and GROWING its business, regardless of the income statement numbers...because the income statement can not be propped up forever. Perhaps I've beaten this horse to death, but when ECO reported a $19 million USE of cash from operations, something was wrong...as evidenced again today...except this time their income statement is starting to reflect reality and the house of cards is collapsing. Just look at the lack of EPS growth...now and projected for the current year...not to mention the problems with Chempower. Does ECO have potential? Absolutely, they simply need to take ALL their bad medicine now and turn things around. It can be done...and certainly hope they do it. More importantly, everyone on this board neglects to recognize that ECO's numbers are reported in CANADIAN GAAP...not U.S. GAAP....and WALL STREET converts to U.S. GAAP when comparing fundamentals of one investment versus another. Look at last year, $1.08 EPS Canadian but $0.65 on a fully diluted U.S. GAAP basis. Yes, I know the debenture deal is past tense...and it was the primary difference between U.S. and Canadian GAAP...but who knows what will come up this year...or next. And in all fairness, while one time debenture costs drove EPS down...there were one time gains that brought ECO to $0.65 in the first place. So, we now we sit on management's estimate of $0.70-$0.80 EPS (Canadian GAAP) for the current year versus what would have been $0.77 EPS (Canadian GAAP, fully taxed) last year. That's zero growth on a comparable, fully taxed basis...and fundamentally the cash flows told us something was wrong. But we didn't see the cash flows until the 10K came out. Of course, some of ECO's subs are doing very well...but ECO management has not proven to ME that it can successfully buy and intergrate target companies and run their businesses efficiently. IMO, they have spent too much time focusing on the future acquisitions...and not enough time managing their own business. One rotten egg can sink a whole ship...so regardless of one or two subs performing exceptionally well, the rotten eggs are weighing down the boat. So, if $0.70 - $0.80 is the Canadian estimate for 1998, what is the U.S. GAAP estimate? Has anyone contacted management and asked for the cash flows? Just my two cents. Duncan