Thursday, August 22, 2019

Northeast Modular Home Factory Caught in Parent Company’s Financial Mess

The August 14, 2019 SEC filing of FORM 10-Q shows quite a story of what can only be a financial mess which includes through no fault of their own, KBS Modular in Maine.

CLICK HERE to read the entire SEC FORM 10 Filing

This acknowledgement was included with that SEC filing.

We acknowledge that the Company continues to face a challenging operating environment, and we continue to focus on improving our overall profitability, we reported an operating loss for June 30, 2019. We have incurred significant operating losses in recent years and, as of June 30, 2019, we had an accumulated deficit of approximately $93.6 million. Working capital has remained negative over the past several years. Cash used in operating activities, remains negative which has required us to generate funds from investing and financing activities. At June 30, 2019, we had outstanding debt of approximately $8.8 million of which $6.6 million is currently payable. These factors raise substantial doubt about the Company's ability to continue as a going concern.

Back 2016 construction investment firm ATRM Holdings, Inc. (OTCQX: ATRM), owner of KBS Builders, says it acquired certain assets of EdgeBuilder Wall Panels, Inc., a maker of wood foundation systems, and Glenbrook Lumber & Supply, Inc.

Then in early 2019 Digirad Corporation, which designs, manufactures and distributes diagnostic medical imaging products, purchased KBS Modular Builders, Inc. properties in Pairs and Waterford, Maine and the former Keiser Modular Homes plant in Oxford, Maine.

At the time of that purchase I asked since this is not an acquisition by a company with any knowledge of East Coast modular housing, who are the people about to operate 3 modular home factories, veterans or newbies to the industry?

It appears they were newbies!

1 comment:

Bill Hart said...

Your right prefab wall panel plants are a dime dozen, every multi site size lumber yard has an underused least what East of the Rockies. I note they were even still offering AWWF foundation panels? That effectually went out years ago with the advent then prompt dominance of precast foundations like the Advance-Superior systems.. truly naive newbies..Gary,they needed a market study a couple years or even I could have helped em; or perhaps call in Bill Bobbitt or Roger L. ...but as you say Gary, naive provincial newbies!