Veltex Corporation (VLXC)

[Growth And Value]

Remember, Veltex is only about 6 years old:

Matin basically build this company from scratch. Using mostly his own money, he built Velvet Textile Mills. Earnings have been reinvested to grow the company.

Don't make it sound like they have been in business a long time. Here is what I can gather about Net Income/Retained Earnings thru 2002.

1999 .59 Million
2000 .66 Million
2001 1.3 Million
2002 1.65 Million

Total Net income through 2002 $4,181,981 per the Anne Tahim Audit. If you add the four numbers above, it comes out to 4.2 Million (Rounding) correctly shown as "retained earnings" on the Balance Sheet.

How do you expect a company this size to buy a company with about 20 Million in sales with cash? Remember, inventories and Accounts Receivable are increasing too, so your cash balance at the end of 2002 was $2,064,647.

Also, from the Anne Tahim audit, Loans payable to stockholders was about 3.2 million (no interest is given). If you were these guys, wouldn't you want to convert this debt into stock? Especially, if you felt the stock price was eventually going to increase based on improving fundamentals?

Matin hired Aaron Sherman & Associates, Inc. to do the audit of 2001 and 2002. It's too bad these guys didn't understand the Bangladesh "tax holiday" rule. They thought of this as a accounts payable, but really VLXC is not liable for this "tax" if they "reinvest" this money which is what they did with the KCA acquisition. My belief is that since Aaron Sherman & Associates, Inc. did a poor job, Matin hired Anne Tahim to basically "finish" the audit using Aaron's numbers. This way, Matin didn't have to pay for a whole new audit.

Anyway, believe what you want. I believe the tables are turning and VLXC goes up from here!!!