ETPI: Profitable, Reporting OTC-BB stock with BIG News Coming!
I know this message is long, but I want to fill you in on the solid background of the company before I spill out the good news, which I believe will be released on Monday, since the company typically tries to avoid Friday releases.
I have been following ETPI (Entertainment Technologies and Programming) since the beginning of the year. They are profitable (1st 3 qtrs of 1997 were profitable, 4th quarter was not because they took some markdowns to assets to get books prepared for Amex listing (based on recommendations from auditors)). 1st quarter of 1998 was profitable (marginably). They are a reporting company on Edgar, a rarity for a BB company.
I have done extensive due-diligence on the company. Here's a brief summary (as of 1st qtr 10Q).
ENTERTAINMENT TECHNOLOGIES & PROGRAMS
16055 SPACE CENTER BLVD., SUITE 230
HOUSTON, TX 77062
PHONE (281) 486-6115 * FAX (281) 486-6155
OTC-BB: ETPI
Point of Contact: Dan Telles or Pete Cahill, Investor Relations 281-486-6061
Shares Outstanding, Common _24,942,321
Float _5,402,205
Long-Term Debt _$ 1,203,572
Total Assets _$5,386,087
Insider Ownership _68%
Shareholder Equity/Share _$.22
Market Capitalization _$18,706,657
52 week High-Low _$1.18/$.18
Shareholders of Record _782
1997 Revenues _$5,493,760
Full-Time Employees _80
Entertainment Technologies & Programs, Inc. (OTC:ETPI) is a fully integrated entertainment and amusement company and a government approved supplier of entertainment services on US military bases worldwide. The Company has been awarded an Air Force Non-Appropriated Funds Contract, which allows the company to obtain contracts from the military without competitive bidding. It is now expanding into the civilian market place.
The original Company was founded in 1978 and was restructured in 1996. In 1997, ETPI became a PROFITABLE enterprise and is expected to maintain a solid rate of growth. For the first NINE MONTHS of FY 1997, the Company recorded a profit of $.01 per share, based on revenues of $4.4 million. As of March 31, 1998 there were 24.9 million shares outstanding with 5.2 million in the public float and the company's book value was up to $.22 cents per share.
ETPI's operating entities offer tremendous synergy and consist of the following six divisions:
NiteLife Entertainment, which installs and operates entertainment systems in nightclub facilities on U.S. military bases worldwide.
Dynamic Image, which designs and constructs entertainment facilities and restaurants.
Vision Quest Production, which designs, plans, promotes and produces live performances and entertainment booking in both military and civilian markets.
Performance Sound & Light, which provides catalog sales of sound and light equipment to civilian and military markets;
StarGate Entertainment, which is an amusement equipment installation and operation entity, which includes Hero's Family Entertainment Centers.
Red Fish Management, which provide food service management for restaurants.
With these acquisitions and openings, ETP is boldly going into the civilian market, armed with an impressive track record of performance in the military arena.
The acquisition of Hero's Family Fun Center has projected yearly revenues of $.75 million and brings land, facilities and other assets of over $3 million, with but $575,000 in debt.
The acquisition of Chacho's Tex-Mex restaurants have projected revenues of about $1.2 million annually and increased the company's assets by more than $1 million dollars.
Recent News:
The company recently announced a renewal of their non-appropriations contract with the military. This generated approximately $4 million in revenues last year.
They also recently announced a management contract of the arcade facilities (13,000+ sq ft) of space in the Bronco Bowl in Dallas and a leased signed at "The Parks at Arlington Mall" for an 11,300 sq ft Hero's.
The Redfish Bar and Grill has added a boat dock for boaters to float right on up to the restaurant. Sales are very brisk in this hot weather.
THE BIG NEWS (probable Monday Release)
ETPI has reportedly just acquired Water Wonderland, a family entertainment center located in Midland/Odessa, TX.
Water Wonderland is an 18-acre water-fun park in middle of West Texas desert. Single-price admission provides unlimited use of all facilities including five water slides, water toboggan, swimming and diving pools, Mountain Rapids tube ride, wave pool, sandy beach, plus squirt pools and playgrounds for younger children. The waterpark is open May-Sept. Adjacent is miniature golf open year round.
