Category Archives: otcbb

TCCO Reports Results for the First Fiscal Quarter Ended 12/26/09

Technical Communications Corporation Reports Results for the First Fiscal Quarter Ended December 26, 2009

Feb 5, 2010 – CONCORD, Mass.–(BUSINESS WIRE)–Technical Communications Corporation (OTC BB: TCCO.OB – News) today announced its results for the fiscal quarter ended December 26, 2009. For the first quarter of the Company’s 2010 fiscal year, the Company reported net income of $2,356,000, or $1.62 per share, on revenue of $4,764,000, as compared to net income of $206,000, or $0.14 per share, on revenue of $1,844,000 for the quarter ended December 27, 2008. Included in net income for each of the quarters ended December 26, 2009 and December 27, 2008 is $(19,000), or ($0.01) per share, respectively, in stock-based compensation expense.

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Three Things to Like About Technical Communications

From SeekingAlpha.com

I am reluctant to write about Technical Communications Corp. (TCCO.OB), a microcap manufacturer of encrypted communications devices. It took me weeks to even accumulate a small position at the prices I wanted to pay. The stock is damn difficult to buy, at least near the bid.

But it’s worth it. There are three reasons why I think that Technical Communications Corp. is a stock worth owning:

1. Low float could make any move explosive. The float is only 1.35 million shares, and the total share count only 1.45 million. Another plus: unlike many microcaps, this one won’t dilute you into oblivion. The share count barely nudged over the past year.

2. Very low enterprise value-to-sales ratio. TCCO has a market cap of 6.23M and posted sales last year of over 7M. But TCCO.OB also has 3.97M, or $2.73/share, in cash and equivalents. Back that out and the EV/S ratio is only 0.33 (all figures courtesy of Yahoo Finance).

3. Technical Communications made $0.19/share last quarter ($0.17 fully diluted). Even without backing out the cash, that annualizes out to a forward P/E under 7. Back out the cash and the forward P/E drops under 4. Now I’m not sure that TCCO can earn as much over the next 3 quarters as it did the last quarter, but it seems to me there is what Seth Klarman might call a Margin of Safety here.

A few caveats. As mentioned, the stock is very thinly traded. Sales are concentrated — 2 customers account for 78% of revenues. One of the big customers is Uncle Sam. Also, the earnings were boosted in part because tax loss carryforwards allowed the company to dramatically cut its tax liability and avoid paying taxes. There are still over $3 million in carryforwards, so I don’t anticipate a big jump in the tax burden this year. However, if TCCO remains profitable, understand that at some point the carryforwards will be utilized and TCCO will have to pay taxes just like you and me.

(TCCO closed today at $4.04)

Spare Backup, Inc. Sees Second Quarter 2009 Subscriptions at Record Levels Between $1.3 and $1.6 Million

From PRNewswire.com

Company to Hold Conference Call to Discuss 2009 Business Outlook

PALM DESERT, Calif., June 9 /PRNewswire-FirstCall/ — Spare Backup, Inc. (OTC Bulletin Board: SPBU), an industry-leading provider of automated, online backup applications, and cloud services for home users and small businesses, announced today that it sees total subscriptions for the second quarter of 2009 ranging between $1.3 and $1.6 million. We anticipate record revenue for the second quarter of 2009 ranging between $500,000 and $600,000 and unearned revenue from annual subscriptions between $800,000 and $1.1 million. The unearned revenue will be recognized as revenue over the subscription term as per our revenue recognition policy which is based on generally accepted accounting principles.

The improved top line performance was largely attributable to its continued rollout of data backup offerings with its partners. Revenue is expected to benefit slightly from an improving pound (GBP) currency in the quarter versus the U.S. dollar. During first quarter of 2009 we had total subscriptions of approximately $1.1 million. We recognized revenues for the first quarter of 2009 amounting to approximately $456,000 and unearned revenue from annual subscriptions sold during first quarter amounting to approximately $608,000. The total subscriptions in the 2nd quarter are expected to exceed the total amount of revenue recorded for the full year of 2008. Seasonality has historically caused the second half of the year to be stronger than the first half.

