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EKCS...Electronic Control Security, Inc. Receives $850,000 in Orders for the Department of Defense, Nuclear Power Stations & Department
Electronic Ctl Sec I (OTCBB:EKCS)
Intraday Stock Chart
Today : Thursday 6 January 2011
Electronic Control Security, Inc. (OTCBB: EKCS) (ECSI), a global leader in perimeter security systems, today announced that it received purchase orders for Department of Defense (DoD), nuclear power station and Department of Energy (DoE) projects to secure highly strategic sites in North America.
Arthur Barchenko, President and CEO of ECSI, said, "ECSI will supply its premiere product lines designed to prevent unauthorized entry or access to large facilities. ECSI's Entry Control and Perimeter Detection Systems are designed to integrate legacy, GFE and new technologies and will be deployed to protect these classified sites. These are the 38th, 39th, and 40th government and nuclear power station purchase orders we have been awarded in recent months, and it clearly demonstrates ECSI's ongoing relationship with the DoD, NRC & DoE security technology upgrade programs. ECSI is recognized as a quality provider in addressing high-threat security projects."
Further, "ECSI has supplied technology for more than 40 DoD, NRC and DoE sites in the continental U.S., Alaska, Hawaii, the Middle East and Southeast Asia. These three purchase orders are valued in excess of $850,000 and will be delivered by April 2011."
About ECSI
ECSI is a global leader in perimeter security and a quality provider to the Department of Defense, Department of Energy, nuclear power stations, and other large commercial-industrial complexes. The Company designs, manufactures and markets physical electronic security systems for high profile, high threat environments utilizing risk assessment and analysis to determine and address the security needs of its customers. Teaming agreements with major system integrators enable ECSI to support the installation and aftermarket of its products in the U.S. and overseas. ECSI is located at 790 Bloomfield Avenue, Bldg. C-1, Clifton, NJ 07012. Tel: 973-574-8555; Fax: 973-574-8562. For more information on ECSI and its customers, please visit http://www.ecsiinternational.com.
ECSI INTERNATIONAL, INC. SAFE HARBOR STATEMENT: This press release contains forward-looking statements that involve substantial uncertainties and risks. These forward-looking statements are based upon our current expectations, estimates and projections about our business and our industry and reflect our beliefs and assumptions based upon information available to us at the date of this release. We caution readers that forward-looking statements are predictions based on our current expectations about future events. These forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties and assumptions that are difficult to predict. Our actual results, performance or achievements could differ materially from those expressed or implied by the forward-looking statements as a result of a number of factors, including but not limited to changes in economic conditions generally and in our industry specifically, changes in security technology, legislative or regulatory changes that affect us, the availability of working capital, timing of purchase orders, acceptance of company proposals, changes in costs and the availability of goods and services, the introduction of competing products, changes in our operating strategy or development plans, our ability to attract and retain qualified personnel, changes in our acquisition and capital expenditure plans, sufficiency of cash reserves and the risks and uncertainties discussed under the heading "RISK FACTORS" in Item 1 of our Annual Report on Form 10-K for the fiscal year ended June 30, 2010 and in our other filings with the Securities and Exchange Commission. We undertake no obligation to revise or update any forward-looking statement for any reason.
For contact:
Natalie Schneider
973-574-8555
Thanks White Tiger....hog
You might be interested in my new GeoPowerRanking analysis.. (GPR)
http://blog.geoinvesting.com/?page_id=50
Maj
LRAD..LRAD Corporation Reports Record Revenues and Profitable Results for Fiscal Year 2010
Posted 12/01/2010 04:30 PM ET
Featured Stocks
LRAD L R A D Corporation * Top-Rated Company SAN DIEGO, CA, Dec 01, 2010 (MARKETWIRE via COMTEX) -- LRAD Corporation (LRAD), the global leader in acoustic hailing devices (AHDs), today reported record revenues of $16.7 million for the fiscal year ended September 30, 2010. The reported record revenues did not include $607,000 in fiscal year 2010 HSS(R) product sales that are accounted for in the Company's Annual Report on Form 10-K (filed today) as discontinued operations due to the September 27, 2010 spinoff of the HSS technology business to Parametric Sound Corporation.
In addition to record fiscal year revenues, accomplishments in fiscal 2010 included:
-- Achieved profitability for the first time in the Company's history.
-- Recorded a fourth consecutive fiscal year of record LRAD(R) systems
and services revenues.
-- Achieved record Company revenues for the third straight fiscal year
and achieved positive cash flow from operations.
-- Awarded a $6.6 million contract from the U.S. Navy for the Shipboard
Protection System ("SPS") Block 2 in a competitive bid. This award is
in addition to the $5.0 million contract the Company won in fiscal
2007 for the SPS Block 0, against which the Company is still receiving
orders.
-- Awarded a $17.6 million LRAD systems and services contract, of which
$12.1 million in LRAD systems is scheduled for delivery to a military
service of a foreign government before March 31, 2011.
-- Introduced two enhancements to the Company's product line, the LRAD
300Xi(TM) and LRAD 1000Xi(TM). These systems have fully integrated
electronics and offer end users a flexible option to the remotely
controlled LRAD 300X(TM) and LRAD 1000X(TM).
-- Managed the balance sheet and controlled expenses while investing in
new product development and markets.
"We accomplished many of our goals for fiscal 2010 including changing our corporate identity, spinning off the HSS technology business, growing our LRAD business at a double digit rate and positioning the Company for significant new domestic and foreign military sales," said Tom Brown, president and CEO of LRAD Corporation.
Revenues from continuing operations for fiscal year 2010 increased 10% to $16.7 million, compared to $15.2 million for fiscal year 2009.
Gross profit for fiscal 2010 was $9.2 million or 55% of revenues, compared to $7.4 million, or 49% of revenues for fiscal 2009. The gross profit margin was favorably affected by increased LRAD system shipments and reduced product costs.
Operating expenses for fiscal 2010 decreased 13% to $6.7 million, compared to $7.7 million in fiscal 2009. The decrease was primarily due to a $607,000 reduction in non-cash share-based compensation costs, a $355,000 decrease in commission expense due to lower commissionable sales, and an $85,000 reduction in professional services, offset by a $65,000 increase in product development expense.
http://www.investors.com/NewsAndAnalysis/Newsfeed/Article/122935677/201012011630/lrad-corporation-reports-record-revenues-and-profitable-results-forfiscal-year-2010.aspx
CELM...Third Quarter 2010 Financial Highlights
Total revenue increased by 48.9% year-over-year to $32.9 million.
Gross profit increased by 44.9% year-over-year to $9.4 million.
Operating income, including the stock-based compensation expense, was $4.2 million, a 3.8% year-over-year increase.
Non-GAAP operating income, which excludes a stock-based compensation expense of $2.4 million, was $6.7 million.
Net income, including the stock-based compensation expense of $2.4 million, was $2.7 million, a 15.6% year-over-year decrease.
