Gediminas Jasionis

Forterus, Inc. (OTCBB: FTER) Jumping On Impresive Financial Report

by Gediminas Jasionis January 25, 2010
Forterus - A better tomorrow logoForterus, Inc. (OTCBB: FTER) has booked $383.9 thousand in net income for 2009 which has satisfied the traders merrily, sending the stock price up. In the unaudited financial statements filed just for the sake of investors, the company indirectly depicted the fourth quarter's gross profit to be $2.276 million representing 60% growth since the third quarter and continuing the stable increase throughout the year. Year on year revenue increase was 43%.

Fourth quarter's net income also topped any previous results by a significant margin, with 435% increase on a year on year basis. $259.6 thousand was 6 times the company's average quarterly profit of 2009. In half a year of business operations the providers of sober living services managed to double their cash reserve to $145 thousand and nearly tripled their current assets to end the year with $1.5 million.

The increase was however attributable to half a million increase in receivables (which is not the best way to strengthen balance sheets) and the addition of $419 thousand in other current assets, which were not disclosed in detail, but clearly are not the most liquid.

Liabilities have naturally grown as well, though the current ratio improved noticeably, ending the year at 1.39 against 0.82, which was witnessed amid 2009. The improvement means Forterus has managed to fix their leverage, thus entitling themselves to more borrowing potential.

All in all, the financials look healthy enough to trigger a significant price growth. Would the company be willing to be a more transparent entity, with current revenues and earnings, it could trade at least $0.30 per share (considering the Specialized Health Services industry's healthy multiples of 0.80 for P/S and 15.6 for P/E).

Reference:

Forterus' A Better Tomorrow Treatment Center

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