StockHouse Press Release
Below are some of the key points from the lead story on StockHouse's main page. We have all done our due diligence on LAN's potential. As well, Targa and Misener have conducted an in depth analysis prior to making a significant commitment and investment in LAN. Both have much more at risk than the $$$'s we have invested and I'm confident their DD has been a lot more extensive than any of ours. Their business relationship with LAN provides them with much greater access to key information than we would ever have. This has given them the confidence to risk their $$$'s, reputation, businesses and careers while strongly endorsing LAN. Having scrutinized the information in the StockHouse article, I am more than ever confident in the true potential of LAN.
Stockhouse Key Points
Steven Misener, a portfolio manager at CI Mutual Fund Management likes Plaintree a great deal. He believes it is in a turnaround mode. "We believe it is going to be a profitable entity and we are quite keen on that."
Comment: Misener has proven success in managing his fund. His access to key information provides him the ability to state he is keen about profitability. Lends credibility to the 'profit' rumours we are hearing.
Targa Group was founded seven years ago and its intention was to be a turnaround vehicle for struggling companies. Since then, they have acquired four different companies in avionics and electronics. Targa has converted all of these companies over a very short period of time into profitable entities. Targa's group of companies presently generates (excluding Plaintree) about $9.5 million in sales with an EBITDA of about $1.5 million
Comment: Targa are turn around specialists and have a proven, successful track record in similar technology companies.
Targa's management scrutinized Plaintree very carefully and came to the conclusion that Plaintree's technology was excellent and was actually so strong as compared to the market that despite the absence of research and development in several months, Plaintree still remained ahead of the competition.
Comment: Targa did their homework. The technology has always been strong, marketing and distribution was the weakness. They have already begun with the ATS deal. Not only did it provide an entry into wireless. It also added a strong customer and distribution base.
Targa has slashed the operating expenses for this quarter from $5 million a quarter last year, to approximately $500,000 per quarter this year. Targa greatly reduced its net loss by recently reporting a net loss of ($25,719) or ($0.02) per share, for the third quarter ended December 31, 1999, as compared to a net loss of ($4,998,128) or ($0.30) per share, for the same period the previous year.
Comment: They have steadily improved the bottom line and with increased sales last quarter and the significant decrease in operating expenses.....HIGHER SALES + LESS EXPENSES = PROFIT!!!!
The complete previous management of Plaintree is gone, the board of directors are gone. It is brand new management made of the Targa management group. All have a lot of experience in identifying niche markets, engineering products to meet those markets, and fiscal responsibilities.
Comment: Baggage is gone and the new team is focused, energetic and motivated. They will be successful.
"We are going to begin attacking specific niche markets where we know Plaintree's product has a very good advantage over the competition." Watson continues, "When you add both companies together, they have approximately 4,000 existing customers so it is a large existing bar distributor and customer base that literally has been left on hold for the last year while both companies were in the midst of restructuring."
Comment: Better distribution, larger customer base, competitive advantage, and strategic target marketing bodes well for increased sales and future profits.
There are a number of potential strategic alliances Plaintree is examining. Watson says, " We have been approached by a number of people and are currently in initial discussions with them. There is nothing material at this point, so I can't announce them. So, yes we are doing some extensive work with some people I believe are going to be very strategic for us."
Comment: LAN is being noticed. More strategic relationships will result in better distribution, exposure and potential sales. As well, each new relationship provides added PR opportunities to sustain momentum. Lends credibility to rumours of expected PR to come on.
In the wireless area, Watson says there is no one that has a viable product on the market right now that can compete with Plaintree in the field of Infrared LED (light emitting diode) wireless transmission. Watson states: "There are a few companies out there that claim to have the actual LED capability, but we have not really run into them in the marketplace ever, they may still be in the initial stages of development."
Comment: High quality product in a hot market sector that has tremendous growth potential. Wireless will continue to grow and only get stronger in the future.
Plaintree has numerous potential contracts in the pipeline and has already signed a contract with the US Navy. "We just finished a contract for a networking product (LAN) with the US Navy and that was a feather in our cap," Watson says, "The US navy took a long look at all the products out there and decided that we were the most reliable and rugged of them all. We completed the first stage of a large contract with them. We shipped $1 million worth of product last quarter and we are expecting more orders coming down the pipes within the next quarter. Plaintree has several other companies that they are getting involved with, but there is no significant information that can be released at this time."
Comment: Navy lends credibility to technology. Existing customer references are a key component in being able to sell to new customers. Hint at Q4 revenue results which lends credibility to profit rumour. Many have commented on potential of other sales to the Navy. This lends credibility of more PR's to come on more Navy deals as well as other that will be used to sustain momentum.
What will set Plaintree apart from the competition is their product line and advanced technology. Watson says: "I would suggest they take a good look at the wireless market and the amount of competition in the RF area and then take a look at the infrared LED area and the types of speed we are able to generate and look at the market potential, which is absolutely incredible. If you look at the fact that we are combining a networking company with a wireless company to give a complete solution to our customers, there are very few networking firms out there that can offer that, so there are a number of areas that will set us apart from the competition."
Comment: Quality products, niche market in a hot wireless sector. Being able to offer both wireline and wireless products provides a competitive advantage. I have often been involved in sales where a single source solution receives favourable consideration. As well, existing wireline customers can lead to wireless sales and vice versa.
When asked about significant announcements that investors can expect to see this quarter, Watson replied: "There are a couple announcements that we hope to make within this quarter that people will find interesting." Most of the alliances that they are looking at are with US companies. "So, yes there will definitely be US alliances which will occur."
Comment: Hint of PR to come lends credibility to rumours we have been hearing. US alliances will mean greater exposure in the US which leads to more US institutional coverage and investors. This will add to momentum as well |