Non-GAAP net income, which excludes a stock-based compensation expense of $2.4 million, was $5.1 million, a 61.0% increase.
Basic and diluted earnings per share were $0.13 each, based on 20,908,863 and 20,947,303 weighted average shares outstanding, respectively.
Non-GAAP basic and diluted earnings per share, which excludes a stock-based compensation expense of $2.4 million, were $0.25 each, based on 20,908,863 and 20,947,303 weighted average shares outstanding, respectively. In the third quarter of 2009, basic and diluted earnings per share were $0.25 and $0.24, respectively, based on 12,926,571 and 13,553,465 weighted average shares outstanding, respectively.
Mr. Yue Wang, Chief Executive Officer of China Electric, said, "During the quarter, we granted 1.2 million China Electric shares to key employees, and we believe that this grant will help us to build loyalty among our high-quality employee base, and to assist in our recruiting efforts. This grant resulted in an approximately $2.4 million stock-based compensation expense for the quarter. We are pleased to have exceeded our revenue guidance for the quarter, as we continued our initiative to focus on sales of our higher-priced products. Our average selling price in the quarter increased by 12.6% over the third quarter of 2009. Our focus on higher-margin sales in China and to OEMs was again successful; however, the positive margin implications of these sales on our net income were partially offset by the $2.4 million non-cash stock-based compensation expense. Without this non-cash expense, we would have exceeded our net income and earnings per share guidance for the quarter."
He continued, "We believe that our investments to increase our manufacturing capacity and modernize our factory equipment in a phased manner will play a major role in the successful execution of our strategy to broaden and deepen our market penetration. During the quarter, we made solid headway on our capacity expansion plans. We completed the installation of two new coreless motor and two new AC motor production lines and we now are offering a new product series for consumer electronics and toys to the market. We have received positive and encouraging feedback thus far on our new products. Our new factory in Zhejiang, equipped with two AC motor production lines, was fully up and running in September and two more AC motor lines were added in October. Production of the two new lines will begin in late November.
"As we approach the end of the year, we are tightening our revenue guidance range for 2010, and have updated our net income guidance to include stock-based compensation expenses related to our employee share grant. We continue to believe that market demand for our products is sustainable, and we are implementing our strategy to leverage this demand and build our leadership position in the market," Mr. Wang concluded.
Business Outlook
The Company believes that strong gross domestic product growth in China and recovering export markets, combined with rising disposable income and the Chinese government's stimulus package relating to subsidies for home and kitchen appliances and vehicle purchases will continue to support increased demand for micro motor products. The Company's goal is to become a global leader in the development and manufacture of micro motor products. R&D investments are focused on products that address industry trends to reduce noise, vibration and energy consumption. China Electric continues its initiatives to increase higher-margin direct sales to domestic OEMs as a proportion of total revenue and has devoted resources to increase brand awareness and product recognition and heighten customer loyalty.
Guidance for Fourth Quarter and Fiscal Year 2010
Fourth quarter of 2010
Revenue in the range of $38.0 million to $39.5 million.
Net income in the range of $5.4 million to $5.6 million, including a non-cash stock-based compensation expense of $0.4 millionfor the fourth quarter of 2010.
Basic and diluted earnings per share are expected to be between$0.24 and $0.25, based on 21,942,243 shares outstanding on a fully diluted basis.
Fiscal year 2010
Revenue to be in the range of $117 million to $119 million
Net income for fiscal 2010 to be in the range of $14.9 million and $15.3 million, including the non-cash stock-based compensation expense of $28.7 million for 2010 full year.
Basic and diluted earnings per share for 2010 will be between $0.74 and $0.75, based on 20,467,329 shares outstanding on a fully diluted basis.
http://geoinvesting.com/companies/celm_china_electric_motor/research
YUII...
Global Hunter Securities Reiterates Buy Rating on Yuhe International (YUII)
By Michael J. Zerinskas
Benzinga Staff Writer
January 04, 2011 14:52 PMSymbols: YUII
Tags: Global Hunter Securities
Posted in: Analyst ColorPrice TargetAnalyst Ratings
Share 0diggsdigg
Email ArticlePrint ArticleGlobal Hunter Securities is out with a research report this afternoon, where it reiterates its Buy rating on Yuhe International (NASDAQ: YUII); it has a $16.00 price target on the stock.
The GHS analysts cited the company's recent announcement of the acquisition of 10 new parent breeder farms, adding 950K parent breeder sets on top of its existing 2.2MM.
The analysts view this $16MM cash and stock investment as a highly accretive use of cash, after which the company will be left with ~$30MM in net cash or roughly $1.50 per share.
The added that, given the current valuation, with shares trading at 5x and 3x FY 2011 and 2012 respective earnings, excluding net cash, we view this as one of the most attractive US listed Chinese investment opportunities.”
Read more: http://www.benzinga.com/analyst-ratings/analyst-color/11/01/751416/global-hunter-securities-reiterates-buy-rating-on-yuhe-in#ixzz1AEkrACah
http://www.benzinga.com/analyst-ratings/analyst-color/11/01/751416/global-hunter-securities-reiterates-buy-rating-on-yuhe-in
YUII...added today..Net Income guidance for 2010 raised from 17 million to 18.5 million...this was prior to the 10 breeder farm new acquisition...earnings growth of 45%...
http://geoinvesting.com/companies/yuii_yuhe_intl/financials?qm_page=28397
http://www.nasdaq.com/earnings/analyst_summary.asp?symbol=YUII&selected=YUII
Quarterly EPS...half way down first page....hog
http://markets.on.nytimes.com/research/modules/company_topic/company_topic.asp?symbol=CHRI
Press Release: China Health Resource, Inc. Launches Expansion Plans Due to Increased Demand for Dahurian Angelica Root in China
January 3rd, 2011 • Related • Filed Under • by ACN Staff
http://www.americanconsumernews.com/2011/01/china-health-resource-inc-launches-expansion-plans-due-to-increased-demand-for-dahurian-angelica-root-in-china.html
CHRI hits .06....hog
CHRI hits .06....hog
CHRI...nice close...0.042....another 35% increase
CHRI...keeps moving...good numbers reported recently ...http://finance.yahoo.com/q/is?s=chri.ob
...believe more to come...hog
WKBT a very volitile stock with excellant growth & a small float is seeking to meet listing requirements.
So far they have added 4 independant directors & increased the float from around 800,000 to 3,259,188.
One part of the puzzle is that the main shareholder who controls a vast majority of shares outstanding resigned as a director when the Independant directors were named without any mention of what he is likely to do with his shares.
Hi Rick,
I see you own sclx and from the posting around 50 cents share. Now that it is around $.80/share should I wait for a pull back or is it still fairly prices to purchase?