Management anticipates the roll out of its current and new RETAIL partnerships, as well as other OEMs, and new product offerings such as Spare Room, Spare Mobile, and Spare Sync will continue to expand revenue in the coming quarters. Management will be hosting a conference call to discuss its business outlook for 2009. The information for that call is as follows:

* Date: July 7, 2009
* Time: to be separately announced
* Dial-in number for US/Canada: to be separately announced
* Dial-In number for international callers: to be separately announced
* Conference ID: to be separately announced

Mr. Cery Perle, CEO of the Spare Backup, Inc., commented, “We continue to achieve positive momentum and are excited by the growth in our subscriptions as well as the progress we are making on numerous business fronts. We will be discussing current business relationships, new product launches, pending transactions, financings and new business relationships. We look forward to further communicating where we see the future of our company as we strive to reach our goal of positive EBITDA in 2009 and profitability in 2010.”

For additional information, visit http://www.sparebackup.com. For investor relations, please contact our investor relations department at 760-779-4241 Ext. 224 or ir@sparebackup.com.

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Zagg Reports Record-Breaking Results for the First Quarter of 2009

From yahoo.com

ZAGG Inc. (OTCBB:ZAGG), a leading producer of mobile electronics accessories including the popular invisibleSHIELD™ and award-winning ZAGGaudio™ brands, announces successful financial results for the first quarter of Fiscal Year 2009, ended March 31, 2009. ZAGG highlighted a record-breaking quarter with revenues of almost $8.1 million dollars, a nearly 184% increase when compared to first quarter 2008. Earnings per share for ZAGG were $0.05 for the first quarter 2009.

“Even during these challenging economic times, ZAGG continues to see unprecedented demand for its products. Much of our success can be attributed to the ability to execute on our business plan. We look forward to rolling out new products and services over the remainder of the year that will continue our rapid growth track for years to come,” said Robert G. Pedersen II, President and CEO of ZAGG.

“We continue to see great results from our strong partnerships with Best Buy and Carphone Warehouse, and plan to continue announcing new partnerships that will contribute to ZAGG’s success,” said Pedersen. “This will be the best year ever for ZAGG, and if economic conditions continue to improve, we are well-poised for even more accelerated growth.”

The Company will host an investor conference call today, Thursday, May 14, 2009 at 11:00 AM EDT, to answer questions regarding the results from our Form 10-Q for the 3 months ended March 31, 2009. To participate in the call please dial (877) 407-9210. Interested parties may also listen via the Internet at the event website and on the Company website at: www.ZAGG.com. The call will be available for replay for 30 days by dialing (877) 660-6853 and entering account number 286 and call ID number 322566.

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9 Top China Plays

By Glen Bradford, GlenBradford.com

The financial crisis has sent the markets plummeting. For those who believe that companies that make more money than other companies should be priced higher than other companies, boy do I have some bargain bin deals for you. In the past 6 months, I’ve hand sorted through over 5000 companies. The steals are all in China.

1) China Architectural Engineering (NASDAQ: CAEI) specializes in high-end curtain wall systems (including glass, stone and metal curtain walls), roofing systems, steel construction systems, eco-energy saving building conservation systems and related products, for public works and commercial real estate projects.

The company just got added to the Halter USX China Index.

Trading at $37.24M with a book value of $78.2M for a company that does specialty construction projects looks like a steal, especially when they made $22.6M in the first 9 quarters of 2008.

They lowered their guidance for Q4/2008 and they are eating some cost overruns. Recent news includes that they were awarded two new contracts for projects valued at $80 million in Dubai and Singapore.

The company also reported that its project backlog has increased to a new record of $245M.

2) China Yongxin Pharmaceuticals (OTC BB: CYXN) has three segments: the wholesale of pharmaceuticals and other medical-related products, the operation of retail drugstores, and the cultivation, processing of ginseng.

Currently trading at $2.19M when they made $4.0M in the first 3 quarters of 2008 and $2.6M in the first 3 quarters of 2007 is absurd. Not to mention that the book value is $12.5M.

Yongxin also just put up a new, more flashy website. The investor message boards were very concerned when their old website went down. I sat by and let the people who don’t understand website development sell out. Same thing happened with New Dragon Asia (NWD) below.

3) New Dragon Asia (OTC BB: NWD) is engaged in the milling, sale and distribution of flour and related products, including instant noodles and soybean-derived products, to retail and wholesale customers throughout China. I find trading at $9.14M with a book value of $74M mildly entertaining. The company made $14.12M in 2008.

In my opinion, investors are shaky because their operating margins got squeezed by the ridiculous expansion in commodity prices. Good news, the whole bubble collapsed. As I see it, this is an opportunity for the company to make some huge numbers in 2009, not to mention that they’ve been religious about growing revenues over the past 5 years with high predictability.

Their website crashed about a month ago and the stock price hit the chopping block, getting cut by more than half. Look for the catalyst at $0.83 of the Halter USX China Index.

