I guess just putting out PR's. I'm not too impressed with then either....but that's not the real issue. Here's what, imvho, needs to happen for Labwire to move off the pinks, and do it for the maximum benefit of the shareholders and management.
1. Keep signing contracts.
2. Get AF's.
3. Go to the OTC.
4. Change the capital structure.
The first three are obvious, and will make us all happy.....but #4, imvho, is the real issue that will make us or break us.
Alright, so here is the capital structure at present.
Capital Structure as of October 4, 2006
A/S: 150,000,000
issued and outstanding: 139,799,001
restricted: 123,849,003
float: 15,949,998
The first thing apparent is that it's amazing that the float is so very small after a complete 504 offering. My hat is off to Dexter on that one! But, yet, something does seem out of whack....what is it? Well, let's look at another example.
Acxiom Corp. (ACXM) On Oct 20: 24.87 0.11 (0.44%)
Market Cap (intraday): 2.19B
Enterprise Value (23-Oct-06)3: 2.68B
Trailing P/E (ttm, intraday): 29.54
Forward P/E (fye 31-Mar-08) 1: 19.74
PEG Ratio (5 yr expected): 1.44
Price/Sales (ttm): 1.62
Price/Book (mrq): 3.05
Enterprise Value/Revenue (ttm)3: 1.97
Enterprise Value/EBITDA (ttm)3: 6.696
FINANCIAL HIGHLIGHTS
Fiscal Year
Fiscal Year Ends: 31-Mar
Most Recent Quarter (mrq): 30-Jun-06
Profitability
Profit Margin (ttm): 5.54%
Operating Margin (ttm): 12.04%
Management Effectiveness
Return on Assets (ttm): 6.71%
Return on Equity (ttm): 10.81%
Income Statement
Revenue (ttm): 1.36B
Revenue Per Share (ttm): 15.65
Qtrly Revenue Growth (yoy): 8.50%
Gross Profit (ttm): 352.13M
EBITDA (ttm): 399.53M
Net Income Avl to Common (ttm): 75.30M
Diluted EPS (ttm): 0.84
Qtrly Earnings Growth (yoy): 168.20%
Balance Sheet
Total Cash (mrq): 4.16M
Total Cash Per Share (mrq): 0.047
Total Debt (mrq): 471.55M
Total Debt/Equity (mrq): 0.654
Current Ratio (mrq): 0.911
Book Value Per Share (mrq): 8.191
Cash Flow Statement
Operating Cash Flow (ttm): 270.71M
Levered Free Cash Flow (ttm): 153.80M
View Financials (provided by EDGAR Online):
Income Statement - Balance Sheet
Cash Flow
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Share Statistics
Average Volume (3 month)3: 736,865
Average Volume (10 day)3: 522,878
Shares Outstanding: 88.07M
Float: 81.20M
% Held by Insiders4: 7.79%
% Held by Institutions4: 76.40%
Shares Short (as of 12-Sep-06)3: 3.07M
Short Ratio (as of 12-Sep-06)3: 4.8
Short % of Float (as of 12-Sep-06)3: 3.80%
Shares Short (prior month)3: 983.94K
Well, I guess you guys all recognize Acxiom. Check out what is going on with them. They are bringing in 1.36 billion in revenue, and yet, their o/s is only 88 mil. Their profit margin is 5.54% and their pps is $24.87.
So, what do I get from that? I think they illustrate the point perfectly the problem that we are facing.......that our capital structure needs some work. I mean, I love Labwire and Dex, but I have to be real and say that we aren't going to touch that kind of revenue for a very long time, and yet our o/s is bigger by ~52 million shares....that just kills our eps since it is determined by the amount of shares in the o/s. We all want to see the pps of Labwire in the $$'s and not in the penny's, so what is the solution?
Well, I know what the solution is not.....a r/s. First of all, once we get to the OTC we are going to want institutional investors to be willing buy our stock. I do not think that would be a tough thing to do since LBWR's list of Fortune 500 companies is impressive and growing. I do know, however that a r/s is messing with the equity of the stock, and therefore will not even be considered by institutional investors since they reason that if a company did a r/s once, they will probably do it again. Also, a r/s would not reduce the restricted shares, it would just reduce the # of shares in the float, and thus still have that huge amount of over-hang.....the float is not the problem.
What I'm hoping to see is the managment retiring enough of the 144's to get us under an o/s of 100 mil. I know it sounds crazy, but is it? It would not cost the company any money, and could be done at any time. It sounds like management would be giving up a whole lot of money, but let me pose this question. Would you rather have 72 mil shares worth .10 each, or 45 mil shares worth .50 each? Can you imagine what the price would be if we saw these PR's come out over the course of 2007?
1. Labwire retained firm for audited financials in order to move to OTC.
2. Labwire releases audited financials and files Form 10.
3. Labwire announced move to the OTC, now fully reporting.
4. Labwire's management retires 40 mil shares.
What do you think the pps would be after that? I'd think the AMEX would be in our sights.
