AWRCF Conference Call-- I attended the meeting and was the only investor physically there. It was worthwhile to meet the CEO, the CFO and two directors in addition to Michael Hagan, a partner at Coudert Brothers who is their legal counsel. Mandjb did a good job of summarizing the important points raised, but here are my impressions:
--The presentation by the CEO contained no new info not previously disclosed so added nothing. In fairness, that is probably more due to the new disclosure laws than to the CEO. My impression from watching the CEO and CFO face to face is that they are honest and well intentioned but not brilliant, inspirational or polished. Don't really think they are going to be particularly effective in promoting the stock. Hope they will be good managers and revenue and earning growth will promote the stock.
--They had $210 million in revs for first 9 months of '04 and expect $300 million for the year. That's $90 million in the 4th Q compared to $73 million in the 3rd Q. A lot of that increase is because of rising copper prices but certainly not all of it so they appear to be continuing to increase tonnage sales at a healthy pace.
--Of course they didn't comment on earnings but did say as pointed out by mandjb that there may be an additional but much smaller doubtful receivable provision in the 4th Q. The strenghtening of the Thai Bhat and Aus $ since the end of Q 3 will produce a foreign exchange gain for Q 4 which could offset any doubtful receivable provision.
--They said they had met that day with AMEX officials regarding a listing and the AMEX official told them they already qualify for a listing. They said they definitely intend to seek an AMEX or NASDAQ listing. I asked them how long before they moved up and the lawyer said: "To be conservative I would say by the end of the 3rd Quarter". Now maybe there will be a snag, but I firmly believe it is a priority for them to move to a higher exchange.
--They mentioned a desire to "increase capital". The CFO just blurted it out like it was obviously a good thing for their further growth. I don't think he was prepared for the concern it would generate which to me shows a lack of sophistication. When questioned he made it clear that it was their intention to get the stock price up first by switching exchanges and generating strong results prior to selling additional shares.
--I think the rapid rise in copper pricing along with their strong growth in tonnage sales is drawing down their strong cash position and that has hindered their growth to some extent like many fast growing companies. However, the price of copper has leveled off recently and sales have been strong so I don't see a real cash flow problem just maybe a desire for capital to grow even faster.
--If the former CFO and any others are found to have been unethical I don't think it will have any long term negative impact. I think current management is honest and well intentioned and that is what matters.
--AWRCF is my largest position. It was interesting today that the volume was huge and the stock down. Could have been a delayed reaction to the cc which I doubt. Could be that some one planned to sell into a cc rally and dumped anyway when it didn't occur. Could be that they had subsequent meetings or phone calls with other investors who didn't like what they heard. Hard to say. For the record, I bought a little more yesterday and a lot more today. I think this stock will eventually stumble to a fair valuation particularly with an AMEX listing. The 4th Q earnings could still have some clean up in them, but I think 1st Q earnings could reach .25 per share. A going forward PE of 10 would mean a stock price of $10.
News 
Market Data 
Discover 
