Value Microcaps Motherboard

[hweb2]

Art, re LMIA

I like this one, but because they are now paying taxes...it's not as cheap on a P/E basis as some others here.

On the CC, they said Q4 pre-tax earnings would have been .15/share without some 1-time items. And they were expecting similar results in Q1.

Guided for Q1 revenues of $23-$24M vs. $22.5M in Q4, and Q1 gross margins at the low end of the 21-24% range vs. 20% in Q4. So Q1 sounds like it will be a little better than Q4...and Q1 should be the low point of 2005 based on their annual guidance.

The huge increase in backlog from $53.9M to $94.1M should provide some steady, positive results for the next few quarters. If you crunch the numbers on the 2005 guidance, you get revenue growth of 14-22% and fully-taxed earnings of .35-.68/share vs. untaxed earnings of .19/share (before restructuring charges) in 2004. With the sector fundamentals improving, I think they could exceed even the high end of their forecast.

Should have a favorable Q1 comp in a couple weeks. If they post Q1 fully-taxed earnings of .10/share vs. a loss on 25-30% revenue growth...and give a bullish outlook on the rest of 2005...I think the stock could pop to $6.