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From: Jimjones1972 (Rep: 3)Date: 07/04/2018 14:41
Forum: Mining and Commodities Eh! - Msg #6182 - List NPT msgs Thread #674019221 (Rec: 0)
NPT.C (Plaintree Systems Inc) Due Diligence Report

Most Recent Financials + Management Discussion Highlights. Found On www.Sedar.com
Year End Results Will Be Released August 2018
Symbols: Canada – NPT / USA - PTEEF
Price: $0.165 CAD / $0.14 US
Common Shares: 12,925,253
Options/Warrants: 0
Insider/Institutional Holdings: 6,024,676 or 46.6%

Important Announcements From MD&A and Most Recent News Release:

Last News Release: David Watson, the company's president and chief executive officer, commented by stating: "Plaintree's biggest product line, our mining domes, posted strong revenues this fiscal year and leave us with a substantial backlog for next year due to buoyancy in several mining sectors. In addition to this, the product lines for all of Plaintree's aerospace divisions have increased in profitability over the course of this year. I would be remiss if I didn't comment on the strong growth of our foundations for unstable soils and flood zones. After three years of investment in marketing and sales for this product line, it is expected that we may almost triple our previous year's sales."
Q3 MD&A (Page 10): These consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As at December 31, 2017, the Company had an accumulated deficit of $3,458,891 and, for the period then ended, the Company had comprehensive earnings of $1,746,353. As at December 31, 2017, the Company had working capital of $10,290 and $NIL cash on hand. These material uncertainties may cast doubt upon the Company’s ability to continue as a going concern. However, due to the recent improvement in the financial performance of the Company, management is reviewing whether the going concern note remains appropriate and whether it should be removed from future statements. In assessing whether the going concern assumption was appropriate, management took into account all relevant information available about the future, which was at least, but not limited to, the next twelve month period following December 31, 2017

Financials (CAD)

ASSETS
Trade Receivables: $4,909,029
Unbilled Revenue: $184,431
Inventory: $1,772,214
Prepaid Expenses: $72,344
Property, Plant & Equipment: $4,696,703
Intangible Asset: $561,359
Total Assets: December 2017 - $12,196,080 (March 2017 - $10,342,103)
LIABILITIES
Cash Deficit - $1,119,642
Trade Payables: $1,647,113
Deferred Revenue: $2,215,186
Current Bank Note Payment: $1,148,831
Portion Of Long Term Debt: $45,000
Due To Related Parties: $554,447
Deferred Government Assistance: $146,000
Obligation Under Lease Capital: $455,519
Long Term Debt: $92,925
Due To Related Parties: $5,565,044
Total Liabilities: December 2017 - $13,564,220 (March 2017 - $13,456,597)

Nine Month Sales Performance

Revenue: $12,488,416 (2016 - $10,033,364)
Cost Of Sales: $8,672,752 (2016 - $8,352,694)
Gross Margin: $3,815,664 (2016 - $1,680,670)
Net Income: $1,746,354 (2016 - -$1,039,871)
Earnings Per Share - $1,746,354 / 12,925,253 = $0.135 Trading at less than two times earnings

