An additional point, PDEX does not provide guidance but the CEO salary was increased by 15% this December 29 to 350K. First increase since 2020. And while he earned a 70K bonus in 2023/2022, this was now revised and they anticipate a bonus in the range of $75 to $300K as ‘one or more of the performance metrics and/or business targets are likely to be achieved in Fiscal 2024. We should have pretty good results with the backlog conversion…
Monogram is an interesting story. PDEX loaned them 1 million or 900 000 a few years ago and wrote it off. However, Monogram was able to repay them in full and gave them a warrant for 5% of the company at the end of 2018., This became valuable when Monogram ipoed in June I would bet that they sold some shares after exercising the warrant in October , otherwise why exercise it for $ 1 250 000 ?
I understand that PDEX is Monogram supplier for its driver which might have been the first reason for this investment.
If I recap your article, management/board are playing shenanigans with risky investments including an incompetent CEO. They are highly concentrated with 3 clients. They are not able to extract full value from their product as they get screwed by their OEM.
First : the CEO turned Prodex around from a quasi bankruptcy and hedgies do not have to trade stocks anymore to make payroll. They are now generating free cash flow.
Second : the 8K disclosure is nothing new, look at last year and the previous year. And they do have an ATM. Strategy of buying back shares when cheap and issuing when dear. But agree that I do not like borrowing to buy back shares. However, the company is not that levered.
Third : Shenanigan imply implies a devious trick used especially for an underhand purpose. Hey, the CEO of Air T is Swenson, one of the hedgies. So big red flag ? Maybe. But $ 1 million is not a big amount. And the overall portfolio with a 6 M market value versus a cost basis of 2.7 M as of Sept. 30 appears like a pretty good return. As they exercised Monogram warrant post quarter, their 1.8 million shares of Monogram should be worth close to 7 million and the whole portfolio 9-10 million ? I wish all shenanigans were like that. Anyway value of the investments is getting close to notes payables. Pretty good in my view.
Fourth : Backlog big increase appears to be for their new thoracic driver. They sold 1.1 million in the first quarter per their news release and show Customer 3 for a similar amount. This might reestablish the balance with their clients and improve their gross margin. And most of the backlog still had to be booked in the 3 last quarters of the year.
Yep the expansion is a material event that could lead to the financials following something thst looks like a stepwise function.
IMO it's never a good sign to see cash getting invested into dubious companies. The AirT isn't nearly as bad as monogram. Monogram simply isn't far along enough to avoid raising additional financing- likely via issuing stock.
An additional point, PDEX does not provide guidance but the CEO salary was increased by 15% this December 29 to 350K. First increase since 2020. And while he earned a 70K bonus in 2023/2022, this was now revised and they anticipate a bonus in the range of $75 to $300K as ‘one or more of the performance metrics and/or business targets are likely to be achieved in Fiscal 2024. We should have pretty good results with the backlog conversion…
Monogram is an interesting story. PDEX loaned them 1 million or 900 000 a few years ago and wrote it off. However, Monogram was able to repay them in full and gave them a warrant for 5% of the company at the end of 2018., This became valuable when Monogram ipoed in June I would bet that they sold some shares after exercising the warrant in October , otherwise why exercise it for $ 1 250 000 ?
I understand that PDEX is Monogram supplier for its driver which might have been the first reason for this investment.
Thanks for this.
If I recap your article, management/board are playing shenanigans with risky investments including an incompetent CEO. They are highly concentrated with 3 clients. They are not able to extract full value from their product as they get screwed by their OEM.
First : the CEO turned Prodex around from a quasi bankruptcy and hedgies do not have to trade stocks anymore to make payroll. They are now generating free cash flow.
Second : the 8K disclosure is nothing new, look at last year and the previous year. And they do have an ATM. Strategy of buying back shares when cheap and issuing when dear. But agree that I do not like borrowing to buy back shares. However, the company is not that levered.
Third : Shenanigan imply implies a devious trick used especially for an underhand purpose. Hey, the CEO of Air T is Swenson, one of the hedgies. So big red flag ? Maybe. But $ 1 million is not a big amount. And the overall portfolio with a 6 M market value versus a cost basis of 2.7 M as of Sept. 30 appears like a pretty good return. As they exercised Monogram warrant post quarter, their 1.8 million shares of Monogram should be worth close to 7 million and the whole portfolio 9-10 million ? I wish all shenanigans were like that. Anyway value of the investments is getting close to notes payables. Pretty good in my view.
Fourth : Backlog big increase appears to be for their new thoracic driver. They sold 1.1 million in the first quarter per their news release and show Customer 3 for a similar amount. This might reestablish the balance with their clients and improve their gross margin. And most of the backlog still had to be booked in the 3 last quarters of the year.
Cheers,
Yep the expansion is a material event that could lead to the financials following something thst looks like a stepwise function.
IMO it's never a good sign to see cash getting invested into dubious companies. The AirT isn't nearly as bad as monogram. Monogram simply isn't far along enough to avoid raising additional financing- likely via issuing stock.