The "Family Entertainment Complex" also includes an arcade, a mini-Formula One racetrack, bumper boats, paddle boats, and a 1/8 mile racetrack (real racing) that seats 3500, and a restaurant.
Here's a small picture: lone-star.net.
I believe the park is around a $3,000,000/yr operation. It is being sold by an individual who acquired the property as part of a bankruptcy deal. He doesn't wish to manage it, so he's selling it off (and the buyer will get a sweet deal).
Here's the kicker: The water park comes with 50 acres of undeveloped land. ETPI would obviously make use of the land. The current arcade is tiny, they would most likely expand it (probably more than 10,000 sq ft), and add an 8,000 sq ft laser tag arena. The dirt track (which seats 3500, typically draws 1000 to each race) currently doesn't have a liquor license. However, ETPI does have a Texas liquor license (from Redfish and Chacho's restaurants), and would apply to sell beer at the dirt track (hopefully not to the race car drivers!) to increase revenues. Since ETPI also is in the concert promotion business, they could also use the track and seating to hold concerts. There's plenty of room to include a "lazy river" for tubing around the water park, a golf driving range, and a pitch and putt/small scale golf course.
More News!
The Arlington Mall Hero's is now open. Slight delay in opening because they had to wait for fire marshall approval. It is expected to generate $3,000,000/yr in revenues. I don't know if this will go out as a separate release, or piggy-backed with the Waterpark release, or just released locally to the Dallas/Arlington news media.
But Wait, There's More!
The Bronco Bowl location (http://www.broncobowl.com) will be open probably this weekend (except the laser tag, which will take a little longer). This location will generate about $2,000,000/yr in revenues.
Still More!
The Friendswood Hero's (located next to one of their Chacho's restaurants) will open before the 4th of July (big fireworks show is located near the restaurant, which is why they are hurrying to complete). This will add roughly $800,000 to revenues, and it will feed off Chacho's traffic (and vice versa), so both should benefit from the other being there.
Thought I Was Finished?
No Way! Although these are a little less definite:
The company is looking at a chain of 6 restaurants which they will acquire when the stock price reaches $2 and stabilizes there (they don't want to have to issue a bunch of shares at these lower prices, too dilutive). This chain wants to become public, and sees this as their avenue to do it. The 6 restaurants combined would add about $12 million in revenues and $3 million in profit.
A major money source or fund with an aggressive growth pool of money is planning on picking up 1 million shares of ETPI when the stock trades above $1 for 30 days.
The company is evaluating another deal for a 9,000 sq ft facility similar to Redfish where they can book bands. They are also looking at acquiring the 1200 seat bar at the Bronco Bowl.
Also, the company may announce that they will be getting out of factoring receivables, which was a drain of about $6,000 per month ($72,000 per year). Cash flow is now strong enough not to have to factor receivables (factoring receivables is basically selling your accounts receivable for cash, but you have to sell at a discount (6% to 8%) for the other party to assume the risk of bad receivables. So for every $100,000 in receivables, ETPI would get $94,000). Now that cash flow is strong, they can discontinue this practice and save the discount charges. That goes straight to the bottom line.
Summary
ETPI is currently bringing in about $250,000 per week in revenues, or roughly $1,000,000 per month or $12 million annualized. That includes just the core military business, two Chacho's locations, one Hero's, and Redfish (doesn't include the Water Park, Bronco Bowl, Arlington Mall site, or Hero's adjacent to Chacho's, which combined will bring in another $8.8 million in revenues per year. If the stock price stablizes over $2 and they acquire the 6 restaurants, that would add an additional $12 million in revenue. So in a very short period of time, ETPI's revenue run rate could go from $5.5 million last year to $12 million current to over $32 million! And these are highly profitable operations (game/laser tag centers running anywhere from 40% to 50% net profit rate). And this doesn't even factor in additional growth (which is expected) of the Hero's family entertainment centers, which they think they could almost double the number every quarter.
I would suggest calling Dan Telles (PR) at (281) 486-6061 for more info. |
