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Hickok’s ‘Going Concern’ Qualification Has Been Removed

Cleveland-based Hickok Inc. has closed a deal with a current shareholder and a new investor that management believes will provide the liquidity the company needs to more aggressively pursue a growth strategy. “That deal, along with other arrangements, also had the benefit of our independent auditors removing the ‘going concern qualification’ in our audited financial statements,” explained President and CEO Robert Bauman.

As you may recall, Hickok’s audited financial statements for the fiscal year ended Sept. 30, 2010, included a going concern qualification from its independent registered accounting firm. The company had suffered recurring losses from operations during the previous several years due primarily to decreasing sales of existing product lines and a general economic downturn in all markets the company serves. The resulting lower sales levels had reduced the company’s accounts receivable and cash balances. It was argued that, if this situation continued, it might prevent Hickok from generating sufficient cash flow to sustain its operations.

For the fourth quarter ended Sept. 30, 2011, Hickok saw its net loss fall from $527,184 to $14,923. For the full year, the loss narrowed from $949,496 to $672,535 on a year-over-year basis.

“We are moving in the right direction. Although not yet a profit, our fourth-quarter results showed a dramatic improvement over the past several quarters and years,” Bauman said. “Our actions to reduce costs to match annual revenues have paid off, and we are looking forward to a positive bottom line in the near future.” He added: “Our markets are still soft, but the strategy we have been executing is gaining momentum and we expect significant improvement in 2012 results.”