Saturday, December 17, 2005
some more companies
Revenues went up sustantially from 2003 to 2004. But these guys lost money every year, even in 2000 when revenues were more than twice as high as 2004.
WEGI (sec), emergency response, disaster restoration services. Hazmat, wetlands and natural resources restoration. Going concern qualifier. Balance sheet looks weak. Gross margins are generally low: 9% in 2004 going up to 25% in 2005. Lost a ton of money in 2004, made a small amount in 2005.
WHAI (sec), healthcare staffing to hospitals etc. Temp and permanent. Mostly nurses. SEC dispute ongoing: stock options accounting.
You can see the huge change for an acquisition on the balance sheet from 2003 to 2004. It was weak before and it's even weaker after. 25% gross margins. Massive interest expense kills all profits.
WKOL (sec), "Wako Logistics". They own 2 Hong Kong non-asset freight businesses shipping from HK and PRC to the rest of the world. These formed a wholely owned business in PRC. In April 2005, they acquired a UK freight business operating in the US. 21 million shares. Tonnage increased in 2004.
Balance sheet is OK. Assets are mostly receivables. Liabilities are mostly payables. $1.1 million equity. Only earned $276K in 8 months ending Dec 31, 2004 ($884K in year ending April 2004, and $587K in year ending April 2003). Costs went up in 2004. Cash flow from ops has deteriorated since 2003 to zero. This is a very low asset business. 20.4 million shares. Dilution is small and for cash and services. Lots of related party transactions.
A telling sign is that operating income is very small in relation to SG&A, 15% for 9 months in 2005.
Q3 2005 (includes acquisition): Revenues doubled, but income only doubled (should be much more). Earned 2 cents in 9 months. Share count is increasing. Receivables keep climbing and cash flow from ops continues to get worse. They spent $1 million on the acquisition and the increase in earnings seems worth it (hard to know for sure).
They did another acquisition in Oct 2005 for 250K restricted shares, was a related party transaction.
The stock is selling for $3.05! Why? They have maybe 3 cents in earnings. Stock has been steadily increasing.
WLGC (sec), embedded software, predictive keyboard (i.e. it tries to predict what word you're going to type so that key entry is faster). One patent. Almost no revenue. Huge losses.
WLRE (sec), a REIT for commercial and industrial real estate. 97.4% leased. Chicago, DC, NJ, Minneapolis, Detroit, Dallas, NY, Boston, Atlanta, LA, Orange Co, 23% other. Business services, banks, insurance companies, legal, electronics, etc. 33% other. BP Amoco, NASA, Leo Burnett, US Bancorp, Nestle, etc. etc. 50% other.
They've expanded quite a bit every year going back to 2000, doubling every year until 2004 when assets only increased 4%.
Earnings per share have remained steady at about 42 cents each year (share count has increased quite a bit). Funds from operations have been around 75 cents. Dividends have been 70 cents in recent years (was higher in 2000, 2001, and 2002).
Stock is probably worth around $6.50. It's selling for $6.85.
WLSA (sec), wireless services in Canada. 10 retail stores, corporate sales force, rental center, service dept. Balance sheet is ok. 19% gross margins. Loss from operations in 2004 (small operating profit in 2003, but a net loss). They had to write down $1.2 million of goodwill (the wireless business was an acquisition).
Skip ahead to the most recent quarter: Balance sheet has deteriorated. Gross margins have improved. Operating profit of 4.3%. Diluted net earnings of just under 1 cent for 3 months. Cash flow is bad. Debt is increasing. Still doing more acquisitions (with stock and cash).