is... a buy and hold investor of dividend US and Canadian stocks
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
it has been posted many times that that volume (2500) has been associated with "wash" trading. Not the same as painting... but intended to have the same effect.
From the JBI web site:
"As the founding CEO and President of John Bordynuik Inc. (JBI), Mr. Bordynuik is responsible for driving corporate strategy, business development, hardware and software design and sales."
http://www.plastic2oil.com/our-company/management-team/john-bordynuik.aspx
I worked for maybe 15 years in high technology. That is at least 3 jobs. This guy is trying to do too much.
more to the point, i would say that he canèt have the AGM unless there is some change in the SP or at least some news to create an expectation of sales. The problem will not be lack of attendance, but the attitude of the attendees.
Than where is the production?
It was explained to me at the industrial gases company I worked at that safety is not just important to save lives, it is important to do business. The reasons were explained but I can't articulate them here. Likewise, every one of our suppliers had to be qualified to work with us, and the safety record was paramount.
Looking a this situation, JB is learning as he goes how to do business at the expense of investors. He blew it in the area of permitting, and I suspect that he is too busy tinkering and designing neat feeding systems than doing whatever he has to do to be able to operate, and I bet that has lots to do with industrial safety.
Cars are designed to be operated by the average person trouble-free. They also test the crap out of them, recall them for the slightest fault, and provide full documentation to go along with it.
This is a brand new process that does contain hazards (electricity, oxygen, heat, off-gas, etc).
It just seems to me that investors get so excited when JB designed something like this Ram Feeder that they forget about the practical aspects. I could care less how interesting this device is, I just know that there is some governing body that makes sure it is safe to operate and that that is more important than how neat it is. Similarly, when an industrial press is purchased there is an operating manual that goes along with it that says that both hands musty press button simultaneously in order to operate the press, in order to avoid an operator taping over one of the buttons to get more work through it, in the process losing a hand.
I could show you how to scuba-dive in about 5 minutes. There is one skill; equalizing pressure in the ears. Other than that, all you have to do is remember to breath continuously, and you are good to go to 100 ft. Of course, if something happens (about 1% probability) you are dead... the point is... don't take chances.
Now if you excuse me, I have this running shoe business I must attend to.
Actually, your article supports my point, because that is one heck of a markup. Thanks. It also ignores Overhead, which accounts for the rest. Easily. Only thing you are still missing is that this plant requires at least one much more highly-paid person to be present while the plant is in operation (because of the safety aspects) who is Direct Product Cost.
And you have identified the Overhead items, the lockers, and the meeting room. Nice work!!!
btw, they don't need a machine shop either. What a waste of money. Someone's playground....
We can agree to disagree.
I will believe it when I see the plant in operation and see some profitable production numbers.
I believe that I have worked in plants, done cost analysis on Engineering/ Construction projects, and that you... as per your public posts... were an actuary.
I think that although you may have been inside the plant while I only chatted with a Buffalo Police Officer that may have been a shareholder... I know a bit more than you do about these things.
And I think it is great that he was able to hold onto a job for that long!!!
forgot to mention... these are not "workers" I am talking about. That implies the notion of someone that punches in and loads plastic all day for some hourly rate.
I am talking about a professional person that is responsible for control of the system and the safety of everybody in the plant. There would be some kind of control room and he would have at least an office. Or maybe the control panel on the unit itself would suffice. However, because he has some infrastructure to support him he would attract Overhead. He would know every possible system input, output, and state, as well as Alarms and all of the dangers.
To give a simple example, we have a Ram feeder of some kind (JB's own creation). Well, likely it could hurt somebody or crush them or an appendage. So, somehow there has to exist documentation to outline:
- the potential dangers it represents, or hazards.
- the steps taken to address those hazards.
- the procedures necessary to prevent injury.
We have electricity, Oxygen (explosive), off-gas, etc. lots of hazards...
There would have to be somebody that knows those procedures and enforces them. Likely would have periodic (daily potentially) safety meetings prior to shifts starting. That is the way plants work.