Ron
CHGI manufactures high purity graphite from coal. According to a March 4th S&P report, the company has over 50 customers in 22 provinces in China and the company's strategy includes efforts to double capacity from 15,000 tons to 30,000 tons annually and to develop nuclear graphite capabilities and capacity for new nuclear power plants. The stock trades at around $1.90 despite having book value of around $2.50. That’s worth repeating: this stock trades at a 25% discount to book value ! It is also trading at a multiple of only around 2.5x operating cash flow (about the same as where SCLX was before it skyrocketed up). The company has already given guidance for 2009 that indicated that both revenues and net income would increase 15-25% vs. last year. If so, that means that, based on reported market cap, CHGI is trading at only around 4x 2009 earnings, despite 15-25% growth. If management can continue growth at this rate for 2010, then we are looking at only 3x 2010 earnings.
Ordinarily, if a company is trading at 75% of book value and only 2x cash flow there is a strong risk of it being “too good to be true.” However, there are a few other things that give me comfort. First, the company just raised nearly $3 million in a private placement in December which would (hopefully!) indicate that institutional investors (including Silver Rock, Jayhawk Capital and Taylor A.M.) have recently done their due diligence. Second, the company recently appointed BDO as their independent auditor. BDO is a world class international auditor with extensive China experience and I have worked with their affiliates before. Finally, in October the company announced that it had a majority of independent directors, including the audit committee, which is chaired by Yizhao Zhang, who also happens to be CFO of Universal Travel Group (UTA). In short, I trust the numbers.
In terms of uplist potential, CHGI is more obvious than most. In October 2009 CHGI put out an 8K which contained the following language:
“With the election of Mr. Chen and Mr. Zhang, the Company now has a majority of independent directors. Effective October 28, 2009, the Company created audit, compensation and corporate governance/nominating committees and adopted a code of conduct.”
This language is verbatim what is required for an uplisting to NASDAQ or AMEX and the only reason to pursue this course is to prepare for an uplisting. Also in October 2009 and right around the time of appointing the directors, CHGI upgraded their auditor to BDO. Orient Paper (ONP) also upgraded to BDO right before their uplisting in 2009 and released a nearly identical 8K.
As far as I can see, the only thing holding CHGI back from an uplisting is the share price, which needs to be above $3.00 for the AMEX and above $5.00 for the NASDAQ. Ordinarily I would recommend that a company in this situation reverse split its stock to achieve the uplisting, however in CHGI’s case I wouldn’t take this route. First, a reverse split would exacerbate already low liquidity. Second, and more importantly, the stock currently trades at such a huge discount to its fair value that it will likely find its way to the $3.00 to $5.00 range without any reverse split necessary. Assuming this stock trades on the NASDAQ and earns $6.0 million in 2010, a PE multiple of 15 would result in a share price of around $6.00 which is a 3 bagger vs. the current price of $1.90. I’m not suggesting that the stock should gap to $6.00 all at once, however based on the discount to its fair value I think that a 50-100% gain in the short term would not be unwarranted and with very little downside risk vs. the fundamentals.
Disclosure: The author holds long positions in SCLX.OB and CHGI.OB
About the author: Rick Pearson
http://seekingalpha.com/article/192573-predicting-china-s-next-skyrocket-stock
CHGI...doubled this week...hog
ESIC...EasyLink Selected by Leading Global Asset Management Company to Provide EDI Data Transfer Platform
Tuesday 03/09/2010 3:40 AM ET - Businesswire
Related Companies
Symbol Last %Chg
ESIC 2.09 0.00%
SLFPF 3.00 0.00%
As of 2:01 PM ET 3/8/10
EasyLink Services International Corporation ("EasyLink" or "Company") (NasdaqCM: ESIC, www.easylink.com), a global provider of comprehensive messaging services and e-commerce solutions, today announced Standard Life, a leading asset management company operating across the globe, has implemented EasyLink's FTS (File Transfer System) Enterprise Gateway solution to manage its high volume EDI transactions.
Standard Life experienced significant year on year growth of EDI data that could no longer be supported by their existing legacy systems in addition to the high cost specialist skills needed to support it. HMRC (Her Majesty's Revenue and Customs) end of financial year submissions/approval process, in the United Kingdom, presented the sense of urgency required to implement a solution capable of delivering high volumes of EDI transactions in significantly short data transmission times.
Standard Life's Colin Lakats, Technical Solutions Designer, stated, "EasyLink's quick and effective implementation of the EasyLink FTS Enterprise Gateway provided substantial cost savings in hardware/software licensing and application support for Standard Life. In addition, the new platform supported expansion of Standard Life's IFA (Independent Financial Advisors) network, providing HMRC compliance, with minimal support effort."
About Standard Life
Standard Life is a major asset managing company headquartered in Edinburgh and operating across the globe. Established in 1825, Standard Life provides life assurance and pensions, investment management, banking and healthcare insurance products to over 6.5 million customers worldwide. The Group has around 10,000 employees across the UK, Canada, Ireland, Germany, Austria, India, USA, Hong Kong and mainland China. At the end of June 2009 the Group had total assets under administration of GBP 156.5bn.
About EasyLink Services International Corporation
EasyLink Services International Corporation (EasyLink) (NasdaqCM: ESIC), headquartered in Norcross, GA, offers a comprehensive portfolio of "any to any" business messaging and transaction services that can bridge the most challenging technology gaps while creating significant cost efficiencies across an organization. From Desktop Fax and Production Messaging to EDI, Managed File Transfer, Document Capture and Management, and Telex we help companies drive costs out of their operations. With over two decades of servicing customers around the globe, EasyLink has established a proven track record for providing effective, reliable and secure communications. For more information on EasyLink, visit www.easylink.com.
Forward-Looking and Cautionary Statements
Except for the historical information and discussion contained herein, statements contained in this release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements involve a number of risks, uncertainties and other factors that could cause actual results to differ materially from those indicated by such forward-looking statements. These and other risk factors are set forth under the caption "Risk Factors" in the Company's Annual Report on Form 10-K, the Company's quarterly reports on Form 10-Q and the Company's other filings with the U.S. Securities and Exchange Commission. These filings are available on a website maintained by the Securities and Exchange Commission at www.sec.gov. The Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein as a result of new information, future events or otherwise.
SOURCE: EasyLink Services International Corporation
EasyLink Services International Corporation
Pamela Bernardino, 732-652-3733
pbernardino@easyli
CHGI...rockin...able to sell again...hog
CHGI...NEW YORK, March 3, 2010 (GLOBE NEWSWIRE) -- China Carbon Graphite Group, Inc. ("China Carbon" or the "Company") (OTCBB:CHGI - News), one of China's leading non-state-owned producers and wholesale suppliers of fine grain and high purity graphite, announced today that it has entered into a Letter of Intent to acquire 100% of assets of Chiyu Carbon Graphite Ltd. ("Chiyu"), a down stream producer of graphite products in China.
Based in Xingtai City in Heibei Province, Chiyu mainly manufactures graphite molds for EDM, drilling tools, and metal Smelting. It also manufactures a variety of graphite crucibles, bearings, sealing rings and graphite anodes for lithium batteries. The products are widely used in machining, metallurgy, construction, chemical, military, and aerospace industry.
