Forget Earnings--Try Fully Diluted EEBS! A WIRE STORY WE'D LIKE TO SEE
By Justin Fox

(FORTUNE Magazine) – Fort Smith, Ark., April 23, 1999-- TechnaCyber Corp. (ZOWIE, Nasdaq), the nation's seventh-largest trailer park operator, today reported first-quarter earnings excluding bad stuff, or EEBS, of $127 million, or $0.75 per fully diluted share. Its stock closed up 1 3/8, at 7 3/16.

"We realize this is a metric you may not be familiar with," TechnaCyber CEO Ernest "Skippy" Tolliver said in a conference call with analysts. "But we think you'll agree it's a vast improvement over net earnings, operating earnings, or Ebitda."

The company also reported a net loss of $2.4 billion, or $14.17 a share, for the quarter, on revenues of $76,257.26--down from earnings of $7 million on revenues of $132 million in the first quarter of 1998.

"EEBS gives us the discretion we need to get away from the noise of quarterly ups and downs to the true, intrinsic, intended earnings of the company," Tolliver said. "This in turn will enable us to give Wall Street the consistent, steadily rising earnings numbers it wants and deserves."

Analysts reacted positively to the change. "Initially I was taken aback by the multibillion-dollar net loss," said Nancy Dilokvitharayat, an Institutional Investor All-Star trailer park industry analyst with BancAmerica Robertson Stephens Montgomery Goldman Sachs Thai Farmers Banc Diners Club & Co. in Bangkok. "But then the company shared with me its EEBS figures for past years, and I was stunned with the steady improvement it's made. I mean, a 17.8% increase every year on the dot. I think these guys have finally got their act together."

Dilokvitharayat upgraded her recommendation on TechnaCyber from strong outperform, her firm's second-lowest rating, to extremely strong buy. "With a P/EEBS ratio of less than ten," she wrote in a fax to clients, "TechnaCyber is priced to move."

Even earnings purists had good things to say about TechnaCyber's innovation. "At least EEBS is easier to pronounce than Ebitda," said Jack Ciesielski, editor of The Analyst's Accounting Observer.

Other corporate executives were admiring. "Dang! Why didn't I think of that?" asked Tim "Tubby" Fujimoto, CEO of TechnaCyber competitor Trailersoft. "It sure would have come in handy when those tornadoes hit last October."

Tolliver said the inspiration for EEBS came after a faulty water-filtering system installed in all 119 of TechnaCyber's trailer parks resulted in the poisoning deaths of 54,352 residents and guests in January.

"Not only were we suddenly exposed to massive liability judgments, but we didn't have any revenues because all our tenants were dead," Tolliver recalled. "So when Beezer [TechnaCyber CFO Willem Van Goetinchem] and I were down at our annual executive retreat in the Seychelles last month, he said to me, 'You know, Skippy, if all this bad stuff hadn't happened, we would be having a pretty good quarter.' And I said, 'Beezer, you're a genius!' "

In the past TechnaCyber had asked analysts to value it on the basis of, in succession: operating earnings; earnings before interest, taxes, depreciation, and amortization (Ebitda); net asset value (NAV); and trailer occupancy rate (TOR). "That's all over now," Tolliver said. "I think we've found something we can stick with."

--Justin Fox