Value Microcaps Motherboard

[whyme2005]

EXXA $1.65 Reports 4c/share Income. Huge Chrysler contract this week.

Late yesterday (5/12/2005), EXXA reported net income of $456K or 4c/share for 1Q 2005 on $37.5M in revenues. This compares favorably with the loss of $1.1M or 8c/share in 4Q2004.

With the significant DaimlerChrysler contract Announced this week, the remaining quarters of 2005 will likely be a significant improvement both in revenues and net income. Here is the link for the DaimlerChrysler announcement:


http://biz.yahoo.com/prnews/050509/dam061.html?.v=4

The DaimlerChrysler announcement says that it will represent about 20% of the annual revenues of about $140M. This is about $28M/year in revenues! This amount however will not be cummulative but it will replace the business lost from American Axle. EXXA announced several months ago that its then largest customer, American Axle, decided that it was going to gradually fase out its manufacturing from EXXA to its own facilities.

It should be noted that American Axle said that it will pull out its business from EXXA starting in the 3rd quarter of 2005 and continuing thoughout 2006. Since EXXA will start manufacturing DaimlerChrysler products starting in the current 2Q 2005 and building up to full production capability by 4Q 2005, the overlap will likely cause revenues and net income to be much higher than current levels for several quarters to come.

Furthermore, the DaimlerChrysler contract in itself validates EXXA (Newcor Division) as a significant player in the automotivele-part machining industry. That in turn could open up similar business opportunities in the future for EXXA.


Here is a portion of the DaimlerChrysler announcement:

DaimlerChrysler Awards Significant New Powertrain Business to a Newcor Subsidiary
Monday May 9, 5:35 pm ET


LAS VEGAS, May 9 /PRNewswire-FirstCall/ -- EXX INC (Amex: EXX-A; EXX-B) today reported that one of the subsidiaries of Newcor, Inc. (a 99% owned subsidiary of EXX INC) has received purchase orders from DaimlerChrysler Corporation (DCX) to machine axles for two current powertrain programs. The anticipated sales would approximate a 20% increase over EXX's current sales and profitability on an annual basis. Production under the contracts is planned to begin shortly and build up to full production levels in the fourth quarter of 2005.



EXXA BY THE NUMBERS:


* LOW FLOAT = 4.7 MILLION SHARES
* 2004 REVENUES = $143 MILLION
* 2004 NET INCOME = $1.5 MILLION
* O/S SHARES = 11.3 MILLION
* MARKET CAP = $15 MILLION
* HEAVY INSIDER BUYING. INSIDERS OWN 54% OF COMPANY (Yahoo numbers are wrong...read the filings)

To buy EXXA shares you need to enter EXX/A in your equity order form. You might just want to tell you broker to buy the shares for you....it cots a few more penies but it is certainly worth it. I did just that as a matter fact.

Once investors realize the significance of the recent company events and the numbers for 2Q 2005 are announced in three more months, EXXA should be trading well above $5/share.


ABOUT EXX Inc.

Newcor Inc., one of EXXA's largest subsidiaries operates seven companies employing over 1,000 people in virtually all areas of design, engineering, and manufacturing of a variety of products, principally for the automotive, heavy-duty, agricultural and industrial markets.

Newcor focuses in two areas: precision machined components and molded rubber and plastic products. Newcor reports its businesses under two product segments: Precision Machined Products and Rubber and Plastic Products. Newcor also operates the Bay City Division, which designs and builds state-of-art welding and forming equipment.