China Carbon has agreed to pay no more than 3 times the historical average earnings of 2008 and 2009 of Chiyu for the acquisition. The terms are subject to negotiation and execution of binding definitive documents after all parties complete the due diligence process. China Carbon will hire BDO Guangdong Dahua Delu CPAs, a member firm of the BDO International network to perform the due diligence.
After the completion of the transaction, Chiyu plans to move to a new facility in Yangfan Hi-tech Industrial Park located in Xingtai City. The transaction is contingent upon obtaining free land use in the Industrial Park, as well as preferential policies from the local government.
About China Carbon Graphite Group, Inc.
China Carbon Graphite Group, through its affiliate, Xingyong Carbon Co., Ltd., manufactures carbon and graphite based products in China. The Company is the largest wholesale supplier of fine grain and high purity graphite in China and is one of the nation's top overall producers of carbon and graphite products. Fine grain graphite is widely used in smelting for colored metals and rare-earth metal smelting as well as the manufacture of molds. High purity graphite is used in metallurgy, mechanical industry, aviation, electronic, atomic energy, chemical industry, food industry and a variety of other fields. In September 2007, the Company was approved and designated by China's Ministry of Science & Technology as a "National Hi-tech Enterprise." Of the 400 plus carbon graphite producers in China, China Carbon is the only non-state-owned company which has received this honor. For more information, visit http://www.chinacarboninc.com. Any information on the Company's website or any other website does not constitute a part of this press release.
AMCG continues...hog
SMED...Sharps Compliance Corp. Reports 374% Revenue Growth in Second Quarter Fiscal 2010
Buzz up! 0 Print
Companies:Sharps Compliance Corp. Related Quotes
Symbol Price Change
SMED 7.49 0.00
{"s" : "smed","k" : "c10,l10,p20,t10","o" : "","j" : ""} Press Release Source: Sharps Compliance Corp. On Thursday February 4, 2010, 6:55 am EST
Second quarter revenue expands 374% to record $16.0 million while gross and operating margin remain strong at 66.7% and 52.8%, respectively
Second quarter diluted earnings per share were $0.38, up $0.27 over the prior year quarter
Strong, flexible balance sheet with a cash balance of $21.5 million, working capital of $23.9 million and no debt at December 31, 2009
HOUSTON, Feb. 4, 2010 (GLOBE NEWSWIRE) -- Sharps Compliance Corp. (Nasdaq:SMED - News) ("Sharps" or the "Company"), a leading full-service provider of cost-effective disposal solutions for medical waste and unused dispensed medications generated outside the hospital and large healthcare facility setting, today reported financial results for the second quarter of fiscal year 2010 ended December 31, 2009.
Revenue in the second quarter of fiscal 2010 was $16.0 million, an increase of 374.4%, or $12.6 million, when compared with revenue of $3.4 million in the corresponding period of the prior fiscal year. The increase in revenue was driven by $11.5 million in sales related to the Company's $40 million, 5-year contract with an agency of the U.S. Government and quarterly sales of $1.4 million to retail clinics and pharmacies to address the flu shot season and additional inoculations for the H1N1 virus. This growth more than offset lower sales to the pharmaceutical industry resulting from the variability in timing of Patient Support Programs. For the six-month period ended December 31, 2009, revenue increased 310.6%, or $23.7 million, to $31.4 million compared with the first six months of fiscal 2009.
Net income was $5.6 million in the second quarter of fiscal 2010, up 254% compared with $1.6 million in the second quarter of fiscal 2009. Growth in sales and measurably expanded margins drove the significant increase in net income. On a per diluted share basis, earnings in the fiscal 2010 second quarter were $0.38, a 245% increase over $0.11 in the prior year period. The fiscal 2010 quarter per share calculation included approximately 1.0 million, or 8%, additional weighted average shares. The prior year's second quarter net income was positively impacted by a $1.8 million, or $0.13 per diluted share, income tax benefit. Net income was $11.4 million, or $0.78 per diluted share, for the six months ended December 31, 2009 compared with net income of $2.2 million, or $0.16 per diluted share, in the corresponding period of prior fiscal year.
Dr. Burton J. Kunik, Chairman and Chief Executive Officer of Sharps Compliance, commented, "Our second quarter benefited from an exceptionally strong flu shot season driven by additional H1N1 vaccinations and the completion of the product build-out phase of our first major U.S. government contract. We continued to realize the full impact of the leverage demonstrated in our business with the recognition of solid gross and operating margins. The Company's core business, excluding the government market, expanded at a healthy 27% over the prior year second quarter as our customer penetration with major pharmacies and retail clinics enabled us to grow with their success with vaccination services for the regular flu shot season and the H1N1 virus. In addition to pharmaceutical and retail markets, we are focused on driving recurring revenue growth through our government sector to the many government agencies that are now able to order through our GSA contract and Distribution and Pricing Agreement."
Government Contract and Strong Flu Shot Season drove quarterly and year-to-date growth
Customer billings, which the Company believes is an appropriate measure of performance and progress of the business, increased 385.2% to $15.7 million in the second quarter of fiscal 2010 compared with $3.2 million in the same period of the prior fiscal year. The significant increase in second quarter 2010 billings was the result of $11.5 million in billings for providing the Sharps® Medical Waste Management System™ to an agency of the U.S. Government combined with an increase of $1.0 million in retail market billings, which were driven by the flu shot season. Customer billings in the government market also included $142,000 related to the support of the City of Chicago immunization program and $77,000 related to the sale of the RxTakeAway as part of the State of Iowa funded program.
In the first half of fiscal 2010, retail billings increased 129.0% to $3.0 million. Year-to-date total customer billings were $31.3 million in fiscal 2010 and $7.9 million in fiscal 2009, an increase of 296.3%. (See reconciliation of Customer Billings to Revenue in the supplemental table included at the end of this release.)
In the first quarter of fiscal 2010, Sharps implemented a targeted marketing strategy to the professional market, which is comprised of physicians, dentists, veterinarians and medical practices. The new approach contributed to the growth in billings of 19.8%, or $62 thousand over last fiscal year's second quarter, to $0.4 million. While still minor relative to other markets served, the Company believes that it can continue to grow its presence in this area and win market share through its solution offering that reduces professional offices' medical waste disposal cost by fifty percent (50%) or more. Billings to the pharmaceutical industry were lower due to the variability in timing associated with the Patient Support Programs the Company provides to the drug manufacturers.
David P. Tusa, Executive Vice President and Chief Financial Officer, noted, "Over the past few months we have refined our sales approach and our target market strategy which has accelerated purchasing activity from targeted prospects. We continue to confirm the value of our Sharps Disposal by Mail System to this market with savings of 50%, or more, when compared with the traditional pick-up service. As a result of the success to date, we recently added additional staff to our outbound calling operations. We also introduced our new Sharps Advantage Program whereby professional offices may sign up for one of three levels of service: Silver, Gold or Platinum. Each level earns varying discounts and additional services and is associated with planned purchase volume."
