Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Microcap & Penny Stocks : STAX -----> Stelax Industries - A real gem. -- Ignore unavailable to you. Want to Upgrade?

To: Jim Chapman who wrote (666)	7/9/1998 8:12:00 AM
From: Jim Chapman	Read Replies (1) \| Respond to of 1112

The following is from an interview published in The Wall Street Transcript dated December 22, 1997. ---------------------------------------------------------------------- TWST: For a long term investor looking at the financial statements and the annual report statements, what would you suggest are the one or two items, ratios, or sets of information that the investor should focus on over time to get an insight on what the company is doing and where it is going? Mr. Hardy: As a long term investor, I think that once you take a comparison of ourselves to other steel companies, we are in a commodity business, a year from now our profit per ton shipped is certainly going to be one of the leaders in the steel business. We are in an area of substantial cost savings in a very large market. I think this can be judged by watching the contracts. Announcements should be forthcoming over the next year. TWST: Looking at margins, what are the key factors and variables that impact on your margins? Over the next year or so, what do you see as the net result or the net impact of these factors and variables? Mr. Hardy: One must consider that the Nuovinox process consists of a cladding of only 22% solid stainless steel. We use a core of scrap steel, which runs $100 a ton versus stainless steel at $2000 a ton. We are not affected as much by swings in stainless steel prices, since less than 25% of our product is stainless steel. So nickel, which is a major ingredient in stainless steel pricing, if it goes up in price, it only makes Nuovinox look more attractive. We are not really affected by the normal ups and downs in the steel business. TWST: Addressing your shareholder constituency, what level priority does shareholder value have on the overall agenda? Mr. Hardy: I think shareholder value is recognition of the success of the company. I think the market judges success by shareholder value. We are a company that trades in two markets, in addition to our present trading on the NASDAQ bulletin board, we also trade on the Nuveau Marche in Paris; which is now the Euro Marche and brings the German, Belgian, and Dutch markets. It is important for us, from a supplier and a sales viewpoint, to be able to get the worldwide recognition and the credibility that comes with shareholder value. TWST: Do you feel that the current market price reflects what you see as a stable, long term value for your company when compared to the overall stock market and then relative to your perceived peer group? Mr. Hardy: I have to qualify that by saying that I am biased towards the company because I have the opportunities better than anyone else to see what the market potential is for the company. With the aspect of comparing us with our peers, I feel that we are way undervalued but most CEOs probably say that. TWST: What are the special talent assets and resources that your board of directors brings to the company? Mr. Hardy: We have a limited board now which consists of a senior vice president from a major bank that brings in the financial strength and knowledge in the banking relationship. Another director is a business individual that has been in many different types of business investments. He gives an overall business knowledge to the company. Then, of course, we have Mr. Cacace and his many previously stated talents. We plan to continue strengthening the board as we grow. I am sure that will be forthcoming. TWST: What do you see for capitol spending requirements over the next several years? How would you meet any of those needs? Mr. Hardy: We do see the need for capitol expenditures as we grow in size. We anticipate being a very profitable company in growth but it does take more capitol. We don't see the need for only near term financing, but feel it would be required in the future for growth. We do look for the aspect of joint ventures taking some of the financial burden off in our expansion process. TWST: The tough calls always land on the CEO's desk. What do you see as the one or two tough calls or major decisions that you will have to address over the next year or two? Mr. Hardy: I think the tough call is the one that you just brought up. How do we finance the future growth of the company? Obviously, that is a serious situation. If it is not done properly then the company could choke as far as expanding its capabilities, so that's a tough call. I think it's a tough call where, as far as the strategic alliances that have to be formed, what's the best way to protect the intellectual property rights that are the heart of the company in such a manner that the company can still realize its full maximum investment out of its technology. Those are a few of the tougher problems that I see facing the company. TWST: What, then, is the essential message that you would like to convey to long-term investors about your company? What are the four or five strengths and advantages that your company has as an investment? Mr. Hardy: I would like to tell an investor to just watch us, watch and see what type of contracts we obtain and analyze those contracts as far as the total market potential that exists with the recognition of those contracts. And then I'd like for an investor to check our revenue and earnings as we progress and move ahead, and compare that ratio to, as we said earlier, our peers' ratio of profit margin. Overall, more important, just observe the aspect in one's everyday life as they see the Stelax steel applied in many different applications--because I truly feel that, again, not to be redundant, that Stelax steel will become the plywood of the steel business. END OF INTERVIEW