I have been in two environments that had control rooms. One was a nuclear plant and the need for that that is obvious. The other was an air separation plant, and that one caught me by surprise. it was actually much the same as the nuclear plant, with people doing the same thing, more or less...
To say that the DL (Direct Labor) associated with a barrel of Oil cost $10/ hour is misleading to investors, IMO.
agreed. but two shareholders can have quite different opinions. I saw the yard with the two drums in it immediately after another shareholder saw it and thought it was a great thing, some real progress.
I doubt that JB would enjoy a meeting with me.. as I am a professional Project Manager.
that calculator does not include Overhead (it is a concept...).
Anyway, someone posted about a worked in a machine shop being paid $35 and his work being billed out at $85. Makes perfect sense. I worked at a consulting firm, and consulting firms are notorious for keeping meticulous track of every employee's cost and making sure they are profitable on every job they do. They will do things like put junior people on jobs near the end to keep them profitable.
Anyway, I worked in a consulting firm (an American one at that) and so know something about this.
Cost is roughly double salary including benefits, burden, and Overhead. Adding margin increases it another 100%. That means a professional person making $50/hour or 80k costs $100/hour and will be billed out at approximately $150/hour. I have often said that URS costs about $150/hour/person.
So the numbers, salary of $35 and work billed at $85, make sense.
Again, I believe you are talking about what a person is paid. Versus what they COST. 21% is probably the difference between what a person earns on a contract basis versus a permanent basis. That has nothing to do with the added cost of Burden and Overhead.
Let's do the math.
well, a contract rate can be roughly doubled and multiplied by a thousand to arrive at the equivalent salary. That is the on-the-street view.
ie.
$60/ hour = $120k/ year.
BUT.. there are 1800 hours in a working year after holidays, etc. are removed. If you do the math you will find that the true equivalent salary in the above case is 108k.
Contractors are deemed a bit more expensive to the organization usually. 21% seems about right.
$60/ hour is not really that expensive in this business. I go out for that plus per diem. My equivalent salary is 90K.
90K vs 108K.
You will find it is 21%.
that is "proof". Thanks. Quid Pro Quo.
I think there is a major misunderstanding here. i am sure that you and others consider cost as some small adjustment to what one is paid. Nothing could be further from the truth... as such there is no "proof". The only poster I would believe is a Cost Accountant that works in the Engineering business.
Anyway I can't really prove it unless I find some reference that backs me up. I just know it is true because i have performed this analysis myself for years. I doubt that it will ever come out in JBII financial statements in a form that would "prove" it either. What you see is just no profitability.
Wait until se wee some operational statements, see what the results are, then we may see "proof".
Well I don't need "proof". I just know. Doubling a person's salary is the norm in business in order to arrive at total cost.
Total Cost = salary + Fringe + Burden + Overhead.
There is no proof of this other than what we know. We can argue forever about it. If I can find a good reference I will post it, but when I do something like this on a daily basis.... that is enough for me.
see my last post for an explanation of how I arrive at capital cost by a factor method assuming a 200k equipment cost. It is more like 300k all in. With the cost of all the labor to build the machine... figure a total cost of 2 Million for all 3 machines on that site.
I know they have spent 1 Million to date. It is in the F/S. They will likely spend less than that on later machines because of the Lessons Learned.
The original post was about labor costs, not construction labor costs. There is quite a difference.
In terms of the construction labor, the way I look at it the machine has a capital cost of about 1 Million dollars (pinky at face like Mike Myers), and that would be being conservative. I came up with that with a factoring approach, factoring in the equipment cost at $200k and looking at the percentage of equipment cost on other jobs I have worked on. On other stuff i worked on, it was about 20%, hence the 1M figure. That would take into account all of the laborers and skilled trades that go into building the machine.
Actually, your post does not make much sense, as you must be talking about the lowest form of laborer at $18/ hour. I know for a fact that skilled trades like pipefitters, ironworkers and the like can make 6-figure incomes if they work overtime.
What i was talking about is the labor required to run the plant on an ongoing basis, not to build it.