Second Quarter and Year-to-Date Fiscal 2010 Operating Performance
Gross margin was 66.7% in the second quarter of fiscal 2010, a significant increase over gross margin of 38.2% in the fiscal 2009 second quarter. For the fiscal 2010 year-to-date period, gross margin was 68.7% compared to 41.1% in the same period the prior fiscal year. Driving the increase for both the quarter and six-month period was the substantial operating leverage inherent in the business. Sharps invested heavily in its infrastructure in the prior fiscal year to accommodate for the growth it is now realizing and has sufficient capacity to expand much further without major additional capital investment.
Selling, general and administrative (SG&A) expense was $2.1 million for the second quarter of fiscal 2010, an increase of $667 thousand, or 46.4% over the $1.4 million reported in the same period of the prior year period. For the six months ended December 31, 2009, SG&A expense was $3.9 million compared with $2.6 million for the corresponding period of the prior year, an increase of $1.3 million, or 50.7%. The increase in the SG&A for both the second quarter and fiscal year-to-date periods was a result of increased payroll-related expense (increase in year-over-year headcount of eight of which six are focused on sales and marketing-related activities), non-cash stock-based compensation expense ($188 thousand for the quarter and $350 thousand for the year-to-date period) and higher sales and marketing related expenses including professional fees.
The Company expects SG&A expense for fiscal 2010 will be approximately $8.0 million to $8.2 million, although it may flex higher for targeted sales and marketing activities.
Operating income for the second quarter of fiscal 2010 was $8.4 million, or 52.8% of revenue, compared with an operating loss of $233 thousand, for the prior year's second quarter. Operating income for the six months ended December 31, 2009 was $17.4 million, or 55.5% of revenue, a significant increase compared with operating income of $377 thousand, or 4.9% of revenue, in the same period the prior fiscal year period.
David P. Tusa, Executive Vice President and Chief Financial Officer, commented, "Our operating margin expansion is a direct reflection of the strength of our business model and the value we provide through our medical waste solutions. At this level of revenue we expect that we can sustain operating margins above 50%. While we manage the levels of the Company's SG&A, we do plan to continue to invest in our sales infrastructure and marketing activities as we prove out what we believe are billion dollar market opportunities in medical waste and unused medication disposal solutions outside the hospital and large healthcare setting."
Liquidity and Balance Sheet Strength
In the second quarter of fiscal 2010, the Company successfully completed a public offering of 577,146 shares, of which 77,146 were sold to cover the over-allotment option, at a price of $9.165 per share (net of underwriting commission). The net proceeds of $4.8 million from the shares sold by the Company (net of offering expenses) will be used for general corporate purposes, including expansion of our product offerings, facilities and infrastructure to meet the continued expected growth of the Company.
Cash and cash equivalents were $21.5 million at December 31, 2009 compared with $4.8 million at June 30, 2009. The significant increase in cash and cash equivalents was driven by cash generated from operations for the six months ended December 31, 2009 of $11.1 million plus the net proceeds from the public offering of $4.8 million and proceeds from stock option exercises of $828 thousand, less capital expenditures of $763 thousand. Working capital was $23.9 million at December 31, 2009, an increase of $19.3 million over the June 30, 2009 level of $4.6 million. At December 31, 2009, stockholders' equity and total assets were $27.9 million and $32.0 million, respectively, up from $9.6 million and $15.2 million, respectively, at June 30, 2009.
Although Sharps maintains a $2.5 million line of credit with JPMorgan Chase (the "Bank"), no amounts were outstanding at December 31, 2009. The line of credit is available to finance working capital as well as organic expansion opportunities or potential acquisitions.
U.S. Government contract and streamlined product procurement lead to pilot program with the Department of Veterans Affairs
The $40 million U.S. Government contract awarded in February 2009 included the $28.5 million product build-out phase, which was completed in the second quarter, as well as four additional option years for program maintenance. Sharps has been awarded the first option year valued at approximately $1.6 million that is expected to be realized from February 1, 2010 through January 31, 2011. The remaining three option years are expected to be approximately $3 million per year.
In December 2009, Sharps Compliance was awarded a five-year Federal Supply schedule contract by the General Services Administration of the U.S. Government (GSA). The GSA Schedule provides a streamlined vehicle for federal government agencies to purchase the Company's products and services. Sharps was also awarded a Distribution and Pricing Agreement (DAPA) with the Defense Supply Center of Philadelphia's Directorate of Medical Material which provides the automated tools to promote efficient procurement of medical products for the Department of Defense.
Following the procurement announcement, Sharps and the United States Department of Veterans Affairs ("VA") launched a pilot program to provide the Company's medical waste and unused medication disposal solutions for American veterans in a four state region bounded by Maryland, portions of Virginia, West Virginia, and Pennsylvania, as well as the District of Columbia.
"With the product build-out phase of our first major contract now successfully completed and streamlined vehicles for federal government agencies to purchase all of our products and services in place, we believe other agencies within the government can more readily commit to using our products and solutions," stated Mr. Tusa.
Pharmaceutical manufacturer Patient Support Program ideally positioned to comply with recent California legislation
California Senate Bill 486 was signed into law on October 12, 2009 and requires pharmaceutical manufacturers who sell or distribute medications that are routinely injected at home to submit plans to the California Integrated Waste Management Board (the "Board") on or before July 1, 2010 describing how they support and provide safe syringe and needle collection and disposal programs for their patients. We believe Sharps is in a unique position to facilitate the manufacturers' efforts with its proven Patient Support Program that helps to ensure patient compliance while providing the patients a convenient means of disposing of their sharps. The Company currently has six successful patient support programs in place and is actively marketing its customizable solution to pharmaceutical manufacturers.
Mr. Tusa noted, "Our current pipeline of opportunities in the pharmaceutical manufacturer market encompasses at least 15 manufacturers representing, we believe, revenue potential in excess of $25 million per year in Patient Support Programs. We are currently in active discussion with at least eight of these organizations and believe we are well positioned to close a number of these deals in the second half of fiscal year 2010.”
Outlook
Dr. Kunik concluded, "Looking forward, we believe that there could be some additional residual benefit from the flu shot season in our third fiscal quarter ending March 31, 2010 which would positively impact our retail market billings. We also plan to generate a growing base of recurring revenue in our core markets through building sales to the pharmaceutical manufacturers and professional markets. We believe we have a number of opportunities with our existing U.S. Government agency customer for the expansion of the existing program as well as the potential sale of additional disposal solutions. In addition, we expect our GSA Schedule, DAPA and pilot program with the Veterans Administration can help drive our effort to generate recurring revenue within the government market as well. Although timing is always difficult to predict with large government contract market opportunities, we believe the long-term outlook to be quite strong."
