CITY OF INDUSTRY, Calif., May 31 /PRNewswire-FirstCall/ -- Veltex Corporation, (OTC: VLXC) a vertical manufacturing, import and distribution company for apparel and accessories, announced today that it had signed a Letter of Intent to acquire the promotional products division of a 30 plus year manufacturing company. The company manufactures and distributes high quality promotional products and also markets a significant line of established, brand name items. Veltex is a leading supplier to the Promotional Products Industry and is well positioned to gain further market share from the over 4,000 distributors of promotional products in Canada, which represents over a $1 billion marketing industry. Veltex's worldwide headquarters are located in City of Industry, California. URL: http://www.veltexcorp.com/ or http://www.veltexapparel.com/ Javeed Matin, CEO of Veltex Corporation, stated, "We anticipate to consummate this acquisition in the near future for cash and very little stock, so potential dilution will be minimal. Furthermore, we expect that this company would contribute approximately $7,000,000 more to our 2005 revenues and about $1,000,000 to our bottom line, as well as accelerate overall international growth, expansion, and profitability. We look forward to another year of strong performance and record profitability." Previously, Veltex had projected 2005 revenues of around $55 million with net earnings of about $11 million or $1.38 per share. Finn Walstad, CEO of OTCGrowth.com, commented, "I remain firmly convinced that VLXC, now trading around $1.25, has significant appreciation potential based on its strong revenue growth and profitability forecasts. This well managed company is currently trading at a Price/Earnings multiple of only about one times 2005's projected net earnings per share. The shares obviously appear extremely undervalued and I would expect a rapid expansion of the PE, perhaps to at least 10 or higher, as the investment community discovers this hidden gem."
Veltex Corporation is a vertical manufacturing, import and distribution company composed of three divisions: Veltex Apparel, specializing in caps, apparel and apparel accessories for the Promotional Products Industry and distribution of merchandise; Velvet Textile Mills, specializing in the manufacture of high quality fabrics including velvets, 100% cotton twill, denim, sheeting for consumer and industrial products; and KCA Garment Industries, specializing in the manufacture of garments.
Safe Harbor: Except for historical information contained herein, the statements in this Press Release are forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve known and unknown risks and uncertainties, which may cause the Company's actual results in future periods to differ materially from forecasted results. These risks and uncertainties include, among other things, volatility of market prices, product demand, market competition, risks inherent in the Company's international operations, and the Company's ability to replace and expand.
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