Legal Research Center
Symbol: LRCI - OTC
Price $2.00
52 week high $3.00
52 week low $ .59
Shares Out 3.48 Mil
Float 1.5 Mil
EPS (TTM) $ .28
P/E (TTM) 7.1
Fiscal year: December
Contact: Mr. Christopher Ljungkull, CEO
Phone: 800-776-9377
lrci.com
The following writeup is a modified (updated) version of an analysis
originally prepared by Gary Grobbel and Dr. Christopher Forte posted on SelectMicros.com. Both individuals are active and respected members of the SI community.
Minneapolis-based Legal Research Center provides outsourced custom research
and writing services to attorneys in corporate and private practice.
According to the company, LRC offers work products that include
multijurisdictional surveys, office memoranda and formal court-ready
documents such as trial and appellate briefs, prepared by a staff of highly credentialed attorneys carefully selected for their research, analytical, writing and client-service skills.
LRC's research attorneys are honors graduates who have practiced law for at least two years, and many for more than 20, in major law firms and corporate law departments throughout the United States.
Another skill LRC seems to have honed is the ability to generate earnings.For fiscal year-end December 31, 1999, revenues jumped 83% to $4.4 million,compared with $2.4 million last year. EPS shot ahead 13 times to .28 vs. .02, enough to make the judge, jury, and defendants sit up and take notice.What we'd like to point out is a couple of important factors...first, the revenues and earnings are advancing at a very rapid pace, and yet the stock seems to be relatively unknown. The market for outsourcing legal research
and writing is exhibiting strong growth with no end in sight. The company is in the right place at the right time. We think the stellar quarterly numbers bear this out...
REVENUE 1998 1999
1st Qtr MAR 446 820
2nd Qtr JUN 448 1,108
3rd Qtr SEP 685 1,214
4th Qtr DEC 824 1,248
EPS
1st Qtr MAR -0.05 0.03
2nd Qtr JUN -0.03 0.10
3rd Qtr SEP 0.04 0.11
4th Qtr DEC 0.06 0.06
Secondly, the margins produced by LRC are very high, approximately 53%. The company takes great pride in offering premium customized work coupled with excellent communication to its clients, and the client list seems to be rapidly expanding. We wouldn't be surprised to see these margins expand higher as their pipeline of work swells.
From the fourth quarter release..."The ultimate validation of LRC's service excellence and customer satisfaction is that our book of business for the coming year, which is locked in with signed contracts, is larger than it has ever been." CEO Ljungkull also announced that LRC will be ramping up its marketing and advertising spending in 2000 in order to take advantage of emerging market opportunities. Moreover, he noted that the company does not
expect these new investments to negatively impact net profit. "Rather, we expect them to help us continue to increase earnings dramatically and thereby increase shareholder value."
In our opinion, it's only a matter of time before the street catches on to the company's potential. For approximately $2 a share, investors get eps of .28 for the year 1999, expanding revenues, a high margin business with only minor competition, and stellar growth prospects. We think sooner or later the jury will return with a positive verdict for LRC.
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