I can only compare with what I know. The word "operator" in my sense means someone with some education and training that understands the control system and all of the possible failure modes of the system as well as all of the hazards inherent in the system, and the required safety practices to be followed. In this system you have : oxygen, a ram feed system that could potentially rip someone's arm off, heat, etc. There is plenty of room for an accident.
If JB i the only one that knows the process control system and he won't document it, then they are in some trouble.
I am comparing that operator with an Engineer. I worked in an Engineering office that had engineers and managers and we worked on construction jobs. The role of the Engineering group was to perform required engineering analysis as part of a design process prior to Detailed Design, Procurement, and Construction. In that environment I used an average cost figure of $100/hour that went into the capital cost of the final product.
If you want proof, look in the F/S at the cost of the Islechem guys. They are equivalent.
My contention is, and always has been, that the operating cost is going to include at least one guy like that (from Islechem) acting as an "Operator". That is someone considerable more capable than someone working a forklift jamming plastic into the machine. This is the $10/hour X 2 figure that has been thrown around to arrive at the $10/barrel cost estimate.
Look in the F/S for proof of my contentions... the Idlechem (typo.. let's just leave it... LOL). I have seen it but could not find it last time I looked.
the stage of company development does not matter. Smart people do not do anything unless they know it is going to work out well. They figure out all of the cost and financial and ROI data first.
Yes when you consider labor cost you consider true cost which includes the "benefits" as you put it, which is more accurately called burden, and Overheads as applied to that labor. Total cost is about double what a person is paid. $100/ hour is a good average total cost number for a professional person.
There is no simplifying that, no getting around it, no matter what great ideas or technology is being protected by half the Buffalo police force (from what I am reading here from 1000 ft), who may or may not happen to be shareholders. All that means is they are not working for double time. Then they would cost $200/hour.
Evolving, developmental, it makes no difference..
they have not got any money to build the second processor anyway. By my calculation they only have 500k in cash and that is dwindling fast. They had next to nothing at the end of the last q and got 1M from that offering. If they are burning 1M/qtr, they only have maybe 500k left.
Building that second processor would take at least 500k.
Where are they going to get it?
It would appear you are correct.
http://auto.howstuffworks.com/fuel-efficiency/fuel-consumption/summer-fuel.htm/printable
Thanks for that.
The question in my mind is what is JBI's target market and what is their channel to that market?
Hogwash????? I don't really understand your post, but I think that you are saying that the additional costs I am talking about is the cost of the Human Resources department. Nothing could be farther from the truth. I am not a Cost Accountant, and they are the only true "experts".
Everybody in a company that occupies a desk has an Overhead cost associated with the cost of the desk, the heat, light, the computer and tools they use, etc. That is Overhead. Everybody, including H/R people, attracts Overhead.
Everybody in a company has "Burden", which is the correct term that Steady_T used. Burden = all costs above salary, which are: benefits, vacation... etc...
Cost = Raw cost (Hourly Rate) + Burden = Overhead.
I never mentioned incremental costs. Nothing to do with it.
Each hour that an employee spends working costs a company roughly double what the employee is paid, unless they are virtual workers, in which case you can eliminate the Overhead. I actually in one situation had a list of strictly internal departments that did not "attract" Overhead (using the correct accountant's term). I costed appropriately.
This is pretty much the best I can do:
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=59133067
I can't "prove" something that I know to be true from my own experience and still remain anonymous while retaining confidentiality. It is simply impossible. All I suggest is that you ask a Cost Accountant that works in a manufacturing environment or a Consulting environment where labor costs and Overheads are tracked closely and come back to the board with your findings.
I have never included R&D costs in my comments. Those are sunk costs which I would not normally included in my analysis. They have to be recovered in time, but the timing is entirely arbitrary and defies analysis, as the product may be a "loss leader" which may not be designed for profitability anyway. R&D costs are an interesting area wrt whether they are capitalized or expensed and which is treated different under Canadian and US GAAP.
