Notes
Littlefield (LTFD)Two lines of business. 1. Owns and operates charitable bingo halls, 2. Hospitality: "party rental business, catering, and installation of tents for events, parties, weddings, festivals, etc. as well as a small amount of event planning (music, flowers, catering, etc.)."
http://www.littlefield.com
Evidence of flaky management:
- "Premiere Tents & Events increased its revenue by 42% or almost $160,000 but increased its Q1 2007 operating loss by $13,000 or 9%. This development will require some very serious investigation." What is that supposed to mean? Does management know where the money goes when it leaves the cash-register or not?
Thoughts: I suspect perception of management as potentially unreliable is knocking a good 20% of the share price: every report includes a significant number of "one-time" expenses. Basic demand seems good. Revenue growth in both businesses seems good, and cheap. However, the per-share growth is not so good due to dilution from a stock dividend last year (what was the point of that?). It is promising that the ratio of current assets to liabilities has improved significantly recently.
12May07
Legal matters. LTFD is a plaintiff in a trial (on appeal), previously lost only because of an inability to serve the defendant. If the company's representation is accurate, it is a likely win, which ought to boost stock price (assuming defendant--an individual--can pay). A trial is anticipated in late summer or early fall, 2007.This action is more than a year away: What would a reduction in bingo licenses from 12 to 5 do to profits?
"The South Carolina Department of Revenue issued an administrative bingo violation ... alleging that the Company has an unlawful number of bingo promoter licenses. The Department of Revenue seeks to revoke all but 5 bingo promoter licenses held by the Company's South Carolina subsidiaries and seeks a $5,000.00 penalty. The Department of Revenue has moved to pierce the corporate veil of the Company to thereby attribute the promoter licenses to the Company. The Department of Revenue's theory is that the three South Carolina subsidiaries are invalid corporations and that as a matter of law the Company is the holder of the 12 promoter licenses at issue. South Carolina law provides that a promoter may only have 5 licenses. The Company moved for summary judgment and it was denied. However, the named charities were dismissed from the lawsuit. The case has been stayed until co-counsel returns from active military duty, which is expected to occur around August of 2008. The Company is vigorously defending itself and asserts that it is not the holder of the promoter licenses but rather that its lawfully formed subsidiaries are separate corporations that each holds a lawful number of the promoter licenses."
Growth disregarding unusual charges is good, although per share numbers are flat due to dilution from a stock dividend.
No updated financials yet.
Most of its book value is intangibles.
PS and PB are nice and low.
Current ratio has improved significantly recently.
08JUN07
Recently quarterly report and financial statements.Trailing P/E (ttm, intraday): 20.19
Price/Sales (ttm): 0.88
Price/Book (mrq): 1.22
Current ratio: 2.6 <-- good improvement
No analyst following or estimates. No insider activiity in almost a year.
"First quarter 2007 total revenues for the Company increased 20% over 2006
"Cost of services increased 16% over the prior year's first quarter. This, in conjunction with the higher revenue growth of 20%, resulted in an improvement of gross profit percent (gross profit as a percent of sales) to 31.9% from 30.0% in 2006.
"Adjusted for the noted items above, the adjusted net income was $482,000 and basic earnings per share were $0.04 per share in 2007 versus an adjusted net income of $536,000 and basic earnings per share of $0.05 last year.
As usual with this company there were several "one-time" or notable items: expenses related to a failed attempt to open a market in Arkansas and legal expenses. Those expenses knocked a penny of the per-share net income.
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