OMNIQ Corp (OMQS)

[windough-shopper]

$QUES
QUES seems to be ready for a turnaround in 2017 after cleaning out a lot of stuff

link to the CC 2 days ago. I now think again its worth a look after we had a bad 2016. you will read why and hear it in the CC

https://recordings.join.me/mJVUXPrWiEWPcH3RT5L06Q CC of dec. 20th, 2016

You will hear/see why ViaScan failed

Why they had to divest

What the benefits of that divestiture will bring to QUES

How much debt they have already paid off and how much more they will

How they will strengthen the balance sheet

What the out is for the business and EBITDA

How insiders have put up 100's of thousands of dollars of their own money

Make believe you never hear of QUES and look at this as a new idea....if you do you will see the unique opportunity at a distressed price


So what FACTS have changed?

(Below is the QUES letter to shareholders released last week, a great read)

The ViaScan deal was a BAD DEAL....the mkt knew, that's why the stock kept going down from date of the deal

ViaScan was a manufacturer of labels and they need loads of cash to buy equipment and manufacture it BEFORE the orders came in..and other unforeseen issues, outlined below....

.QUES poured $8 million into ViaScan and it was unsustainable....the money drain caused QUES to fall into technical default......forced QUES to curtail debt reduction and cash for business expansion....

THAT CASH DRAIN HAS STOPPED....QUES can now use that money for business growth and debt reduction!

ViaScan deal was unwound....QUES got back $1 million and 7 million Shares

Despite all this, QUES was able to still lower debt and as you will read, debt reduction will increase....

QUES sees $60 to $62 million in revenue and 4-6% in EBITDA and increasing thereafter

Five% EBITDA on $60 million is $3 million, multiple that by 5X (which is the low end of similar companies mkt cap) is $15 million, divide that by 40 million shares outstanding, (they have less shares), that means a price of .37.....a huge jump from here.....

Its time to #MQGA!
Make QUES Great Again!

Image result for but wait there's more:

Senior management has put up their OWN money as collateral to guarantee the debt to ScanScourse, that says THEY HAVE MAJOR CONFIDENCE!





