Question-and-Answer Session
Operator
(Operator Instructions) Our first question comes from [Harry Catchidorian] - Self Employed.
[Harry Catchidorian] - Self Employed
While I understand your description of the quarter as being excellent, I see that as a decreasing income per share. I don’t see that as being excellent when there’s a downturn.
Theodore M. Prociv
Our perspective on this is a longer-term perspective than just a quarter. Maybe I should have qualified that. As part of the transformation, our goal has been to continually increase our backlog to create the viable type of work that’ll keep this company moving. There are a number of reasons that details that happened in the past quarter which I would not consider negative but they’re just details that happened in the course of business. From our standpoint those are behind us and the rest of the year should be very, very successful.
[Harry Catchidorian] - Self Employed
This leads to the second question. All of the results; backlog, earnings, etc.; all eventually get assimilated and represented by stock price. The stock price we can go back many years and we’re not showing progress. We’re regressing and the report card is price per share. And that leads into another question. Why with that money on the books is Versar, and I bought these shares with my own hard-earned money, why isn’t the company investing money in Versar? Why isn’t the company buying back shares rather than risking the money in other investments? We could have bought 100,000 shares with that money.
Theodore M. Prociv
We’ve had investment banks consult with us on that issue. That issue has come up a number of times. We have been advised and we certainly agree with the advice that it would not be a good time for us to buy back shares. One of our biggest problems in the market is liquidity. We don’t have a sufficient number of shares out there to be traded. The shares that are out there are being held and not traded. So by pulling back even more shares we would stifle the growth of the stock.
To answer your first question as to the stock. You just have to look at the whole market conditions that are going on out there. I track 19 other competitive companies that are in the CNE range. Those companies no more than three months ago were operating at an average PE of 22+. Today they’re operating at a PE of 8. So the entire market space has gone down that we’ve been tracking. I don’t know that there’s anything that anybody can explain about this market and certainly I’m not an expert on this market but I know that I’m not alone in this market. I don’t know what I can do better to get someone to come back.
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