QIS New Company Profile - September 4, 2003
CON-SPACE Communications Ltd. (CCB:TSX-V)
Current Price: $0.71 (September 3, 2003)
QIS Capital is very pleased to present CON-SPACE Communications Ltd. (CCB:TSX-V) as the latest addition to the QIS Capital Feature Companies.
CON-SPACE has achieved significant success over the past 12 months and is poised for further significant growth this year.
CON-SPACE is recognized worldwide as the leading designer and manufacturer of specialized voice communication equipment used by police, fire, rescue,
government agencies, militaries, municipalities, and the general industry.
The company’s communication equipment is designed for disaster and emergency response including confined space, structural collapse, swift water, high angle,
tactical, hazmat, trench, and covert operations. Having clear, uninterrupted voice communication is crucial for emergency personnel. Rescuers can use
CON-SPACE products while wearing flash hoods, full face breathing apparatus, and encapsulated suits. CON-SPACE has offices in British Columbia,
Washington, and England and has distribution channels throughout North America, Great Britain, Europe, Australia, and parts of Asia, and South America. The
company’s largest market is presently the United States but the European market has been growing at a tremendous pace. Original Equipment Manufacturing
(OEM) sales (“private label”) have also been a recent focus for CON-SPACE and are now the company’s highest growth department.
CON-SPACE services a number of well-known and well-respected major companies. In fact, almost 100 of the Fortune 500 companies are customers. Some of
the company’s current customers include the US Military, B.F. Goodrich, Boeing, Lockheed, AT&T, 3M, Shell, Proctor and Gamble, Labatts, TYCO, and several
major airlines.
CON-SPACE presently has two main product lines. Hardline systems are manufactured for use in confined space, hazmat, structural collapse, victim location,
training, bomb disposal, hostage/covert situations, decontamination, and trench rescues. These products include different configurations of rescue kits which allow
communication between rescue personnel, standby and the attendant. These kits include switch boxes, cables, throat microphones, headsets, etc.
The company’s radio accessories are designed specifically for swift water, fire fighting, riot, SWAT, training, military, covert operations, and high angle rescues.
These products are designed for use in high noise areas as well as in conjunction with any respirator, breathing apparatus, or encapsulated suit.
Other accessories manufactured by CON-SPACE include the power talk box, vital sound, and rescue probe. The talk box can be lowered over the edge of a cliff,
structure, or into trenches to provide two-way communication. The vital sound product is designed to check for the vital signs of victims during the typical
commotion surrounding rescue or first aid situations. The company’s rescue probe can fit through a 2 inch hole and provides two-way communication. The
CON-SPACE rescue probe was instrumental in the highly publicized and successful rescue of nine miners in Pennsylvania in July 2002. CON-SPACE’s equipment
was also used in the aftermath of the September 11 terrorist attacks. All of the company’s products are waterproof and are certified “intrinsically safe” by
independent standards agencies.
CON-SPACE has achieved an increase in sales for 11 consecutive years. The company’s recent success can be attributed to new sales opportunities, increased
brand recognition, and product maturity. A large number of companies within the industry are now calling CON-SPACE for communication solutions indicating that
the company is moving out of the educational phase of safety communications and into a recognized brand position as a reliable supplier of safety products.
As at March 31, 2003, CON-SPACE had positive working capital of $1.1 million and long-term debt of only $327,650. Shareholders’ Equity at the end of the
period was $1,018,730 but is now starting to grow rapidly as the company only reached profitability in the last 2 years.
Sales for the 9 months ended March 31, 2003, totaled $3.8 million resulting in gross profit of $1.9 million and net income of $755,751 or $0.09 per share. This
compares favourably to the same period in the prior year when revenues were $2.2 million resulting in gross profit of $1.0 million and net income of $64,789 or
$0.02 per share. CON-SPACE recently announced that sales for the year ended June 30, 2003 reached $4.8 million. Full financial results are expected to be
announced in mid-September. Pending any adjustments by the company’s auditors, earnings will likely be about $950,000 or $0.10 to $0.11 per share.
CON-SPACE presently has 8,859,980 shares outstanding and 9,972,980 shares fully-diluted. Management and insiders currently control approximately 45% of
the outstanding shares.
Contact Information:
Address: 505-5600 Parkwood Way, Richmond, BC V6V 2M2
Phone: (800) 546-3405 or (604) 244-9323
Fax: (604) 270-2138
Website: www.con-space.com
Email:
QIS CAPITAL SUMMARY:
CON-SPACE is a truly remarkable story. The company has grown from a small start-up corporation about 11 years ago, to a well-respected and well-recognized
leader in the communication industry for emergency and hazardous industries. The company has no real competition and services a seemingly limitless market. In
fact, any large participant that seeks entrance to the markets that CON-SPACE serves would most likely find it highly cost effective to acquire CON-SPACE as
compared to attempting to duplicate what CON-SPACE has already done.
CON-SPACE achieved excellent financial results in fiscal 2003 (ended June 30) and exceeded management’s original revenue forecast by $1.5 million or 45%. The
company is officially targeting sales of $4.7 million for this fiscal year but we believe that this will again prove to be conservative and anticipate actual revenues of
about $6.8 million for the year. Homeland Security is now a high priority item in the U.S. and around the world. In addition, tightening regulations for those working
in confined spaces can only help to increase demand for CON-SPACE’s equipment. New accounts are being added daily and major “private label” customers are
requesting new products from CON-SPACE.
QIS Capital is confident that CON-SPACE will become a more widely recognized company in the next 12 months which should lead to a dramatic increase in
revenues and associated earnings. There are additionally several potentially huge contracts which, if awarded to CON-SPACE, would have a significant impact on
the company’s future operations and financial success. Ignoring this potential upside, CON-SPACE has developed a stable and predictable business model which is
poised for considerable growth. Investors have largely ignored the company’s success over the past 6 months as CON-SPACE is not well known in the investment
community. The company’s shares are currently trading at about 6.5 trailing earnings without giving any upside to future growth.
QIS Capital is pleased to initiate coverage of CON-SPACE Communications and looks forward to providing subscribers with regular updates on the company. A
full corporate profile for CON-SPACE will be provided on QIS Capital’s website next week. |