Just because something is given as an estimate, especially in an off-the-cuff back-of-the-envelope manner, it should not be taken as fact anyway. To question it is to add value to a discussion IMO. Estimates can take months to do btw... Hopefully you find my comments useful.
GLTA.
Nothing is being made up. If JBI says they are paying people $25/hour, the cost to the company is $50/hour. Rounding $25 up to $30 is unrealistic IMO and I have done this cost tracking myself, so I know.
You could ask a Cost Accountant this question. I am sure he/ she will agree.
I can't prove it without sharing what I can't share. It is just a discussion point and you can believe me or not.
My motivation is simply that I think the $10/barrel cost is an unrealistic number and I don't see a good basis for it.
I have posted previously that they need to do $800k/year in profits to justify the capital expenditure for a 2M plant based on 20-30% Roi. That is just a calculation, which I can share if you like.
The profits figure must take into account Direct Labour (what we are discussing) and Direct Material (for which I have no detail). I suggest that way of thinking is a good start point.
It strikes me that in quoting $10/barrel, perhaps JB is ignoring the ROI analysis. That fact only further leads me to think he is being unrealistic... it s a good discussion point with the CEO.
Has he ever discussed ROI?
Fair enough. I did not realize you were adding burden. I actually had a great breakdown of these things at a Consulting firm I was at. I am not sure off the top of my head even what "burden" represents and I can't lay my hands easily on that analysis. I know that burden is not the complete picture. I think that burden = benefits plus other direct employee costs. Total cost = Raws cost + burden + overhead, hence the 100% number.
I do know that in several employment situations I was in, Cost as represented by what a person is paid can be roughly doubled to arrive at true cost. In most Consulting environments raw rates range from $40-80/ hour and most companies take great pains to track individual resource costs. I have tracked these costs myself.
In another environment I was in the company chose to take the approach of costing everybody at $100/hour (raw cost = $50). This number was increased as I was leaving to better reflect true costs. That was an engineering office with typical professional people.
Steady_T:
I like your post. It is informative and filled with detail.
However, I think you are underestimating the costs and that the $10/barrel cost model is seriously flawed.
The quickest way I can demonstrate that is to look at labor cost once again.
You say you have 2 people being paid $30/hour to operate the P2O machine. Not a bad number. However, you specifically say "paid". Once again, you are ignoring the fact that what these people actually cost the company is quite different from what they are paid. In fact, you can double the number they are paid to get to what they actually cost the company. Their Cost is $60/ hour.
The other thing is that this makes up most of the Cost figure you are starting with. So instead of $1440/ day for Direct Labor you have $2880/ day. And immediately your argument is debunked.
In fact, I can drive a truck through your post.
The biggest problem here is that you are starting with a figure in mind and the rest of what you are saying follows from that. If you looked at things from first principles and thought in an open-minded fashion, you would come up with a more realistic number. Simply forget about the $10/hour and look at the costs in am open minded way.
In my previous posts I have stated that in order to get 20-30% ROI over the first several years of operation he needs to make $800k/ year. that is a start point and takes care of the capital invested in Plant & Equipment. After that is Direct Labor and Overheads (what you are looking at).
It is a good start, unfortunately I can blow it out of the water.
actually my next big discussion is on the conference call, bu tin fact there would have to be an Emergency Manual. Good point.
no..no. i meant that that is going to be a fairly highly-paid person. Not a high-school kid. Paid 50k or more.
I have had a chance to listen to the conference call. It was pretty good I must say. Lots of information well presented. I still have concerns and would not invest in JBI at this point.
These are my comments/ concerns:
- JB made a statement about the footprint and made reference to the processor. I suppose he was saying that the processor would be a key component in a future sale and the rest of the machine would be configured around it, but to me the machine still looks too big and sprawling. There is a note later in the presentation about the potential (JV?) partners having "excess plant floor capacity". This brings to light the issue of floor space. Most plants are fairly crowded and if he wants to get his machines on the properties of waste operators, this is going to be a concern. Again, I thought the Envion machine is much more constructable at this point.