Second Quarter Fiscal Year 2010 Webcast and Conference Call
The Company will host a teleconference today beginning at 10:00 a.m. Eastern Time. During the teleconference, Dr. Burton J. Kunik, Chairman and Chief Executive Officer, and David P. Tusa, Executive Vice President and Chief Financial Officer, will review the financial and operating results for the quarter ended December 31, 2009 and discuss Sharps' corporate strategy and outlook. A question-and-answer session will follow.
The Sharps conference call may be accessed the following ways:
The live webcast may be found at http://www.sharpsinc.com. Participants should go to the website 10 - 15 minutes prior to the scheduled conference in order to register and download any necessary audio software. Webcast listeners will have the opportunity to submit questions to the speakers. Select questions will be summarized and addressed during the question-and-answer portion of the call.
The teleconference can be accessed by dialing (201) 689-8560 and requesting conference ID number 342590, approximately 5 - 10 minutes prior to the call.
To listen to the archived call:
The archived webcast will be at http://www.sharpsinc.com. A transcript will also be posted once available.
A replay may also be heard by calling (201) 612-7415, and entering account number 3055 and conference ID number 342590.
The telephonic replay will be available from 1:00 p.m. Eastern Time the day of the teleconference until 11:59 p.m. Eastern Time Thursday, February 11, 2010.
About Sharps Compliance Corp.
Headquartered in Houston, Texas, Sharps is a leading full-service provider of cost-effective disposal solutions for medical waste and unused dispensed medications generated outside the hospital and large healthcare facility setting. The Company's flagship product, the Sharps Disposal by Mail System®, is a cost-effective and easy-to-use solution to dispose of medical waste such as hypodermic needles, lancets and any other medical device or objects used to puncture or lacerate the skin (referred to as "sharps").
The Sharps®MWMS™, a Medical Waste Management System, is a comprehensive medical waste and dispensed unused medication solution which includes an array of services and products necessary to effectively collect, store and dispose of medical waste and dispensed unused medications outside of the hospital setting. The System, which is designed for rapid deployment, features the Sharps Disposal By Mail System® products combined with warehousing, inventory management, training, data and other services necessary to provide a comprehensive solution. The Sharps®MWMS™ is designed to be an integral part of governmental and commercial emergency preparedness programs.
Sharps' vendor managed inventory program includes the direct fulfillment of the Sharps Disposal By Mail System® to the pharmaceutical manufacturers' self-injecting patient support program participants, who use the product as a convenient means of disposing of used syringes, educational information on the disposal process and distinctive branding for the manufacturer's product. The Company's SharpsTracer™ system tracks the return of the Sharps Disposal By Mail System® by the patient to the treatment facility, where the package is processed prior to destruction utilizing the Company's proprietary and customizable system. This data is electronically transmitted and available to the pharmaceutical manufacturer via the Company's proprietary data warehouse which aids in monitoring drug usage and establishes a touch point for individual patient follow-up.
The Company's newest offering, RxTakeAway™, is designed for individual consumers, retail or mail-order pharmacies, communities and facilities including assisted living, long-term care and correction operations to facilitate the proper disposal of unused dispensed medications. This solution consists of a variety of sizes of containers (from a special-use envelope to 10- and 20-gallon products) and return packaging with pre-paid postage to the Company's treatment facility. The Company recently introduced its proprietary tracking system, DrugTracer™, to document unused patient medication products. The RxTakeAway™ is also an additional component option for the Sharps® Medical Waste Management System™.
The Company focuses on targeted growth markets such as federal, state and local governments, the pharmaceutical industry, as well as home health care, retail and professional markets. Sharps is a leading proponent and participant in the development of public awareness and solutions for the safe disposal of needles, syringes and other sharps as well as unused pharmaceuticals in the community setting.
As a fully integrated medical waste management company providing customer solutions and services, the Company's solid business model, with strong margins and significant operating leverage, and early penetration into emerging markets, uniquely positions it for strong future growth.
More information on the Company can be found on its website at: www.sharpsinc.com
CHRI added today...more to come...been good since 1-1-10..hog
SMED...bought back after selling awhile back...7.26...hog
AMCG....added today...hog
FTER...continues to rock...hog
CMCA...added..merger uplist potential..hog
Posted by: ASIAN DREAMS Date: Sunday, January 24, 2010 6:14:42 AM
In reply to: None Post # of 1945
FTER some serious DD for starters.
Friday January 22nd close .065 ]
Resistance .09 then .52 cents Under Heavy ACCUMULATION
Chart link
http://stockcharts.com/c-sc/sc?s=FTER&p=D&b=5&g=0&i=p28776773442&r=785
AS: 250 Million
OS: 13,513,264 as of Sept 30, 2009
Float: 4-5 Million as of Sept 30, 2009
Recent news.
435% increase in Net Income from Fiscal 2008 to Fiscal 2009
from January 22nd, 2010
http://finance.yahoo.com/news/Forterus-Announces-Fiscal-prnews-200024715.html?x=0&.v=1A
A Better Tomorrow Treatment Center, a behavioral healthcare subsidiary of Forterus Inc. (Pink Sheets: FTER), was featured on"Intervention" on the Arts & Entertainment Network
Youtube preview link
financials ~~~>
http://www.pinksheets.com/otciq/ajax/showFinancialReportById.pdf?id=28177
Quote:
--------------------------------------------------------------------------------
Key Financial Highlights
$383,937 in Net Income for Fiscal 2009 compared to a loss of $1,671,525 in Fiscal 2008
$5,842,182 in Revenue For Fiscal 2009 compared to revenue of $4,089,139 in Fiscal 2008
435% increase in Net Income from Fiscal 2008 to Fiscal 2009
43% increase in Revenue from Fiscal 2008 to Fiscal 2009
$0.43 Revenue Per Share (on share count of 13,513,264)
$0.03 Earnings Per Share (on share count of 13,513,264)
--------------------------------------------------------------------------------
http://finance.yahoo.com/news/Forterus-Announces-Fiscal-prnews-200024715.html?x=0&.v=1
Forterus Announces Fiscal Year 2009 Financial Results
MURRIETA, Calif., Jan. 22 /PRNewswire-FirstCall/ -- On January 22, 2010, Forterus, Inc. (Pink Sheets: FTER) announced its results of its 2009 Fiscal Year.
Paul Howarth, Forterus's CEO, stated, "This has been a transformational year for Forterus and we are pleased with the Company's achievements. Even more so, we believe we have a strong foundation from which to grow our business and capitalize on future prospects and we remain focused in our determination to build shareholder value. While the struggling economy has impacted our business, we have continued to build upon our insurance contracts. We were delighted to have achieved positive net income of $383,937 and earnings per share of $.03 for the fiscal year 2009. Looking forward through 2010, if we continue to execute our key strategic initiatives and continue to adhere to the disciplines of our core business model, we should continue to see a steady increase in our core business. Furthermore, we will continue to make strategic investments in qualified and experienced staff, the major asset of any quality organization, to complement the investments to grow our bed count as we continue on a sustainable, scalable and profitable growth path in fiscal 2010."
