(BSNS WIRE) CBQ CEO/President Bart Fisher Issues a Shareholder Letter
CBQ CEO/President Bart Fisher Issues a Shareholder Letter
Business Editors & Technology Writers
HUNT VALLEY, Md.--(BUSINESS WIRE)--May 18, 2001--CBQ, Inc.
(OTCBB:CBQI), the E-Business Infrastructure Company, CEO/President
Bart Fisher issues a Shareholder Letter.
Dear CBQ Shareholder:
The purpose of this letter is to report to you on the activities
of CBQ, Inc. during the last year, and to give you information about
the future direction of the company.
Our mission at CBQ is to be a leading End-to-End solutions
provider for the Information Technology industry. This includes
helping companies acquire the equipment they need to solve their
Information Technology needs, plan through software how to use the
equipment, install networks, and provide ongoing service and
maintenance.
While some of you are intimately familiar with the development of
CBQ, it may be useful for others if the history and development of CBQ
is described. In 1999, CBQ had gross revenues of only about $700,000
and had a few employees in Dallas, Texas, running two small companies,
Reliance Technologies, Inc., and Tophernet. Reliance focused on web
hosting and development, while Tophernet was a small regional Internet
Service Provider (ISP) with about five hundred (500) customers. On
January 14th, 2000, ChinaSoft, a company founded to take advantage of
lower cost Chinese software programmers, did a reverse merger into
CBQ, acquiring a majority shareholder position in the enterprise.
The dynamic growth period of CBQ has occurred since January 14th,
2000 with four important acquisitions having taken place since then.
On August 8th, 2000, CBQ acquired Quantum Technology Group, the third
largest E-Business solutions provider in Baltimore. On March 1st,
2001, CBQ acquired EasySoft, the leading private company using
software programmers outsourced from China. On March 27th, 2001, CBQ
acquired Networkland, a leading distributor and Value Added Reseller
(VAR) of Information Technology equipment and service provider in
Rosslyn, Virginia. And on March 27th, CBQ also acquired Technet, a
company with Indian computer programmers based in Vienna, Virginia.
As a result of these acquisitions, the gross revenues of CBQ were
about $12 million dollars in 2000 and the Annual Revenue Run Rate grew
for 2000 to $27M.
In the first quarter 2001, we have seen our Gross Margin Improve
to 50% as compared to the 1st quarter of 2000, largely as a result of
our streamlining of unprofitable operations. Presently, we are
operating cash positive.
It is no secret that we are operating in a difficult overall
business environment in the Information Technology sector of the
economy, with substantial enterprises going bankrupt everyday. Despite
the overall consolidation, downsizing, and pain in that sector,
however, CBQ has continued to grow. The reason is that CBQ has a
business model based on the establishment of a sustainable competitive
advantage. That advantage consists of the use of global resources to
solve the Information Technology needs of U.S. clients, including
software-programming resources from China, India, and other countries.
We believe that our competitive advantages in software outsourcing
will place us in a position to continue our dynamic acquisitions
strategy. In this economy one person's problem is another person's
opportunity.
The work we are doing at CBQ is truly exciting, and I would like
to give you several examples that show the intellectual depth of the
projects we are working on, and the clients we are servicing. CBQ
currently has a team in place in Detroit, Michigan for a major
automobile company that is developing the software required for the
pre-launch logistics planning of two of its factories that produce
mini-vans. This niche in the supply chain management field is bound to
grow in the future. With over 10,000 parts in each automobile, it is
crucial that the logistics, and supply chain management work well, or
the assembly line will simply shut down if one bolt does not arrive in
time.
Another exciting project is the planning and execution of the
internal messaging systems for Sylvan Learning Centers, a leading
education and distance learning company. With over four thousand
(4,000) employees it is vitally important that the employees of Sylvan
be able to communicate with each other through a unified messaging
system that will enhance the efficiency of the corporation. We believe
this is a large area that we can profitably develop in the future. As
opposed to the automobile project, which involves Inter-Enterprise
logistics, this project involves steps to improve the internal
efficiency of the corporate enterprise.
Apart from software and networking, CBQ has many clients in the
mid-Atlantic region such as The Washington Post.com, for whom it
provides basic computer hardware and service needs.
In the future we intend to become a major competitor in the
federal marketplace, and compete for hardware and software service
business from the Federal Government. We have a GSA Team designed to
place our company in the right portions in the GSA procurement
schedule, so we can compete for large contracts.
As shareholders I am sure that you are interested in what has
taken place with regard to our stock price over the last year.
Students of irony would observe that when we had relatively few U.S.
resources, we had a share price of over $16.00 in early 2000, while
now with a substantial and growing company our price is below one
dollar. That is ironic but not amusing, as in our opinion, the lower
share price does not reflect the current economic reality. It is our
intention to continue growing the company in a fashion that would
justify an improved share price, and continue to examine issues
related to the overall stock structure.
One of the great assets CBQ has is a very active and committed
base of well informed shareholders. Please do not hesitate to contact
our investor relations to share your opinions, concerns, and
suggestions as to how to improve the enterprise. As a publicly traded
company, it is vital that we communicate on an ongoing basis with our
shareholders.
We are in the process of updating and redesigning our website
(www.cbq.com), and I would urge you to visit that site frequently to
keep abreast of the corporate news, share price, and other matters of
interest.
-0-
*T
Sincerely,
Bart S. Fisher
President
*T
About CBQ, Inc.
CBQ, Inc. is a full service, end-to-end e-Business solution
provider, which provides software-outsourcing through its subsidiary
EasySoft International Inc., Beijing, China and Miami, FL; provides
technology and network Integration engineering services through its
subsidiary Networkland, Rosslyn, Virginia; provides software
programming and development though its subsidiary Technet Computer
Services, Inc., India and Tyson's Corner, Virginia; and provides
network integration though its subsidiary, CBQ NETSERV, Hunt Valley,
MD. For more information on CBQ, Inc., visit cbq.com.
This news release includes forward-looking statements related to
CBQ, Inc. that involve risks and uncertainties, including, but not
limited to, quarterly fluctuations in results, the management of
growth, market acceptance of certain products and other risks. These
forward-looking statements are made in reliance on the "safe-harbor"
provisions of the Private Securities Litigation Reform Act of 1995.
For further information about these factors that could affect CBQ's
future results, see the company's filings with the Securities and
Exchange Commission (the "Commission"). Prospective investors are
cautioned that forward-looking statements are not guarantees of future
performance. Actual results may differ materially from management
expectations.
--30--mw/mi*
CONTACT: CBQ Investor Relations, Coral Springs, Fla.
Gary Swancey, 954/757-0582
KEYWORD: MARYLAND DISTRICT OF COLUMBIA
INDUSTRY KEYWORD: COMPUTERS/ELECTRONICS E-COMMERCE INTERNET
NETWORKING SOFTWARE
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