Management Discussion From Q3 2017
Overview Plaintree Systems Inc. (“Plaintree” or the “Company”) was incorporated in Canada under the Canada Business Corporation Act and is publicly traded on the Canadian Securities Exchange (“CSE”) under “NPT”. The Company operates an Electronics division [the Hypernetics business, Summit Aerospace USA Inc. (“Summit Aerospace”)] and a Specialty Structures division (the Triodetic business), Spotton Corp. and 9366920 Canada Inc. (operating as Madawaska Doors). Plaintree is a diversified company with proprietary technologies and manufacturing capabilities in structural design, aerospace and telecommunications. The Hypernetics business manufactures avionic components for various applications including aircraft antiskid braking, aircraft instrument indicators, solenoids, and permanent magnet alternators. The Triodetic business is a design/build manufacturer of steel, aluminum, and stainless steel specialty structures such as commercial domes, free form structures, barrel vaults, space frames, and industrial dome coverings. Summit Aerospace specializes in the high-end machining of super-alloys for the aircraft and helicopter markets. Spotton’s business involves the design and manufacture of high-end custom hydraulic and pneumatic valves and cylinders for the industrial, oil and gas markets. Madawaska Doors Inc., through its wholly-owned subsidiary, 9366920 Canada Inc. involves the manufacturing and selling of high quality, 100% natural solid wood custom doors and related parts and materials. Until June 2017 the Speciality Structures division included Arnprior Fire Trucks Corp. (“AFTC”). On June 6, 2017, the Company announced that it had completed the sale of assets and business of AFTC. The address of the Company’s registered office and principal place of business is 10 Didak Drive, Arnprior, Ontario.
Total product revenue for three and nine months ended December 31, 2017 was $4,461,762 and $12,488,416 compared to $3,057,288 and $10,033,364 (discontinued Arnprior Fire Truck Corp business removed) for the respective periods ending December 31, 2016.
Plaintree has two diversified business divisions: Specialty Structures and Electronics.
Plaintree’s Electronics Division revenues of $1,343,421 and $4,499,671 in the three and nine months ended December 31, 2017 down from revenues of $1,606,831 and $4,628,647 for the three and nine months ended December 31, 2016.
Plaintree’s Specialty Structures Division revenue increased to $3,118,341 and $7,988,745 in the three and nine months ended December 31, 2017 from $1,450,457 and $5,404,717 in the three and nine months ended December 31, 2017 and December 31, 2016 respectively.
Total gross margin increased in the first three and nine months of fiscal 2018 to 32% and 31% from 16% and 17% for the same period in fiscal 2017.
Research and development expenses were $331,420 and $947,357 for the three and nine months ending December 31, 2017 compared to $276,160 and $904,509 for the three and nine months ending December 31, 2016. Research and development expenditures consist primarily of development engineering and personnel expenses. Research and development expenses are expected to remain at comparable levels throughout fiscal 2018.
Finance expenses were $388,007 and $996,731 for the three and nine months ending December 31, 2017 compared to $247,497 and $718,413 for the three and nine months ending December 31, 2016. Finance and administration expenses consist primarily of costs associated with managing the Company’s finances, which included financial staff, legal and audit activities. Amortization of intangibles related to the business of Summit Aerospace is the primary reason for the increase in finance and administration expenses. Finance and administration expenses were higher in fiscal 2018 due to legal fees associated with the new financing and sale of the discontinued operations.
Sales and marketing expenses were $119,145 and $424,213 for the three and nine months ending December 31, 2017 compared to $130,307 and $480,864 for the three and nine months ending December 31, 2016. These expenses consisted primarily of personnel and related costs associated
Outlook – Going Concern
These consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As at December 31, 2017, the Company had an accumulated deficit of $3,458,891 and, for the period then ended, the Company had comprehensive earnings of $1,746,353. As at December 31, 2017, the Company had working capital of $10,290 and $NIL cash on hand. These material uncertainties may cast doubt upon the Company’s ability to continue as a going concern. However, due to the recent improvement in the financial performance of the Company, management is reviewing whether the going concern note remains appropriate and whether it should be removed from future statements. In assessing whether the going concern assumption was appropriate, management took into account all relevant information available about the future, which was at least, but not limited to, the next twelve month period following December 31, 2017. The Company has in place a credit facility of up to $2,100,000 through its bank based on acceptable trade receivables and inventory. The availability of the credit facility to the Company as at December 31, 2017 was $2,100,000 of which $360,292 was in use and a letter of credit in the amount of US$287,200 (CAD$360,292) leaving $1,739,708 available. The Company’s analysis of forecasted sales and expenses indicate improvement in both sales and cash flow as a result of contracts bid and/or signed, and their expected margins on these projects. As a result, the Company believes that it has sufficient cash resources to meet its obligations, beyond the next 12 months. However, should (i) the Company’s bank credit facility fail to be available or fail to have sufficient availability to meet the Company’s cash requirements; (ii) forecasts fall short of expectations in one or more of the Company’s divisions; and/or (iii) any unanticipated unprofitable event occurs, this will impact the Company’s ability to generate sufficient cash to meet its requirements and this will impact its ability to continue as a going concern. The Company would then implement a strategic review of its portfolio of companies to maximize shareholders value.
The Company leases a 135,500 sq. /ft. building at 10 Didak Drive in Arnprior, Ontario. The Company along with its wholly-owned US subsidiary owns a 16,300 sq. ft. manufacturing facility in Pocono Summit, PA. The Company, through a wholly-owned subsidiary owns a 33,000 sq. ft. manufacturing facility in Barry’s Bay, ON for the manufacturing of its Madawaska Door business.
Latest news release:
Plaintree earns $1.74-million over nine months
2018-02-21 15:36 MT - News Release
Mr. David Watson reports
PLAINTREE SYSTEMS INC. ANNOUNCES Q3 - 2018 RESULTS
Plaintree Systems Inc. has released its unaudited consolidated financial statements and related management's discussions and analysis for the three and nine months ended Dec. 31, 2017.
During the first nine months of fiscal 2018, Plaintree realized revenues of $12,488,416 up from $10,033,364 for the same period of fiscal 2017 with positive earnings of $1,746,354 compared with a net loss of ($1,039,871) in the respective prior period. Net income (losses) from continuing operations during the first nine months of fiscal 2018 and 2017 were $1,203,792 and $(680,911), respectively, before income (loss) from discontinued operations.
David Watson, the company's president and chief executive officer, commented by stating: "Plaintree's biggest product line, our mining domes, posted strong revenues this fiscal year and leave us with a substantial backlog for next year due to buoyancy in several mining sectors. In addition to this, the product lines for all of Plaintree's aerospace divisions have increased in profitability over the course of this year. I would be remiss if I didn't comment on the strong growth of our foundations for unstable soils and flood zones. After three years of investment in marketing and sales for this product line, it is expected that we may almost triple our previous year's sales."
The notes to the financial statements and management's discussion and analysis for the period ended Dec. 31, 2017, contain comments from management regarding the ability of Plaintree to continue as a going concern if certain risk factors come to be (see Section 2(d) of the notes to the financial statements and the section entitled "outlook -- going concern" in management's discussion and analysis). Due to the improved business outlook for the company, management is considering whether the going concern note will continue to be necessary to be included in future financial statements of the company.
For more information on these results, please refer to Plaintree's annual 2017 financial statements, together with the related management's discussion and analysis report, copies of which can be obtained from the company's website and/or under Plaintree's name at SEDAR.
About Plaintree Systems Inc.
Plaintree has two diversified product lines consisting of specialty structures and electronics.
The specialty structures division includes the former Triodetic group with over 40 years of experience, is a design/build manufacturer of steel, aluminum and stainless steel specialty structures, such as commercial domes, free-form structures, barrel vaults, space frames and industrial dome coverings, Spotton Corp., a design and manufacturer of high-end custom hydraulic and pneumatic valves and cylinders, and Madawaska Doors, a design and manufacturer of premium solid wood doors.
The electronics division includes the legacy Hypernetics and Summit Aerospace USA Inc. businesses.
We seek Safe Harbor.
© 2018 Canjex Publishing Ltd. All rights reserved.

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