Key Financial Highlights
$383,937 in Net Income for Fiscal 2009 compared to a loss of $1,671,525 in Fiscal 2008.
$5,842,182 in Revenue For Fiscal 2009 compared to revenue of $4,089,139 in Fiscal 2008.
435% increase in Net Income from Fiscal 2008 to Fiscal 2009.
43% increase in Revenue from Fiscal 2008 to Fiscal 2009.
$0.43 Revenue Per Share (on share count of 13,513,264).
$0.03 Earnings Per Share (on share count of 13,513,264).
The company reported a consolidated net profit of 383,937 or $.03 per share and revenue of $5,842.182, or $0.43 per share, for the 2009 fiscal year.
Business Overview
For fiscal year 2009, the Company reported revenues of $5,842,182 from its continuing operations (healthcare services business), compared to revenues from continuing operations of $4,989,139 during the comparable period in 2008.
The Company has received numerous requests for comparable public companies in our industry. The Company has provided the shareholders with Hythiam, Inc. as a comparable. Hythiam is traded on NASDAQ. Hythiam reported a net loss of $10,714,000 for the nine months ending September 30, 2009 on $1,346,000 in revenue for the same time period.
"When looking at Hythiam's market capitalization of $28,358,896 as of January 15, 2010 and their performance against Forterus's, we are excited about the possible increase in our matrices, including shareholder equity," stated CEO Paul Howarth. "We did not actively seek out or receive any financing through the issuance of our common stock in 2009. However, we may begin to explore such possibilities based on Hythiam's $7,000,000 capital raise in 2009. However, Forterus's Board feels the current market price and price throughout 2009 does not warrant the Company raising money through the issuance of its stock at this time."
About Forterus, Inc.
Forterus Inc. and its subsidiaries engage in diverse business activities, including drug and alcohol rehabilitation, and finance. For more information about Forterus and A Better Tomorrow, please visit their respective websites at http://www.forterushealthcare.com and http://www.abttc.com.
CHRI...added
RODM...Added today @ 4.58
EXPU....has become my largest holding...hog
CHGI...China Carbon Graphite: Research by Debra Fiakas
in Industrial Mechanical (submitted 2009-11-04)
July 1, 2009, 10:14AM The GeoTeam® coded China Carbon Graphite (chinacarboninc.com) as a GeoSpecial. At its current price the stock may offer an attractive risk reward opportunity.
In 2007 the China Carbon saw its earnings per share grow 30.7% with a 47.2% increase in sales. 2008 saw a continuation of growth as sales and adjusted net income grew 7.7% and 11.1% respectively. 2008 growth would have been greater if it had not been for the Olympics which necessitated the closure of Xingyong's plant facilities as mandated by the Chinese government for the August 2008 Olympics. The closure caused the Company to shut down its production. The Company requires a 6 months production cycle and therefore was unable to resume production until March of 2009." With operations back to normal the company is positioning itself to propel its growth rate to new heights.
China Carbon is one of the China's top three producers of specialty graphite products. The Company's main products are graphite electrodes, fine grain graphite and high purity graphite. In general, the mineral is a valuable commodity in the Chemical, Mechanical, Nuclear and Electrical industries because of its ability to conduct heat and electricity and for its refractory nature (chemical and physical stability over a wide range of temperatures). These industries often need durable materials that can withstand conditions and processes over a long period of time, characteristics that lack in other industrial materials.
Graphite is considered to be one of the purest forms of carbon and highest grade of coal. Purity refers to the percent of carbon versus other non-carbon impurities found in the mineral. Graphite is one of two allotropes of carbon (the other being diamonds), the term allotrope meaning that it is a naturally occurring form of pure carbon. The chart below illustrates different grades of coal as they compare to carbon's allotropes.
Mineral Constituents by % Weight Name *Volatiles % C Carbon % H Hydrogen % O Oxygen % S Sulfur % Braunkohle (Lignite Coal) 45-65 60-75 6.0-5.8 34-17 0.5-3 Flammkohle (Flame coal) 40-45 75-82 6.0-5.8 >9.8 ~1 Gasflammkohle (Gas flame coal) 35-40 82-85 5.8-5.6 9.8-7.3 ~1 Gaskohle (Gas coal) 28-35 85-87.5 5.6-5.0 7.3-4.5 ~1 Fettkohle (Fat coal) 19-28 87.5-89.5 5.0-4.5 4.5-3.2 ~1 Esskohle (Forge coal) 14-19 89.5-90.5 4.5-4.0 3.2-2.8 ~1 Magerkohle (Non baking coal) 10-14 90.5-91.5 4.0-3.75 2.8-3.5 ~1 Anthrazit (Anthracite Coal) 7-12 >91.5 <3.75 <2.5 ~1 Graphite 7 >99 <1 <1 <1 Diamond 0 100 0 0 0 Source: Wikipedia
There are three types of naturally occurring graphite; high crystalline graphite, amorphous graphite and flake graphite, all of which are named for observations that can be made about how they appear in their natural environments. However, graphite can also be artificially processed to obtain a synthetic form of the mineral.
Amorphous graphite has applications in metallurgy, pencil production, refractories, coating, lubricants and paint production.
Crystalline graphite can be used in batteries, lubricants, grinding wheels and powder metallurgy.
Flake graphite is used predominantly in refractory applications, mainly in secondary steel making; in addition to this it may also be used in lubricants, powder metallurgy, pencils and coatings. Most sources of natural graphite are also used in the fabrication of graphite foil. Synthetic, or artificially prepared, graphites are used in aerospace applications, batteries, carbon brushes, graphite electrodes for furnaces and metallurgical processing, and moderator rods in nuclear power plants. China Carbon specializes in "using carbon rich raw materials to manufacturing graphite with a high degree of purity. The raw materials, purchased from domestic Chinese suppliers, include materials such as coal asphalt, asphalt coke, metallurgy coke, needle coke, metallurgy coke powder, quartzose sand, coal, petroleum coke and calcined coke. The extraction process typically requires a large amount of heat and several iterations of critical extraction steps before the desired purity is obtained.
Understanding China Carbon Graphite:
China Carbon Graphite manufactures three types of synthetic graphite products. Each type of product can generally be broken down into different quality grades that determine its use.
Its products are generally used:
* As a component in other products, * As an element of the machinery in a facility * To produce nuclear energy * In the manufacturing process of other products.
The company typically focuses on high end applications within its varying product lines.
1. Graphite electrodes line: Conducting material used for electric arc furnaces in the manufacture of steel and smelting alloy steel, brown alumina, yellow phosphorus, or other metals.
The electric arc furnace operates as a batch melting process producing batches of molten steel. The energy supplied during the smelting process can be either chemical or electrical. Electrical energy is supplied via the graphite electrodes and is usually the largest contributor in smelting operations.
