To view an interactive investor packet for this company go to:
virtualir.com
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Pen Interconnect, Inc (NASDAQ: PENC) is a total interconnection solution
provider offering custom cable and harness interconnections, mobile
satellite equipment, manufacturing and custom design of power supplies
and battery chargers for original equipment manufacturers.
The Company is comprised of four separate business units, each
specializing in interconnection products for the electronic industry:
* Pen Technology, which is engaged in custom cable manufacturing and
other specialty items.
* InCirT Tech Technology, which is a full service contract
manufacturing company with the capacity to produce products through
various stages of production, from prototype through finished goods.
* PowerStream Technology, which is engaged in power supply/battery
charger design and manufacturing.
* Mobile Interconnect, which is engaged in mobile satellite receiving
systems.
Each division ISO 9002, CSA, and UL certified, along with being in
compliance with FDA GMP manufacturing requirements.
PENC has really evolved as a niche player, in each of their areas of
expertise, allowing them to act more like a consumer monopoly in a
consumer commodity industry. Their engineering staff has repeatedly been
able to develop and manufacture 'value added', or customized products,
that meet a client's specific needs, at a turn-around rate that is far
below industry standards and with profit margins that are normally
higher than common, mass produced, items.
The Company has an extensive list of clientele, which include, but are
not limited to, IBM, Unisys, Motorola, Rockwell, US Robotics (now 3COM),
TDK, Compaq, L3 Communications (formerly Lockheed Martin) and Sun
Microsystems. They maintain customer acceptance quality levels of
greater than 99% and have been recipients of a number of Corporate
Supplier Excellence Awards.
Fundamentally, Pen is stronger now than it has been in a few years.
They have implemented some necessary downsizing programs, which have cut
staff and discarded some unprofitable divisions. The Company has been
able to obtain some much needed funding, which helped with some debt
refinancing and cash infusions and also aided them in cleaning up
their books.
The Company recently announced that its fiscal year 1998 first quarter
results were 45% better than originally forecasted by management and
that its revenues grew to over $3,900,000 from a weak fiscal year 1997
fourth quarter. Net sales of $3,904,717 were reported for the first
quarter of fiscal year 1998 as compared to $5,258,386 for the first
quarter of fiscal year 1997. The sales decrease was partially due to the
sale of its San Jose Division in the first quarter of 1997, which had
contributed over $7 million in revenues in the preceding year.
The Company had a loss for the quarter of $34,166 as compared to
earnings of $62, 285 for the same quarter in 1997. The loss per share
for the first quarter of 1998 was less than $0.01 as compared to
earnings of $0.02 in the same quarter in 1997. The loss for the quarter
was less than expected and was a significant improvement over the fourth
quarter of 1997.
Management is very optimistic about the prospects for the fiscal year
1998 as it enters the year with the new term loans, new revolving line
of credit, new contracts in hand and a focus on higher margin products
from the engineered products division. The Company is enhancing its high
volume off-shore manufacturing capability for all of its various
products and divisions as it shifts its focus in the USA to handling
prototyping and low to medium volume manufacturing quantities.
In addition the Moto-Sat division has been working diligently on its
new, soon to be announced, full in-motion satellite positioning system.
This, along with the reduced cost and selling price of the standard
system, should expand the market size significantly and make Moto-Sat a
growing and profitable division.
PENC is also strengthening its sales force through the use of sales reps
and direct sales support from the factory locations, and special focus
will be made in the Engineered Products area to rapidly expand to higher
margin products. There will also be more emphasis placed on the
intelligent cable area as that is a high growth segment of the cable
business.
PENC last traded at: 2 5/8 (It was mentioned earlier this week at 2
7/16) |
