Executive Directors, VP, CEO’s, Partners, BOD, Business Owners, Employees, why is it important to know the company’s COMPASS HEADING? There is risk regardless of the direction. I invite you to read the following and let’s learn from them. This summary presents recent results, decision, impact for a company falling through decline. The outlook for its employees, investors and communities is not good. This determination is based solely on public information and not any internal reports or documents. Internal reports and documents provides another perspective into the company’s overall health. Several attempts were made over the past year to contact the leadership in an attempt for them to sponsor research into their compass heading, but to no avail. However, public information is most likely enough because Wall Street is not supportive as the stock price continues its decline. From the highest stock price in 2014 to August 6, 2020, the drop is at 93%.
I followed this company for nearly 18 months – public financial information, news releases, analysts. I loaded all the information into the Compass Model that my previous blog explained to determine what direction the compass was pointing. Why is it important to know? There is risk regardless of the direction. This company’s heading is decline. At what stage, I expected at least Stage 4 based on Jim Collins’ Five Stages of Decline. The company is most likely now at Stage 5. Here are some facts on the company which could demonstrate problems and implications of them on the company’s future.
Year-to-Date 2020
- Q1 losses at $19 million
- Q2 losses at $ 38 million
- Stock down 7% to 10% to August 6, 2020
- Cash on hand projected to run out before the end of the year
- Announced plans to close plants, layoffs, product reduction
- Attributed most recent results to COVID-19
Years 2016 to 2019
- Revenues at $ 2.5 billion
- Losses at $ 141 million
- SG&A, R&D Expenses at $ 1.4 billion
- Stock ended 2019 – 75% down for past 6 years
Years 2004 to 2019
- Accumulated Revenue $ 6 billion
- Accumulated Losses $ 684 million
- Acquisitions made 2013 to 2015 value $ 600 million plus stock
- Impairment charge $ 540 million
- R&D Expense $ 700 million
- One interim CEO in past 16 years had a year of profit, his only year as CEO. All other CEO’s had accumulated losses over their tenure
- 6 CFO’s over 10 years
- 10 Senior Executives over 10-year period
- Company expanded products, services, plants, domestic and international
All the results point to a company in the final stage of decline. Model was proven in research of other companies in decline. The options for leadership with limited cash and in the final stage is most likely two – capitulate or hang on until irrelevant/disappear.
Leaders, employees what direction is your compass pointing is one of the most important things to know because, there is risk for all employees, stockholders and communities. I will continue to monitor their future.
All the best, get started and know – growth or decline. Clock is ticking.