Social Detention, Inc. (OTC Pink: SODE) is all about the business of building infrastructure. And why not. To borrow a quote from Willie Sutton, “that’s where the money is.” Over the course of the past few years, Social Detention founder Robert Legg has put together infrastructure projects worth over $15 million. That is just the beginning and a small drop in an enormous bucket when you consider who is spending the big dollars.
Back in 2009, the Obama administration’s economic stimulus package included $830 billion spent on infrastructure covering 2009-2019. Not to be outdone, the current administration has proposed up to $1 trillion over the next decade on building roads, bridges, ports, schools and hospitals.
Just to keep things in proper perspective, we’re not talking about a bunch of people living off the government dole. There is a long overdue and crying need to rebuild the crumbling interstate highway system that dates back to the Eisenhower administration more that 60 years ago.
But there is more to Social Detention than just government building projects. In September 2016 the company acquired total interest in RL Consulting. This provides a basis of operations in the security infrastructure and related business activities. In everyday language, this gives Social Detention including a toehold in the emerging world of legal cannabis.
Big Plans Ahead
Thus far the firm specializes in high margin niche projects. Examples include projects like correctional facilities such as the Merced and El Dorado California Juvenile Halls. And then there is the Long Beach Courthouse and multiple projects working with the California Transportation Authority.
Much of the company’s success so far has focused on California, the largest state for infrastructure spending. Nevertheless, SODE operates on a nationwide basis, currently procuring projects with government funding in place. This places company growth on a clear path as government funds increase under the new infrastructure bill.
Building Their Own Infrastructure
To support growing demand SODE intends to build its current network of small providers into a far larger network. This will help provide synergistic support to the other parties, by means of production capabilities, financing and other relationships. This will result in the bigger benefit of shared contracts.
The goal in the next year is to acquire four smaller entities that are generating between $8 million in revenue a year today, and to be able to secure over $15 million in contracts for each in the coming twelve months.
History Of Growth And Profitability
In just the short period since Social Detention has been in operations in its present Colorado incorporation, it has shown the ability to operate in a revenue and cash flow positive manner.
For the year ended December 31, 2017, revenues tripled to $680,000 while net earnings followed a similar pace reaching $237,500. Cash flow increased by a net of $42,000. In the operating history of small companies, this performance stands out.
Where To From Here
SODE management is building advanced network and infrastructure projects, which represent a key asset for growth and profitability moving forward. A good example was the commitment in July to build an SODE Blockchain for the construction industry. This ends the need for a person to sign off and release payments, takes finance teams out of the process thereby accelerating payment times. This marks an important step in maximizing earnings and cash flow potential.
SODE is ready to handle a far larger payload of high-margin projects. The internal budgets that have been shared with Wall Street analysts and investors project revenues growing from $12 million to $100 million over the next three years and for operating income to rise from $3 million to reach $20 million over the same period.
Robert Legg: A Key Force
Social Detention President, Mr. Robert Legg, with a long-standing record of success, is a key to the future of SODE. That record includes being identified as “The Fastest Growing Company” by The San Francisco and East Bay Business Times for six consecutive years. This was made possible through revenue growth of 350% while achieving and maintaining a high level of profitability.
In other words, Robert Legg knows how to build companies and has been successfully engaged in this pursuit for more than 20 years.
He has long standing connections related to infrastructure projects and intends to leverage these to build a network of small providers into a collective workforce that will be able to be awarded multi-million dollar contracts as a sole source provider. He has been successful in winning contracts from $1-$5 million for its partners and intends to build on those successes with its acquisitions to grow SODE revenues.
Financials Are Also Ready For Accelerated Growth
Most young promising companies can easily become burdened by debt that put limits on their growth potential: not Social Detention. Sifting through this years 10Qs is enlightening.
At mid-year, there was $835k of current assets against just $480k of current liabilities. With no long-term debt burden, shareholder equity totals $343k. That is quite admirable for any fast growing company. And how fast is that? Second quarter revenues were reported at $1.1 million compared with the March quarter report showing $413k. Adding net income from both quarters yields a total of $299k. This means the company is providing investors with impressive returns.
To get all the information on Social Detention just go to www.sodetention.com where you will get all the facts on the company including a complete list of all financial and regulatory filings. It is easy to keep up with SODE news on twitter.com/socdetention.
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