VLPS Lighting Services International today reported financial results for the three-month and nine-month periods ended June 30, 2003; the report is filled with news certain to surprise investors and industry members. On a positive note, the company showed improved performance, with net income of $.23 a share for the quarter that ended on June 30, 2003. In addition, the board of directors has approved a dividend of $.04 a share.
According to Rusty Brutsche, chairman and CEO of VLPS, “This will be the first dividend the company has paid since 1997 and reflects the improved condition of the company's balance sheet, cash flow and market conditions. We certainly take pride in our ability to provide a return to the company's shareholders after the difficulties experienced over the past several years as we restructured the company and deleveraged the balance sheet.”
On the other hand, the board announced a plan to deregister the company’s common stock with the Securities and Exchange Commission and delist the stock from NASDAQ, all by September 19.
Companies don’t normally delist when the financial picture is improving. However, Brutsche said, "We believe that the disadvantages of being a public company far outweigh the advantages. In addition to the significant time and cost savings resulting from deregistration, the company's management will be able to focus its attention and resources on implementing and improving the company's business plan and enhancing the company's long-term enterprise value. While we anticipate that the company's shares will be traded over the counter (OTC) on the pink sheets, there is no guarantee that any broker will decide to make a market in the company's common stock.”
Among the factors that led to the decision, apparently, were the market value currently applied to VLPS by public markets; the costs associated with preparing and filing the company’s periodic reports to the SEC; and the lack of analyst coverage plus the minimal liquidity for the company’s common stock.
This is only the latest twist in the story of VLPS, which was spun off from Vari-Lite, when that latter company became part of the Genlyte family of lighting companies. Vari-Lite founder Rusty Brutsche stayed on with the VLPS division, which supplies lighting gear to concert tours, television, and special events.
The announcement had a depressing effect on VLPS’ stock price, which closed today at $1.90 a share, down $.29 or 13.24%.
To read more, check out the VLPS listing on Yahoo Finance, by clicking here.