- JB is making a big deal of the local Niagara market being some kind of proving ground and is quite vertically integrated. That would be of concern to me if i were an investor, because my concern would be preparations for expansion. the Niagara area is unique in having a group of firefighters willing to drive off-hours, as well as a lot of daredevils and hucksters selling all manner of goods. Point is, I would care more about a specific product aimed at a broad market, not a vertically-integrated enterprise aimed at a local market.
- There is a 2000lb/hour limit on input? What is the impact on throughput?
- It looks like he is planning to process clean plastics. I was actually impressed/ convinced somewhat with that part of the presentation. Quite good.
- I was somewhat concerned with the experimentation with loading systems (Ram feed vs, shredding). All of this after the conversation about other P2O attempts having failed so miserably and blaming continuous feed systems on that failure. Seems as of jBI is trying to figure out that one as well. After all, isn't Ram Feed pretty close to Extrusion??? I have seen extrusion in Steel, btw...
- was impressed with the discussion about the sensors. Seems as if he has simplified things somewhat, that is a good thing. He has figured it out as I said he should have.
- I still think the labor is more expensive than he is saying. For one thing, he is still talking about wages paid, not cost. Cost is about double. If wages paid are $30/hour, that employee costs the company $60/hour.
- As i said before, I don't like the vertical integration. It smells of avoidance in defining a clear strategy and target market and focusing on it. Frankly, the fact that shareholders are involved as drivers is a joke. If they are firefighters, well frankly I would not want there to be any further production delays... these are hard-working people.
- vertical integration will not work elsewhere when it comes to expansion/ commercialization... so why bother?
- the biggest problem by far with the vertical integration is that there is nothing on the SALES end. Where is the integration into Sales? In fact, there was no mention of Sales.
- I enjoyed the discussion about business plans and various business models, but the problem is it is a bit late to be discussing it. Shareholders were told that quick profits were possible by selling to refineries, so why the discussion now?
- It seems as if there is alot of talk about Secondary Markets. I am using that term, although I am not sure it is correct. eBay is a Secondary market. It seems to me that if they are going to sell Fuel Oil to a plant of some kind, they are not going to be able to get the same market rate that has been touted. Likewise if the blending plant was formerly able to get $100/barrel, I doubt that they could get anywhere near that to some Waste Plant for having a JBI processor on their turf. It would have to be proven to me.
- In the Waste Handler marketplace, although this is a great idea, the economics of it are not discussed. I can almost guarantee you that if they go to the Secondary Markets, they will not get full market rate and this is not discussed.
- the other path, JV, is completely undefined. In other words, the JV partner will have to find their own markets for the fuel. Not good. I also noted that the only JV partner they have is Al Sousa. There was a comment about the remainder of the partners in Florida having no interest.
- The hiring of Colin Robbins, in the absence of sales, would bother me. While he is a good guy and all, it seems as if the primary reason he was hired was to bring in sales... possibly because of who he "knows". Well, that should not be necessary and is contrary to what investors have been told. Also, it signals reliance on that blending plant, which is not good. What are future business partners going to do to sell?
- I personally thought that the bit about butane in fuel for cars was BS. It seems to me that that comment was targeted towards the Secondary Market. Gasoline put into gas tanks of cars is highly regulated and I doubt that the level of butane is controlled. I would guess that it is the same composition year in and year out. I actually know quite a bit about how cars work. I am what you might call a shadetree mechanic. How a car performs in winter is reliant on the fuel injection system functioning properly, not on the composition of the fuel. I know exactly how my 33-year old car is supposed to work. What i put in it is not that important. Now that is not typical... most people know nothing about cars, yet are anal about the quality of gasoline they put in it. At any rate, that part of the call was suspicious to me... Someone would have to prove to me that what Colin said was true.
In summary, it was a good CC. My impression is of a company that is still trying to perfect the process, and has a big challenge in figuring out how to approach the market. The fact that they are sorting that out now is the biggest red flag for investors. Plus, all the vertical integration leading to no sales at all.. that is a concern.
