Here is some interesting info on PERF I found while searching the web. This story is old (9/95) but it details the promise of this company even before its recent venture into establishing an internet stock market.
A fortnightly review of small cap growth stocks.
Research Briefs
PERFECTDATA CORPORATION
(NASDAQ:PERF)
Simi Valley, California
Shares Outstanding 3,323,300
Stockholders' Equity $3,869,000
Float (Est.) 1,200,000
Long-Term Debt: None
Price (9/19/95) 1 11/16
Current Ratio 6.0:1
Market Cap $5,600,000
Book Value $1.16
SUMMARY AND OUTLOOK
We are visiting this Company again after nine months because we believe that, despite a
disappointing first quarter (see FINANCIAL DATA), management has effectively turned the
company around and we are impressed with the clean balance sheet. For these reasons we are
comfortable about bringing the Company back to the attention of our followers on "the Street" for
their consideration. Since our first report on the Company last January we are gratified to note that
the stock price has increased by 22.7%. Marketing is the key to management's ability to set a solid
course for steady sales increases. The next few quarters should reveal whether this is truly a
Company to follow for the long haul.
CORPORATE HISTORY
Founded in 1976 and, originally, engaged in a business far removed from today's SIC Classification
508...Machinery, Equipment and Supplies...the last abortive move by prior management, in 1992,
was into the field of telecommunications . That attempt was an effort to design, manufacture and
market data and data/fax modems. After two years of declining sales the Company brought in new
management. Convinced that the telecommunications industry is the domain of large multinational
corporations, new management swiftly closed down that activity to move into the growing, and more
stable, field of office equipment care, maintenance and accessory products. Growth and stability
began to follow.
INDUSTRIAL PROFILE
Office computer care and maintenance products are made for utilization by end-users of computers
and office automation equipment and are designed to eliminate or minimize contamination in personal
and small business computers, facsimile machines, office automation equipment and
mini-and-microcomputer systems. Contamination of such equipment by dirt or introduction into
machinery of foreign objects can be costsly, and on occasion, catastrophic, when it results in
equipment "down-time" in addition to loss of information, higher maintenance costs and reduced
equipment life. The Company's products include a variety of supplies and accessories, including a
canned air-duster, disk-drive cleaners, dot matrix and laser printer cleaners, fax machine cleaners
and tape back-up cleaners. The Company has also added a limited line of ergonimics products.
RECENT DEVELOPMENTS
On August 10, 1995 PerfectData announced it had acquired a majority interest in Starnet Universe,
a Beverly Hills, California based Internet company, and will function as an Internet provider,
worldwide web server and on-line service. StarNet Universe may be accessed on the worldwide
web @ staruni.com. Two other significant events this year were the Company's
announcement of its intent to buy back up to one million shares of the Company's common stock
and the announcement that outside investors had acquired nine percent (9%) of the Company's
common stock.
FINANCIAL DATA
PerfectData, whose fiscal year ends March 31, announced that for the first quarter of fiscal 1996 net
sales had declined 14.9% to $1.5 million from $1.8 million for the same three months a year ago and
net income had dropped to a mere $5,000 compared with net income of $115,000, or $0.03 per
share, ($63,000 from continuing operations) for the matching first quarter of fiscal 1995.
Management said the sales decline was due to larger companies with a similar product line having
entered the marketplace at this time. The Company has working capital of $2.9 million, no long-term
debt, and a credit line of $1,000,000.
INVESTMENT CONSIDERATIONS
Present management of this small company has demonstrated its ability to turn the company around
and achieve profitability after eighteen years of mismanagement. The results of just one year under
new management may be insufficient to judge the future of the Company, particularly in light of the
fact that first quarter results were unimpressive. The prudent investor should conduct his own due
diligence. Call or write the Company for their FY 1995 annual report, proxy statement, Form 10-K
and Form 10-Q for June 30. Address Joseph Mazin, Pres. & CEO, PerfectData Corp., 110 W.
Easy St., Simi Valley, CA 93065. Phone (805) 581-4000 or leave a message on E-Mail at: Bruce
@ Staruni.com.
Paul Gropman
Equity Research
September 21, 1995 (213) 931-4540
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