2. Fine Grain graphite: Widely used in smelting for colored metals and rare-earth metal smelting as well as the manufacture of molds. (When liquid metal needs to poured into a container, that container must have a high tolerance for heat. Because graphite has a low sensitivity to heat, it is ideal for making molds in this scenario).
3. High purity graphite is used in metallurgy, mechanical industry, aviation, electronic, atomic energy, chemical industry, food industry and a variety of other fields. Common uses of this product line are the manufacture of molds, parts for machinery, automotive parts, lining in pipes to prevent chemical erosion, cubicles for silicon wafers and nuclear power plant applications. High purity graphite is generally lighter and less sensitive to heat than the aforementioned product lines.
Growth strategy. Going forward the company will follow a three pronged strategy:
1. Continue to serve the higher end markets in its Graphite electrodes line and Fine Grain graphite product lines.
2. Financing: The Company has applied for a $26 million loan financing from the PRC at below market rates. Use of proceeds: immediate acquisition, expansion of current plant and to purchase additional equipment for the manufacture of fine grain and high purity products.
* The company has identified a potential acquisition target, that when purchased, would result in a 100% increase of both revenues and profits. If the transaction occurs it would double the size of the company in terms of revenue and net income.
3. Intensify its penetration into the high purity markets: A major impetus for growth will come from China Carbon's increased focus on its high purity graphite line.
There are numerous reasons to concentrate on the high purity graphite line:
1. Less competition
* The majority of Chinese graphite manufacturing companies are not involved in the production of high purity graphite. * The expertise and high cost of machinery needed to manufacture high purity graphite is very demanding, creating a barrier to entry. * The company has a qualified and seasoned staff. This is important because "the reputation of the manufacturer and the quality of the product may be as important as price."
2. High purity graphite opens the door to a much broader array of markets. This should reduce the company's sensitivity to economic cycles when compared to its other product lines.
3. Margins in the high purity graphite line are significantly better as compared to its other product lines.
4. High purity graphite is becoming the preferred material of choice utilized in the production of nuclear plants. This trend presents an exciting opportunity on which China Carbon is poised to capitalize.
* The projected significant investments in Chinese nuclear power industry provide opportunities for companies that are directly or indirectly involved in the nuclear power industry. * Energy demands and savings, as well as emission reduction requirements pose growing pressures for the fast development of the Chinese economy. Industry experts contend that nuclear power is the most competitive solution to change Chinese energy structures and meet the energy demands. * By the end of 2008 a total of 11 nuclear power generating sets were in operation. The Chinese government is seeking to build 40 nuclear reactors by 2015. * In 2008 the annual nuclear power production was about 68 billion KWh, accounting for 2% of the total power production in China. The Chinese government plans that the installed capacity of nuclear power in China will eventually reach 5%, the electrical power production will reach 8% and the installed capacity of the nuclear power will exceed 70 million KW by 2020. If these estimates materialize, then the investments in Chinese nuclear power construction will total 720 billion Yuan (105 billion USD) in approximately 10 years.
The GeoTeam is speculating that the current stock price of China Carbon has been suffering as a result of the following reasons.
1. A capitalization issue arising from the reverse merger transaction in December 2007 called for the company to have to pay $4 million in fees. The initial payment of $800,000 was due by December 13, 2007 and the remaining $3,200,000 is due by September 13, 2009. Neither payment had been made.
* Problem solved- China Carbon has submitted capitalization reorganization plan to the PRC for approval. "We expect approval for the recapitalization in the next 60 days. These actions will effectively reduce the intercompany investment obligations owed to Yongle from $4,000,000 to $100,000 and eliminate possible fines or penalties by the PRC business bureau.
2. The 2008 Olympics resulted in short term facility shut downs.
* Problem solved- "The sales decrease reflects the closure of Xingyong's plant facilities as mandated by the Chinese government for the Olympics in August 2008. The closure caused the Company to shut down its production. The Company requires a 6 months production cycle and therefore was unable to resume production until March of 2009." With the conclusion of the Olympics operations are back to normal.
3. Dilution due to financing needs for acquisitions and plant expansion.
* Problem solved - "As one of the largest privately owned employers in Inner Mongolia, we have been recommended by the local government of Inner Mongolia to apply for a RMB 180,000,000 loan (approximately $26,000,000 US) through the Central government's economic stimulus plan. Once approved, it will expedite the process of doubling our production capacity to 30,000 metric tons annually and allow us to develop nuclear graphite for the more than 40 nuclear reactors the government is seeking to build by 2015." * Final approval for the loan and funding is expected in the fourth quarter of this year.
4. The six million outstanding warrants makes it difficult to compile an EPS estimate and accurately value the stock. The issue of potential dilution is still open and could put a short term cap on the stock unless:
* The company considers steps to restructure the contract terms of the outstanding warrants, a step the GeoTeam® would highly recommend. To that end, the GeoTeam® has been able to confirm that China Carbon is preparing a repurchase agreement to retire 5 million warrants. * Completes an acquisition that can deliver EPS growth despite dilution. * Adds manufacturing capacity that can deliver EPS growth despite dilution.
5. No investor awareness initiatives.
* Problem solved-
-China Carbon Graphite has retained the services of Ventana Capital Partners. (www.venturecapitalpartners.com) -China Carbon Graphite has retained the services of Capital Group Communications. (www.capitalgc.com) -Research report has been furnished by Crystal Equity Research which should help the company gain additional exposure. (www.crystalequityresearch.com)
The GeoTeam® will follow the CHGI story very closely. The stock may start to react positively when the loan and capital restructuring terms are actually approved. The company has provided guidance implying that it will experience sales and earnings growth in 2009.
"As we look at the remainder of 2009, we expect that China Carbon will achieve a 15% to 25% increase in top line and bottom line in 2009. We are encouraged as the overall economic condition has been steadily improving in China. We are especially encouraged by the strong demand for our high quality fine grain graphite and high purity graphite."
It appears that this guidance does not take into account potential for acquisitions or manufacturing capacity increases, either of which could significantly add to the 2009 out look, a situation possibly needed in the short term for investors to get over dilutive issues.
Book Value Per Share using current outstanding shares: $2.61 Book Value Per Share including outstanding warrants: $1.82
Enterprise Value Per Share using current outstanding shares: $1.15 Enterprise Value Per Share including outstanding warrants: $1.03
The GeoTeam® will publish complete valuation scenarios as events unfold.
Check out this article and more like it on our squidoo account, http://www.squidoo.com/myshareholder
About the Author
Debra Fiakas, CFA is the Managing Director of Crystal Equity Research. Ms. Fiakas has a bachelor degree in economics from the University of South Dakota and an MBA from Thunderbird School of Global Management. Ms. Fiakas is also a member of the New York Society of Security Analysts and the Chartered Financial Analyst Institute.
http://www.goarticles.com/cgi-bin/showa.cgi?C=2157058
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