ETPI-NEWS/Good MICROCAP Review Update w/ target of .20...
Back In Black! - Company Update
Entertainment Technologies & Programs, Inc.
(OTC-BB: ETPI, $0.065 x $0.07)
What a difference a year makes! One year ago, Entertainment Technologies &
Programs (ETPI) was literally struggling to stay alive. Trying to recover
from a three year period of unprofitable diversification (or as Peter Lynch
would say, "diworseification"), for the fiscal year 2000, the Company
reported a loss of over $1.3 million on just $4.3 million in revenue. The
Company's current assets stood at $457,000 with a horrendous 1:6 current
ratio and a negative book value of ($0.03) per share. The Company had
negative cash flows in all of their divisions except their retail sector
(Performance Sound & Light), and they weren't even able to fill all the
PS&L orders because they didn't have the cash or borrowing power to
purchase inventory to fill orders. To add insult to injury, their auditors
slapped a "going concern" statement on their year-end fnancials. ETPI was
hardly the makings of a good growth stock investment.
Late last year, the Company began a transformation to right itself. ETPI
began by hiring a seasoned CFO (George C. Woods), who was instrumental in
planning a path to restore ETPI to profitability. The Company planned an
aggressive debt reduction strategy to rid itself of underperforming assets
that were contributing to negative cash flow. The sale of these assets
would go towards the reduction of debt, which would result in an improved
balance sheet. With the Company refocused on its core operations and a
balance sheet which would allow for improved borrowing power, ETPI
anticipated that they just might be able to return to break-even operations
by the end of fiscal 2001.
It looks like they're ahead of schedule.
According to a recent press release, the Company is producing record
revenues and positive cash flow in all three of its divisions (Performance
Sound & Light, Nightlife, and Hero's). The Company is projecting $350,000
in revenue and $150,000 in gross profit from PS&L, $622,000 in revenue and
$342,000 in gross profit from Nightlife, and $120,000 in revenue from
Hero's with a positive cash flow of 25%. With operational expenses in check
and debt expenses greatly reduced, the Company should report third quarter
results (expected by early August) of approximately $1.1 million in revenue
and slightly better than break-even earnings from operations (yes, positive
earnings!). The Company is expected to continue its rapid growth into the
fourth quarter (July thru September, typically its strongest quarter) with
the recent addition of a new Hero's entertainment center and a new retail
D.J. store. With a major advertising campaign underway to promote their
Hero's entertainment centers and D.J. store, along with continued strength
at Nightlife and PS&L, we are projecting fourth quarter revenues of
approximately $1.2 million, with net earnings again in the black. While the
year-end totals will still reflect a net loss for the year, the quarterly
revenue and earnings growth for the final quarter will be more indicative
of the revenue and earnings growth heading in to next year.
Coming off a loss of $0.03/share last year, ETPI's FY2001 loss per share
should be reduced to about $0.005/share. Looking forward to next year and
projecting results based on FY 2000's 3rd and 4th quarter run rates, the
Company should have revenues approaching $4.8 million with net earnings per
share of $0.01.
Based on internal growth alone, the Company should be able to maintain a
20-25% growth rate in revenue and earnings for the forseeable future.
Applying a conservative PE of 20 to projected earnings would give us a
near-term price target of $0.20, which is nearly a 200% increase from the
current price of $0.07. With positive earnings on the horizon and their
troubles behind them, downside appears to be very limited at the current
price.
However, these projections do not take into account any external growth
strategies. With the balance sheet cleaned up and internal growth back on
track, ETPI is evaluating opportunities that would accelerate the growth of
their core operations. Having learned from the past not to stray far from
their core competencies and to not assume significant debt or liabilities,
the Company is looking at several acquisition candidates which would be
immediately accretive to cash flow and earnings per share and that provide
significant operating synergy and/or vertical integration opportunities for
their core businesses. Opportunities being evaluated include expanding
their AFNAF contract to offer consumer appliances in addition to their
consumer/professional electronics product offerings. Additionally, several
profitably-run family entertainment centers are being evaluated as
potential acquisition targets to be included in the Hero's division.
The current price also does not reflect the possibility of ETPI being an
acquisition candidate itself. With positive cash flows, a clean balance
sheet, and a very valuable AFNAF contract in hand, ETPI is most likely
trading at a significant discount to what the company could fetch as an
acquisition target.
Buy Low, Sell High
With ETPI selling at historically low levels and real profitability and
growth on the very close horizon, in our opinion the timing appears to be
excellent for investment in ETPI.
Contacts and Links.
Entertainment Technologies & Programs, Inc.
16055 Space Center Blvd., Suite 230
Houston, TX 77062
Phone: (281) 486-6115
Company web site: <http://www.etpinc.net/>http://www.etpinc.net
Performance Sound & Light :
<http://www.performance-s-l.com/>http://www.performance-s-l.com
Stock Information:
OTC BB: ETPI
Fully reporting company, all filings can be found at Free Edgar at
freeedgar.com
Shares Outstanding: Approximately 50 million.
