Sunday, September 01, 2013

API Technologies Corporation (ATNY) Not For Me

API Technologies Corporation (ATNY) offers a complex line of electronic components and systems to government customers in the NATO countries.  The business model is right up my alley but defense contractors everywhere are up against major economic headwinds.  Many European NATO countries will have to trim spending to stay within EU budget guidelines.

They've been losing money for the past three years, with only the most recent quarter showing positive earnings.  Their long term debt has absolutely exploded since 2012.  Their retained earnings are massively negative and FCF for much of their recent history has been negative.

I'm sorry, folks, but if the financials don't meet my standards then I don't waste time delving into the business model.

Full disclosure:  No position in ATNY at this time.