Nick Gentry – Conference Call Notes – November 8, 2011
Thank you to each one of you for attending our first quarterly conference call. We appreciate all of our investors –you are an important stakeholder in our future success.
Let me first begin with a general overview of the current environment of our accounting/finance roles here at MFW. As the new executive responsible for the financial reporting of the organization, there are several changes in how we view our business that are important to let you know about, that will affect how we report going forward. I view this 3rd Quarter 2011 reporting period as a bridge between the old and the new. Among the changes taking place:
1. Beginning with this period, we are reporting all related companies for the organization. Specifically, with the roll-up of Informed Logistics Technologies, our intellectual assets, in the 3rd quarter, and our decision to also include MFW Holdings, comparative financial analysis with prior periods is not overly instructive.
2. We have engaged an audit partner to review our financial statements. The firm Weaver Martin and Samyn (Weaver) has been engaged to audit our Final 2010 Balance Sheet in addition to all of our 2011 activity. The selection of Weaver is a significant step for us to get to audited financial statements, which will happen for our 4th Quarter filling, which will be presented some time prior to or on March 31, 2012.
3. As part of reviewing our current plan with Weaver, the firm is anticipating the MFW will receive a Going Concern qualification as part of their letter based on our lack of recent profitability and current low cash balances. The company does not believe that this prospect will have any negative effect on continuing to conduct business or ultimately to refinance our current bank note in the future.
4. Once our audit is completed, I do believe it is likely that management will go back and revise our 2011 public filings, for the first two quarters so that we have quality comparative data going forward in 2012. It is important to establish milestones for the company so that investors can clearly denote the improvements in performance that we fully expect of the coming years.
With these points noted and given the challenges that I just laid out of reporting apples this quarter and trying to compare it to oranges in prior quarters, I am only going to make a view brief observations as we see the progress of the organization:
· Revenues are up 29% in Q3 for 2011 vs 2010, up 24% for the entire year to date
· Net Margin, which we believe to be a much more significant measurement of how the company is doing is up 79% in Q3 2011 vs. 2010, up 59% for the year to date
· Net Losses were reduced 59% in Q3 for 2011 vs. 2010, reduced by 57% for the year. We anticipate becoming profitable on an EBITDA basis in the second half of 2012 and profitable on a net income basis thereafter.
· The goal of getting to profitability is foremost on our minds. We continue to review our efforts to build the topline through new selling and product initiatives and growing current customers, all made easier with the improvement of our credit standing.
· One last thought – About the Balance Sheet – a significant portion of the most recent rounds of financing have been poured into right-sizing the balance sheet, to get our carriers paid. It cannot be understated how important this is to any plan moving forward. Thanks again for you capital to make it happen.
With that financial overview, Kevin and I will be glad to take any of your questions at this time.