Quest Solution, Inc. Issues Letter to Fellow Stakeholders and Partners

Conference Call Scheduled for December 20th, 2016
EUGENE, OR / ACCESSWIRE / December 15, 2016 / Quest Solution, Inc., "The Company" or "Quest" (OTC QB: QUES) announced today that Tom Miller, Interim Chief Executive Officer, issued a letter to shareholders. The text of the letter is below:
On December 6th, the Company announced that we concluded the transaction to spin off Quest Solution Canada Inc. ("QSC") to Viascan Group Inc. ("Viascan") with an effective date of September 30th, 2016 bringing the Company full circle on an acquisition made in October 2015. With the transaction, the fully diluted number of shares was reduced by 7,039,030 with other consideration being the assumption of Canadian liabilities by Viascan, receipt of cash, cancellation of Canadian employment contracts and a right for Quest to receive 15% of net proceeds, up to $2.3 million, should there be a change of control of QSC in the future.
Canadian Acquisition Challenges
When the Canadian operations were acquired in October of 2015, the expectation was to provide additional revenue to Quest, as well as have a favorable impact on gross margins, expand cross border account opportunities, increase purchasing power leverage, and expand Quest's bar code label and media business by taking advantage of the Canadian production facilities. However, the merits of the acquisition were not realized due to a lack of working capital to adequately grow and sustain the label business, the complexity and costs associated with integrating the Canadian operation within Quest, a Canadian economy downturn and a slower than planned realization of synergies.
Unwinding Quest Solution Canada (QSC) And Resultant Benefits
The resulting losses and negative cash flow from QSC was requiring a transfer of working capital from the U.S. operations to Canada which was not sustainable going forward given the U.S. cash requirements for its business. After looking at multiple options the decision was made to sell the Canadian business back to Viascan as being in the best interest to all stakeholders. It allows for the simplification of the operations and reduces cost. It also frees up the investment which had been going into the Canadian business to be used to accelerate debt reduction of Quest leading to future flexibility for financial alternatives. It refocuses the Company and management attention on Quest's strengths in mobile computing and data collection where the Company is a leader in the U.S. market. Management believes that Viascan will benefit from the transaction and will now have greater flexibility to refocus on its core business. Quest retains an interest in QSC's future success as we will be able to receive a percentage of proceeds upon a change of control of QSC.
The Road to Success
Quest Solution, Inc. has been successful by integrating mission critical mobile computing and data collection solutions for over two decades for Fortune 1000 companies. The requirements and needs of our customers continue to evolve as they require new mobile and wireless technologies and services to make their business more competitive and profitable. The result is a continuous flow of opportunities for Quest to assist customers to evaluate, choose, implement, and support the right mobile and data collection solutions. As we focus on what we do best there is more than adequate market size, growth, and opportunity available to the Company to succeed.
Market
The Automated Data Collection and Mobile Computing market is well established and is a multi-billion-dollar market. Businesses around the world use mobile computers, bar code scanners, bar code and mobile printers, RFID, and wireless and voice technologies daily to continuously improve their supply chain and customer service. Quest is a vital partner to leading companies in Retail, Warehousing, Manufacturing, Healthcare, and Transportation and Logistics ensuring the right technologies, products, and services are being implemented to generate the appropriate Return on Investment.
Industry Outlook
The Company believes the industry outlook for Quest products and services is strong heading into 2017. We anticipate favorable increases in capital investments within the industries we serve. Consumers today are informed and impatient and want product availability when they want it, where they want it and at the best price. In response Retailer's and in turn their entire Supply Chain are implementing new mobile and data collection technologies to be competitive and stay in front of customer requirements. This is the impetus behind a strong refresh and replacement cycle of legacy mobile technology platforms that can no longer deliver on what is needed to run the business. All of this points to a good year for our industry in 2017.
Business Model
Quest succeeds because companies rely on our nationwide field sales and field system organization to bring solutions and services that address critical application requirements within their organization. We put our resources close to our customers and by working with them we find new opportunities leading to new areas of sales growth within our account base. Quest provides high added value to companies because we design, find and implement the right solution from one of our many vendors that best fits the application requirements. Our field organization is backed up with centralized sales administration and technical services and for some of our larger customers we have online portals to make it more convenient for ordering. In 2017, we will selectively expand our sales coverage in areas where we are underserved today. We will expand the use of web based customer portals and establish an on-line platform for ordering of less complex products.
2017 Focused Objectives
Our objectives in 2017 are focusing on operational excellence and cost reduction, addressing the balance sheet debt load and putting together a business plan that does not require high revenue growth.
As we look ahead to 2017 we expect modest growth in revenue with a target of $62M - $65M. We expect continued downward pressure on hardware margins offset somewhat by growth in services for overall gross margin of 19% to 22%. We will continue our initiative of reducing recurring operating expenses to a target of 14% to 16% of net sales and an adjusted EBITDA target of 4% to 6% of net sales. This plan is a remarkable turnaround from what occurred in 2016, is realistic and puts the Company on a trend for greater success in the future.
Debt Reduction - Plan To Accelerate
There is a need for the Company to improve the balance sheet. In the second half of 2016 we reduced the supplier note payable by $3.6 million or 27%. With the divestiture of QSC, we plan to further accelerate payments in 2017 to reduce the supplier note by approximately $5 million. We are looking at other initiatives we can take during 2017 to further strengthen the balance sheet.
Management Actions Demonstrates Business Confidence
In June 2016, management converted approximately $4.5M of management debt to Series C Preferred Shares at a conversion rate of one share for each $1.00 of principal and accrued but unpaid interest due on the debt, which was significantly above the market price of our common stock. In the 4th quarter, to facilitate the QSC divestiture, management pledged personal assets as collateral to backstop the supplier note payable from a partner (Details are in our Form 8-K, http://www.otcmarkets.com/edgar/GetFilingHtml?FilingID=11723920).
Summary
We fully understand the disappointment from the shareholders over 2016 results. We believe however with the steps being taken that Quest will be restored to performance levels that will increase interest in the Company. By going "back to the future" it best positions the Company for success.