Edward Richardson: Yes.
P. Ross Taylor: Okay. So look, I mean, that’s really setting up. Well, we’ve got a market here that seems to be focused on looking at its speed and concerned about what’s going on, which leads to my next area. I know [indiscernible] ask two questions, but Ed and Wendy know me, so they know that I’m not going to only ask two questions.
Edward Richardson: That’s okay.
P. Ross Taylor: So, one of the things I’m looking at is at this point in time, this company is actually selling at net-net working capital. The market is assigning a zero value to the business. It’s literally saying that Richardson is worth nothing other than what you can liquidate its current assets for. When I look at that, that tells me that there’s something really just kind of wrong with the thinking. And now, Ed, you’ve done an amazing job of changing this company. I mean, this company going back a number of years was a highly cyclical, really focused into one primary area, and you’ve diversified it. And I think your dad would be really proud of what you’ve done with it. And to be honest, what I’m hearing on this call, I think in two years, your dad is going to be — would be beyond satisfied with you ever.
I think he’d be enthusiastic, because I’m hearing you guys talk about the put these pieces together. We’re looking at a return to not just the level of earnings you had last year, but earnings that can be meaningfully higher than that, meaning, when I model it out I get a $1.82 a share in fiscal 2025 for you. And I think that the inability of the market to appreciate that is problematic. But I also want to say that I think that there are some things that we can do with that. One is, in the past you’ve indicated that your banking accord doesn’t allow you to buy back stock. When you’re selling at net-net working capital and I’ve talked to a bankers. I have my – one of the guys I golf with is a vice chairman of one of the world’s four or five biggest financial institutions.
They don’t bank down at this level, but he tells me it’s absolutely asinine you can’t buy back stock in your bank accord, given your balance sheet. And I think that, I for one would argue we need to get a bank accord that reflects what [REL] (ph) is today and where it is going, which is, it’s going to go parabolic, it’s going to be a massive free cash flow generator. There is no risk to a bank in lending you money. So it’s time that we start to get banks that respect us and give us that type of opportunity. So that’s my Ross Taylor [Smitty] (ph) comment at the moment on your banking situation. I do think that if you do that, we’re looking at a stock that’s down a lot this year. You have $5 million plus, you have 100 acres plus in unused land, that’s a zero asset right now, really, it’s being farmed at this point.
Wendy Diddell: Correct.
P. Ross Taylor: What kind of —
Edward Richardson: That’s correct.
P. Ross Taylor: What do you get on leasing out that acreage to be farmed.
Edward Richardson: We get about $340 an acre. We sold 55 — we sold 225 acres of that 55,000 acres, so it’ll tell you pretty much what the value is.
P. Ross Taylor: Right. So, right now you’re getting about $34,000 a year on that land.
Edward Richardson: That’s true. We think that ultimately that the electric locomotives with progress rail and [indiscernible] are going to be huge business and we want to keep space that we can expand backwards. We’re on 25 acres in the front of the 120 acre property and we want to keep space to be able to expand.
P. Ross Taylor: So if you sold off 50 acres and you got the $55,000 you did before and you turn that into — if you bought 10 year treasuries, you’d literally increase the income off of that land by a factor of four or five. And so I’d suggest — and you could use that — I mean, that’s in this environment and that still leaves you a lot of land to expand, leaves you 50 acres to expand into. But it does strike me as in some ways, you’re on the cusp of something major here. The market isn’t smart enough to figure it out. But there’s a reason why I — my career is based on the stupidity of the market. I like to tell my daughter [Multiple Speakers] I tell my daughter [Multiple Speakers] markets are stupid. So we look at that going.
If we could do something that’s in the way of monetizing some of that asset, there’s a lot of good things we could do even to just make more money. That’s a penny plus a share pre-tax. At the same time, you could use that. Maybe if your bankers would wake up, they might let you use some of that to retire stock in a Dutch auction or something and take the selling pressure off in the end of the year because people are looking at their feet, not at the opportunity. So I think that’s something we need to look at, because there is zero reason why this stock should trade at net-net working capital. Your business is worth easily a low teens multiple on the earnings power of this business. And the net-net working capital should be an add-in. I don’t have anything in my universe that’s trading at net-net working capital.
I challenge people to find much that is in the world. Now on to my next, because I am going to — because this is Ross and Ross goes places where things –.
Wendy Diddell: Your last one, Ross. Last one. We got to give time to everybody.
P. Ross Taylor: This is it. I’m really frustrated with your board. You’ve got three directors who’ve been there for 10 years. They own zero stock. I will be honest with you. You guys who’ve been there for 10 years shouldn’t own less stock than my dogs, right? I mean, it’s not acceptable. And I look at your business, it’s changing. Your business is going places you weren’t before. I would love to see you change your board. I’d love to have you put people on who believe enough in this company that they’re willing to spend the price of a happy meal and a latte every day to buy a share of stock. And I also would like to see those people come in with expertise. Because, Ed, you’ve got such a great opportunity here and you’ve done such a great job with this company that if you surrounded yourself with people who have green energy background, people who have background in the semi-cap equipment space, people who have capital markets background and things of that nature.
And those people not just brought their expertise, but brought their pocketbooks and bought stock. I think it would send a message to the street that they just — that they need to look at this opportunity and they need to take you guys seriously. And I know it’s always hard. I understand boards tend to — these are people who have been around for a long time. But from my outside perspective, their unwillingness to commit capital to buy stock and the lack of clear industry expertise and exponential expertise tells me that we need as outside investors, I need people to be my champion on your board and I need people to bring you the skills so that you guys get everything you can out of this opportunity. And so, I would strongly advocate we bring some new blood into the board.
I’m in my mid-60s, so I hate calling people in their 70s old. But that we need new people on this board who bring that expertise and honestly come in and are excited by this opportunity and say, you know, I right now can buy a stock for $0.00 to $0.50 above net-net working capital that I think is going to earn close to $2 bucks in two years. And that’s insane and I want to own a lot of them. And I’ll let others talk now.