4) Gold Horse International (OTC BB: GHII) is principally engaged in three business sectors in China: construction, residential and commercial real estate development, and management and operation of the Inner Mongolia Jin Ma Hotel.

Top line revenue guidance for 2009 is $90M and the company is priced at $2.63M.

In 2008, they made $4.53M on revenues of $66.91M. The book value is about $25M. Gold Horse is located in Hohhot, China; a city that has been growing at 23.5% for the past 7 years.

Gold Horse has contracted to build a wind power manufacturing plant. This company is located in the middle of china, not on the outskirts where the exports have fallen and hurt the economy.

There are two issues that I see. The first is that their cash is low and they are burning through cash to maintain operations. The second is that there are some big shareholders that look to be slowly selling the stock down.

5) Orsus Xelent Technologies (AMEX: ORS) is engaged in the business of designing, manufacturing and distributing cellular phones for retail and wholesale distribution.

What we have here is a company trading at $7.44M that has a book value of $42.4M. In the last 9 months they made $6.34M.

According to their annuals, they are trying to advance along with technology into the 3G markets and are targeting China’s rural population. They grew 16% in 2008 even with the economic crisis slowing them down in the end of the year.

6) Lotus Pharmaceuticals (OTC BB: LTUS) manufactures branded drugs and distributes them along with products produced by third-party manufacturers throughout China. Lotus also just came out with a new website in the last week.

Trading at $8.06M with a book value of $38.3M and making $6.3M in the first 9-months of 2008 makes Lotus extremely attractive. There is downside for the risk-averse. Lotus East has historically funded its capital expenditures from their working capital and has advised us that they believe this capital is sufficient for their current needs.

Lotus East has contractual commitments for approximately $65.5 million related to a Technology Transfer Agreement and the construction of the new manufacturing facility. If Lotus East is not successful in obtaining all of the funding necessary to complete the construction of the new facility, it would lose the approximately $17,219,000 spent to date, including the $17,000,000 for the deposit on the land use rights which is non-refundable.

That said, it’s still trading below book value and has several huge projects in the works setting the stage for huge growth potential.

7) China Sun Group High Tech (OTC BB: CSGH) mainly engages in the production and sales of cobaltosic oxide and lithium cobalt oxide, both anode materials used in lithium ion rechargeable batteries in the People’s Republic of China.

Trading at $12.29M with a book value of $27.45M with a 2008 annual net income of $6.74M, I immediately started digging deeper into the growth potential of this company. Not to mention that every quarter in 2008 trounced the comparable quarter in 2007.

I don’t really mind reading headlines like: Quarterly Revenue Up 42% to $7.6 Million; Net Income Increases 145% to $1.8 Million. You can’t find headlines like those with your average run of the mill blue chip.

8.  Asia Cork (OTC BB: AKRK) is a rapidly growing leader in the development, manufacturing and marketing of cork-based building materials.

Asia Cork is currently valued at $4.64M, even though it has a book value of $17.1M and pulled down $2.54M of profit in the first 3 Quarters of 2008.

In my conversations with flooring experts, Cork seems to be trending back into fashion as a “green” alternative.

Another set of great headlines: Asia Cork Q3 ’08 Revenue Up 117% to $8.96M; Net Income Up 220% to $1.40M.

The issue here is the daily volumes are low and Asia Cork isn’t off it’s 52-week high as much as I’d like it to be.

9) China Kangtai Cactus Bio-Tech (OTC BB:CKGT) is principally engaged in the production, research and development (R&D), sales and marketing of products derived from cacti.

Again, I see a big deal here since the company is trading at $3.93M with a book value of $22.69M and a yearly net income of $2.1M including a -1.09M adjustment in Q1 2008.

The downside is that there are rumors that the market maker, NITE, has a lot of excess shares.

For the three months ended September 30, 2008, revenues increased by $2,229,213 or 56.4% to $6,184,685 from $3,955,472 in the corresponding period of the prior year. The increase in revenues was attributable to the fact that the company is continuing to expand its productions and distribution, and its products are better accepted by the Chinese market customers.

Bottom Line: In an environment like this, where game theory is prevailing, there’s no question in my mind that a lot of these companies are likely to become more attractive in the short term. The long term tradeoffs and value price tradeoffs warrant further investigation. Price is what you pay and value is what you get.

Disclaimer: I own NWD, GHII, CAEI, ORS, and LTUS in my accounts and the accounts I manage. I am working around Ameritrade to acquire exposure to CYXN and AKRK. I also plan on purchasing the other companies mentioned in this article.