News Release:
August 03, 1999 08:17
Weston Partners Initiates Coverage On Advanced Optics Electronics Inc.
WESTON, Conn.--(BUSINESS WIRE)--August 3, 1999--Weston Partners LLC ("Weston") initiated coverage on Advanced Optics Electronics Inc. ("ADOT") (OTC BB: ADOT) with a strong buy recommendation.
Weston's research report can be viewed on ADOT's Web site at www.adot.org or contact Eric Landis at 203/221-7106. Text of Weston Partners, LLC report July 1,1999.
Advanced Optics Electronics Inc. - "ADOT" represents an unusual opportunity for the investor seeking the potential returns of a leading edge, "start-up" with the safeguards of a fully reporting, SEC compliant company.
With its patented flat panel display technology, ADOT is poised to capitalize on the dramatic success and growth potential of the outdoor advertising industry. Its additional involvement in biomedical technology holds great promise for significant financial reward.
Market Information
Price: 0.10 Book Value $1,300,000
52-Week
Price Range 0.036-0.25 Dividends Per Share none
Shares
Outstanding 31,400,000 Average Daily Volume 243,000
Shares
in the Float 14,000,000 Insiders Holdings 45%
Market
Capitalization $3,140,000 Institutional Ownership n/a
Long
Term Debt
6/01/99 $67,000 12- Month Objective $3.00
Financial Highlights
Years Ending Revenues EBT Earnings(a) EPS
December 31
2000 est. $11,085,000 $4,532,000 $2,611,000 $0.08
2001 est. $39,229,560 $20,562,964 $12,150,000 $0.39
2002 est. $109,256,840 $54,438,890 $34,700,000 $1.11
(a) Earnings After Taxes
Investors are advised that any investment contain risks. While Weston Partners LLC may recommend the company featured in this Report, it is not responsible, nor will be considered liable, for any investment decision resulting from this recommendation.
From time to time, Weston Partners LLC may invest in the security featured here, and will apprise readers of its investment upon request. As of the date of this publication, Weston Partners was paid $5,000 in cash to cover administrative expenses associated with this report. Weston Partners has purchased 500,000 of ADOT shares in the open market.
WESTON PARTNERS LLC. All rights reserved. Reproduction in part or in whole is not permitted without prior written permission. Members of the press may reprint with full credit without permission. Information herein was obtained from sources believed to be reliable, but not guaranteed either as to accuracy or completeness.
References to a specific security mentioned herein does not constitute an offer to buy or sell such security. Past performance cannot and will not guarantee future results.
Opinions expressed herein are based on the profiled company's business situation at the time of publication, and are subject to change without notice. Investors are encouraged to obtain an annual report and other public filings before investing.
The Company
Established in 1996, Advanced Optics Electronics Inc - "ADOT" is a developer of patented electronic display technology utilizing its proprietary SLM (Spatial Light Modulator) light valve. This advanced technology has product application in "television quality" billboards, medical testing equipment, military displays, computer monitors and high definition video transmission.
ADOT's initial product, scheduled for delivery late this year, is targeted at the outdoor advertising industry. Replacing static billboards, the company provides flat panel displays with crisp, flicker - free images. ADOT's turnkey package manages billboard graphics from a remote access terminal, enabling advertisers to sell billboard time as they would radio or TV ads.
In addition to its core business, Advanced Optics Electronics has established a strategic position in biomedical technology by acquiring 22% of BioModa Inc. Based in Albuquerque, N.M., BioModa Inc. is an emerging biomedical company specializing in break-through cancer diagnostics and therapy.
BioModa's research team of prominent cyto-pathologists have developed a patented process of detecting the onset of lung cancer several years prior to the actual appearance of the invasive carcinoma. BioModa is also working on diagnostic imaging and radiopharmaceutical therapy for other types of cancers.
Recently, BioModa concluded an agreement with the People's Republic of China to provide a lung cancer diagnostic turnkey package to the city of Shanghai.
Using its proprietary technology, Advanced Optics Electronics Inc. can produce the scanning devices necessary to the cancer detection process.
Advanced Optics Electronics Inc. has initiated discussions to acquire a substantial minority interest in a fiberoptics switching company located in the Albuquerque area. If concluded, this acquisition would form the nucleus of an "ADOT" fiberoptic division.
The company acknowledges the interest of a New York based group in purchasing a substantial minority holding in ADOT.
