FORD could breakout and run big today
Published: Wed, 07/08/15
 Hello fellow investors / traders, Do not delay. Stop reading this now and get FORD on your screen. Then come back and read this email later.
Time is of the essence. FORD has been trading in a very tight trading range for the past few months, consolidating near 10 year lows. This consolidation has developed a strong base from which FORD could breakout here. And with a tiny $6m market cap and small float, there could be some major upside to come. We see FORD as a short term trade, potentially lasting between 1-5 days, maybe longer. But of course price action will dictate this. FORD was incorporated in 1962, and headquartered in West Palm Beach, Fla., FORD is a designer and distributor of custom carry and protective solutions. The company recently announced plans to build shareholder value... FORWARD INDUSTRIES ISSUES OPEN LETTER TO SHAREHOLDERS REVIEWING PLANS TO BUILD SHAREHOLDER VALUE, 2014 ACTIVITIES AND COMPANY OPPORTUNITIES
Dear Shareholders: Since the current management team, including CEO Robert Garrett, Jr., took over leadership at Forward Industries in 2012, our primary objective has been to grow our business both organically and through strategic acquisition. In FY2013, we hit an important organic milestone: we grew sales to more than $30 million from $22.8 million in FY2011, and returned the Company to operating profitability for the first time since FY2006. The Company turned an operating profit during the first three quarters of 2014. While we are pleased with the increased earnings and return to profitability, we are also realistic and understand the growth challenges that we face. As part of our fiduciary duty to shareholders, we must consider all strategic alternatives, including reinvestment in organic growth, non-organic growth through acquisition, an outright sale of the legacy business and/or other monetization of assets. Your board has retained experienced financial advisers to help maximize value to shareholders in the process. The Company’s common stock price has experienced few catalysts for appreciation since our initial public offering in 1995. Aside from a two-year period from 2004 to 2006, when the Company benefited from a single large contract, the stock has typically traded between $1.00 and $2.50 per share. At our current size, the Company is sub-scale to remain public, especially considering increased costs for accounting and compliance. We strongly believe that getting our Company to appropriate scale through organic growth, acquisition and other measures will benefit all shareholders. This year, we expanded our efforts to find the right transformative acquisition to improve shareholder value, evaluating opportunities similar to our core business, as well as in markets that we believe both to be attractive and that leverage the skill set of our management and Board. While previous CEOs and Boards at the Company have attempted similar transactions, they did not have the relevant skill set or deal experience—we do. For example, we recently identified and pursued a potential acquisition that, if successful, would have been highly cash-accretive, doubled our revenue and quintupled our EBITDA on a current pro forma per share basis. Unfortunately, as part of his campaign against management, Mr. Terrance Bernard Wise has tried to thwart our ability to pursue accretive transactions that would provide the necessary scale to increase our visibility to the markets, and this specific opportunity is now on hold, until the unnecessary distractions stemming from Mr. Wise’s interference are resolved. The Board and management will nonetheless continue to investigate accretive, transformative transactions, for the benefit of all shareholders, while also reviewing potential operational changes, such as shifting from the current, single-vendor sourcing contract to multiple vendors as some large shareholders have requested. We believe at its heart that your Board and management have a fundamentally different vision than Mr. Wise of how to build this business and increase shareholder value. Here is what we have done: - Increased revenue by approximately 45% over the last eleven quarters. - Returned the Company to an operating profit in FY2013 and for the first three quarters of FY2014, after six straight years of losses. - Enacted necessary, difficult decisions to reverse course on business strategies that were no longer viable. - Articulated a clear vision and strategy to create long term, sustainable shareholder value, after almost twenty years of a stagnant share price. By contrast, Mr. Wise is a UK-based businessman with no experience running a public company—his entire experience consists of managing privately-held ventures. Furthermore, while he has freely criticized management and the Board, he has never articulated any positive vision for this Company, and in fact has repeatedly abstained from voting on critical issues while serving on the Board. Simply put, we believe Mr. Wise’s actions are driven by his clear conflict of interest: he and his long time partner, Ms. Yu, are trying to take creeping control of your company without paying a premium to preserve and enhance his exclusive sourcing contract with the Company. That contract has generated fees to Mr. Wise and Ms. Yu of over $3.0 million since March 2012–more than the entire EBITDA of the business during that period and, notably, the value of his investment in the Company. The economic benefit to them of controlling this business and gradually increasing the fees they pay themselves, much as they sought to do during the contract renewal this past March (where they initially sought to increase the contract to almost $3.0 million annually), we believe to be their primary, though never acknowledged, motivation. If Mr. Wise is successful in electing his alternative slate and his hand-picked designees follow Mr. Wise’s lead in making Board decisions, subject to their fiduciary duties, Mr. Wise would effectively control your company and do as he pleases on his exclusive sourcing contract. We don’t think that’s a win for Forward shareholders. Our leadership will continue to keep the Company on the right track for long-term success and profitability—and keep the best interests of shareholders in mind. 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