Cyalume Technologies Holdings Inc. (fka CYLU)

[ProActive Capital]

Great article on Cyalume: Cyalume Technologies: An Innovative Light Company that Deserves a Spotlight

All too often in the small and mid-cap markets, “less-than-deserving” companies are surrounded by a frenzy of investors speculating about the potential of a company. On other occasions, solid companies go relatively unnoticed by the investment community for no apparent reason. Cyalume Technologies (OTCBB:CYLU), the world leader in chemiluminescent (chemical-light) technology, is one of the under-recognized gems in the small cap space. The Company provides innovative chemical-light products to the U.S. and NATO country militaries as well as to the safety industry including policemen and firemen. Given the Company’s recent progress in advancing its core light technology and incorporating it into new products, it deserves a spotlight to examine where the Company is today and can be in the future. For this however, we will just take a quick look at one of Cyalume’s new products, but understand that the Company’s core-military and ammunition businesses are well-established.

The New Fiocchi Chemical Tracer

Cyalume recently announced a strategic agreement with Fiocchi Ammunition USA, a world leader in the field of small-caliber ammunition to develop and market the Chemical Tracer, the world's first non-pyrotechnic shotgun tracer. The Chemical Tracer creates a daytime visible trace that travels with the cloud of the shot allowing shooters to instantly determine their accuracy and therefore correct their aim. This product is evolving quickly and has the potential to, excuse the pun, take off like a bullet from a gun. It was recently the focus of an article on www.shotgunworld.com with a video displaying the technology that can be viewed at http://www.shootingsportsretailer-digital.com/shootingsportsretailer/201101#pg5. The article included some scintillating comments about the likelihood of taking target shooting to the mainstream public as a spectator sport, much like ESPN did with bass fishing when it transformed the sport into the billion-dollar industry that it is today. Perhaps it is not too early to speculate that Cyalume will be on the cutting edge of transforming skeet, trap and sporting clay shooting into a major spectator sport?

The Chemical Tracer represents a significant incremental growth opportunity for Cyalume as the community of sport as well as military and law enforcement shooters worldwide numbers in the millions. In fact, according to a National Shooting Sports Foundation survey, in 2009 over 8 million Americans participated in sporting clay shooting. Although specific data on how many individual shotgun shells were fired by these users is hard to come by, various estimates have put the figure at over 800 million. Capturing only a small percentage of that market will provide Cyalume with a robust revenue stream. Cyalume's decision to partner with Fiocchi to develop and bring to market this new tracer round ensures the optimal exposure and therefore success of this new innovative product.

As we mentioned, the Fiocchi Chemical Tracer highlighted here represents just one of the many innovative products that Cyalume currently manufacturers. With a market cap still under $100 million and exciting new products such as the Fiocchi Chemical Tracer coming to market, Cyalume is certainly deserving of its moment in the spotlight.