Advanced Optics Electronics Inc has filed Form 10-KSB (File No. 0-245-11) with the SEC, including publicly audited financials, to become fully reporting. It views this as an important step toward the attraction of serious investors and the attainment of a NASDAQ listing.
The Market
"Fueled by scorching demand from heavyweight national clients such as Sony and Microsoft, outdoor ad revenues are hitting new heights...with double digit growth.... Much of the gain stems from improved technology...." - Business Week, September 21, 1998.
"This year advertisers are expected to spend about $4.8 billion on out-of-home media.... Investors who anticipated the billboard renaissance have profited handsomely."- FORTUNE, March 1, 1999
The outdoor advertising industry currently enjoys a mere 2% of the $190 billion advertising market and industry experts are unanimous in their view that it should experience a significant increase in market share.
Outdoor is one of the most stable advertising media with its principal risk to success and expansion basically limited to economic recession. Since 1970 it has experienced only one year of revenue decline (1992) and has seen revenue grow at a compound rate of 8% per year.
In 1997 billboards accounted for 57% of outdoor ad revenues and that proportion is growing dramatically. Such growth is due in large measure to the creativity, flexibility and lower costs achieved through technologies like those owned by Advanced Optics Electronics Inc.
The worldwide market for processes for the early detection of cancer and breakthrough therapies is huge. ADOT's strategic partner, BioModa already has a foothold for such activities in China, where more than 900,000 people die annually from lung cancer. BioModa is also currently engaged in testing projects with partners elsewhere in the world, with a significant presence in Asia.
Competitive Advantage
Today the electronic display market is dominated by CRT's and LCD's manufactured by such suppliers as Mitsubishi and Toshiba. These products are inferior in performance as large outdoor displays compared with Advanced Optics Electronics patented technology. ADOT's competitive analysis indicates that no other company is currently working on like products.
Key Management
Michael H. Pete, president, director
With over 25 years of business and professional experience, Pete has been president of ADOT since 1994. His prior experience included chief executive positions in two high tech companies, project manager for Booz, Allen and as a technical consultant for the U.S. Department of Energy.
Leslie S. Robins, chairman and executive vice president, since 1993.
Robins has held executive positions in investment banking and management focusing on small technology companies and the entertainment industry.
John J Cousins, vice president of finance
Cousins began his business career as a design engineer for Ampex Corp and the American Broadcasting Company. After receiving his MBA from the Wharton School he held several senior financial management positions focusing on capital markets and business development.
Garth W. Gobeli, Ph.D., chief scientist
A prominent scientist in the fields of optics and spectroscopy, Dr. Gobeli's former positions included those of sr. scientist at Sandia National Labs and physicist at Bell Labs.
Albert Goodman, Ph.D., science advisor
A nuclear physicist, Dr. Goodman did pioneering work in radar component re-design for Hazeltine Electronics. He has held senior scientific positions for the Los Alamos and Sandia National Labs, and was vice president of research for Technologies Specialties Inc.
Harold C. Herman, director
Member of NY and California Bars. Formerly sr. partner of NY law firm and manager in Bell Labs patent department.
Financial Projections
Advanced Optics Development Inc. foresees a business with extraordinary profitability.
With its first unit scheduled for shipment later this year, the company is forecasting 1999 sales at $1.2 million. With gross margins at 52.5%, it plans to bring over $400,000 to the bottom line. Projected sales are $11 million next year with net profits of $4.5 million. ADOT anticipates sales to exceed $100 million by 2002 with net profits solidifying at 50% of sales.
Valuation Summary
We see Advanced Optics Development Inc. as a good buying opportunity. It has proprietary technology for a product for which there is significant demand in a rapidly growing market. Prospective customers have already approached ADOT expressing intent to acquire its flat panel outdoor displays.
The company's proprietary technology has applicability to other products with considerable growth potential. It has a substantial equity position in a biomedical firm, also with patented technology in a high profile area, with which it can develop synergy.
Sales and profit projections are reasonable and represent a very successful business venture. The company's audited balance sheet is "clean." At merely $67,000, long term debt is less than 6% of total net worth. The fact that it is a fully reporting organization compliant with SEC requirements shields the investor from risk.
This news release contains forward-looking statements with respect to the results of operations and business of the company that involves risk and uncertainties. The company's actual future results could materially differ from those discussed.
Risks and uncertainties of the company will be detailed from time to time in the company's periodic reports to be filed with the Securities and Exchange Commission.
CONTACT: Advanced Optics Electronics Inc.
505/797-7878
adot.org. |