Biggest concern of all, however, they have no money. By my calculation at this point in time they have about 500k in the bank. They are burning 1m/quarter. How are they going to get the capital to build 2 more processors? That would take that 500k at least...
If i were an investor, if I heard anything at all about sales I would feel much better, but as each day passes... the financial concerns become overwhelming. I wonder if I was to go by the plant if those two big drums would still be in the front yard... maybe worth a visit.
I did note that their financial structure can absorb quite a bit of share issuance.... but it takes time. I just don't think this latest issue is enough for them to be successful.
It is not important that the machine can run itself or not. There has to be someone who understands the processes and any events well enough to respond in case there is some kind of emergency or safety concern. This may be something that happens only 1% of the time... that is a much more trained and educated person than someone loading plastic.
well when I was there the guard said they were "looking for shareholders" so I would not think that that comment would have come from a shareholder....
Cameras???? Gadzooks., anyway.... why would you say that the security guards are shareholders? I can't imagine that. They are probably unionized, thereby the work is fairly dished out according to seniority or something...
do you believe everythingJB tellsy ou?
I highly doubt they are shareholders, although I can confirm that they resemble Buffalo policemen...
seems a bit cultish to me if they were shareholders...
no really can't say asiam.... boring
Hotstocked has stopped sending out their lightning pick at the bell, now it is the night before.. This is a first, and not quite so scammy... I received this:
From: Hotstocked.com (Hotstocked.com@mail.vresp.com)
Sent: January 5, 2011 11:06:11 PM
To:
Good Evening,
Our lightning pick for tomorrow is Aultra Gold, Inc. (OTC:AGDI), which closed at 79 cents today. It is a gold company holding seven prospective and strategic properties in Congo. A couple of weeks ago, the company acquired more exploration licenses in Cambodia and Canada, both having major potential. Two projects in Congo are already set forth and just this week the company started the exploration on the project in Canada. All suggests that AGDI could be a future premier gold producer and unlock shareholder value very soon.
good explanation.
that was my point. THey are leasing it (paying for it). Hence the plastic coming from it is not free, that is all.
which they are LEASING? that would mean it is not for free...
When do you intend to add some notion of Non-Product Fixed and Variable Costs? What about the recurring cost now, approximately 1M/quarter, most of that will not be product cost.
yes I think you are wrong.
"Not so sure, if in the event you are negotiating contracts, service agreements, etc. and the subjects of message boards are a source of lengthy discussion of what is and not facts... you have been damaged... "
You think that people discuss message board content when negotiating contracts, etc? I can't imagine that...
I really should publish the Vendor Selection Criteria from the PMBOK.
Message boards would not be viewed as a source of relevant factual information.
So someone posts an opinion without having read the latest CC or filing. They know the stock fairly well, but something posted is wrong because of recent information they do not know.... what is illegal? Let's say it is a negative post. That is the best situation I can think of. Better yet, let's say it has to do with the $10/barrel cost. Let's say that JB puts a detailed operational cost analysis in the document unread. Let's say the poster never believed the $10/barrel claim and has posted incessantly about it.
What is illegal about it?
well, putting together that post and this post
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=58375132
where you say:
"your correct false info doesn't stop DD but how many people can u say do dd? again since you did work in the field sort of speak how many people just followed your recommendation with out doing any dd for them self? most people are lazy and will just follow what they read or let other tell them what to do."
if I can paraphrase...
You just want to take advantage of lazy people by enduring that the message board is positive at all times instead of reflecting all opinions available in the otherwise uncensored message board.
Have I captured your thoughts accurately?
The investor's laziness is not the poster's problem. The poster not the one making the decision, he is just putting the information out there. The investor makes the decision. It is better for everybody if as much information comes out as possible, no matter how inaccurate. It is commonly said not to go to the internet for investment decisions.. and it is good advice, for JBII or any other stock. I know the place it has for me, I only look on a message board for news if I want to get it quickly. To follow internet postings for Buy/ Sell decisions is folly.
actually, let me modify my statement... I have been posting less than I used to because I had not read the latest CC and there had been no news. I thought it had been a couple of months. I guess not.