This is probably the fastest response I've had from a company. Answer came back in less than half an hour.
-------------- Hi Scott,
I'm a shareholder and am naturally concerned re the current carnage. I'd like to know what is being done about the outstanding receivables and if the money is paid will the fact be announced to the market? Also are you maintaining your full year projections as they seem very far off at this point? Perhaps a little reassurance to the market would sooth us loyal share holders.
Thanks for your help and I understand I am not alone in feeling the pain, it must be hell for you at the coal face.
Cheers, Philip
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Hello Philip - thanks for your email (and you are correct about being at the coal face)
I believe the response has been due to disappointment at not be operationally cash flow positive in Q1.
The bad debt provisioning is a conservative accounting treatment mostly relating to a specific client in India. It is this client who is also responsible for the majority of ARR's accounts receivable.
As this client is majority owned by the Government of India, we are comfortable with them and have always been paid in the past. In this situtation, we are attempting to collect on the AR as soon as possible. In future, our purchase orders with this client will take a different format and shorter payment period.
Our new CEO will report on this next week at our AGM and to be released to the ASX. I understand your frustration about the lack of clarity and look forward to being able to explain the issues.
It is very normal to have long-dated payment period on orders with national telcos, with a portion being held up to 12 months. On a small company such as ours this is particularly noticeable and the new CEO will give an indication next week how we intend to manage this customer, process, financial guidance and cash flow moving forward.
Regarding management, our founder and his senior people had 3 previous Nasdaq floats which had been very successful. With the new CEO, I believe we will transition from entrepreneurial culture to one of sustainability and profitability.
In the middle of all of this, there are still some very positive things happening for the company. Thanks for your patience.
Regards,
Scott
Scott Wilkie Vice President Arasor International Limited
