WestBond Enterprises Corporation (WBE-CDNX)
Current Price: $0.15
As mentioned previously, QIS Capital was quite impressed with the meeting we
had with Westbond last week and we are excited about the company's future.
Revenues for the month of April 2002 are expected to be in the order of
$275,000 which translates into $3.3 million on an annualized basis. Over
the next few months, revenues are expected to reach $300,000 to $350,000 per
month or $3.6 to $4.2 million annualized, which is nearly double numbers
from the last fiscal year.
What QIS Capital found to be most intriguing was Westbond's potential for
growth. The jumbo roll machine, which commenced operations in January 2002,
has turned out to be very successful. Not only is the machine already
having a significant impact on earnings, but it is currently running at only
7% of capacity. New products are being planned and implemented which should
add considerable upside over the next 6 to 12 months. The jumbo roll
machine by itself is capable of annual revenues of $4.5 to $6.5 million.
Another major development which is expected to improve the company's
financial results is the attaining of new raw product for processing. This
product is being purchased well below market pricing and is of top quality.
Some of this new material will be instrumental in expanding Westbond's
product line into new areas.
While we don't expect Westbond to receive the previously announced contract
with Air Canada, the company has an impressive line-up of potential clients
which have scheduled meetings over the next month. The company has also
already received orders from two major Canadian medical firms and additional
orders from a customer in Winnipeg. Westbond is expecting continuing orders
from these customers. Some of the meetings over the next few weeks have the
potential to turn into major orders which would have a significant impact on
future financial results.
Westbond also remains committed to purchasing three new machines which it
expects to have running this Fall. These machines are planned to utilize
some of the raw product being purchased.
Completely ignoring the potential for new orders and the addition of new
machinery, Westbond is poised for an impressive year. Revenues are expected
to total $3.5 to $4.0 million for fiscal 2003 ending March 31, 2003, and
pretax earnings are estimated to be $400,000 to $600,000. Net income should
be about $300,000 to $400,000 or $0.03 to $0.04 per share, approximately
four to five times earnings achieved during the fiscal year just completed.
With the addition of the new machines along with several significant
potential orders, these numbers could prove to be conservative.
Westbond is currently trading at only 4 to 5 times expected earnings for
fiscal 2003. (ending March 31, 2003) |