The Microcap Review
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e-mail: microcap_review@yahoo.com
All materials presented on our web site and individual reports released to
the public are not to be regarded as investment advice and are only for
informative purposes. Before making a purchase or sale of any securities
featured on our web site or mentioned in our reports, we strongly encourage
and recommend consultation with a registered securities representative.
This is not to be construed as a solicitation or recommendation to buy or
sell securities. As with any penny stock, companies we profile involve a
high degree of investment risk and volatility. All investors are cautioned
that they may lose all or a portion of their investment if they decide to
make a purchase in any penny stock.
It should be understood that there is no guarantee that past performance
will be indicative of future results. The accuracy or completeness of the
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hold positions in securities mentioned herein, and may make purchase or
sales in such securities featured on our web site or within our reports.
The Microcap Review has received 50,000 Entertainment Technologies &
Programs, Inc. restricted shares from the Company in exchange for various
providing consulting and marketing services. This information is provided
in accordance with Section 17(b) of the Securities Act of 1933, as amended.
Please note that with the exception of press releases that have been
officially released by the Company, information in this report has not been
officially endorsed by the company and should be considered editorial and
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The Microcap Review is not a securities broker-dealer, investment advisor
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and Exchange commission nor any state securities regulation authority.
Accordingly, investors should be aware that the Microcap Review has not
evaluated nor investigated any of the companies listed in this report to
determine their merit or the risk of investment in any such company. The
Microcap Review does not endorse any company listed herein and does not
represent that the information contained in any offering documents states
all material facts or does not omit a material fact necessary to make the
statements therein not misleading. In no event shall The Microcap Review be
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Information presented on our web site and within our reports contain
"forward looking statements" within the meaning of Section 27A of the
Securities Act of 1933 and Section 21B of the Securities Exchange Act of
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assumptions or future events or performance are not statements of
historical fact and may be "forward looking statements." Forward looking
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the statements are made that involve a number of risks and uncertainties
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We encourage our readers to invest carefully and read the investor
information available at the web sites of the Securities and Exchange
Commission (SEC) at: <http://www.sec.gov/>http://www.sec.gov and/or the
National Association of Securities Dealers (NASD) at:
<http://www.nasd.com/>http://www.nasd.com. Readers can review all public
filings by companies at the SEC's EDGAR page. The NASD has published
information on how to invest carefully at its web site.
ETPI NEWS....
July 02, 2001 10:45
ETPI Discusses Company's Performance
HOUSTON--(BUSINESS WIRE)--July 2, 2001--Entertainment Technologies & Programs Inc. (OTCBB:ETPI) announced today that its president, George C. Woods, is currently featured in an interview with CEOcast, a leading on-line financial Web site.
The entire interview is available in audio and text online at www.ceocast.com.
"We have had a top to bottom review of all of our divisions and now have focused on what is our core business," said Woods in the interview. "The main point is that all of our divisions, including our family entertainment centers, are experiencing increased revenues and are contributing positive cash flow for the third quarter as well as expected profitability for the remainder of the fiscal year, ended Sept. 30, 2001. We have a tremendous opportunity to grow our business by about 40 percent internally for the next year; this is organic growth within our existing business units."
About ETPI:
Entertainment Technologies & Programs Inc. ("ETPI"), a Delaware corporation, is strategically positioned as the provider of a comprehensive array of entertainment products and services to both military and civilian markets. ETPI is a public company traded on the NASD, OTC Bulletin Board under the symbol ETPI. The company was founded in 1978 and is currently headquartered in Houston.
About CEOcast:
CEOcast's programming is distributed to millions of on-line investors at over 700 financial Web sites as well as to more than 20,000 portfolio managers, buy-side analysts and traders at more than 3,300 North American institutions. Content is also disseminated to over 7,000 investment research professionals representing over 425 institutions.
For more information about ETPI visit the company's Web site (www.etpinc.net). To be placed on our mailing list for company updates e-mail pcardwell@etpinc.net.
This release includes forward-looking statements made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995. Any such forward-looking statements may involve risks and uncertainties that could cause actual results to differ materially from any future results encompassed with the forward-looking statements. Factors that could cause or contribute to such differences include those matters disclosed in the company's Security and Exchange Commission filings.
CONTACT: Entertainment Technologies & Programs, Houston
Philip Cardwell, 281/486-6115 Ext. 207
Fax: 281/486-6155
Web: www.etpinc.net
E-mail: pcardwell@etpinc.net
ENTERTNMNT TECH & PROGRAMS INC - ETPI
Price 0.07
Net Change -0.00
Volume (000) 72
Day High 0.08
Day Low 0.06
as of
07/02/01 18:06 PM EDT |
