| | Did anyone see this on Quintek?
Fears over the ease with which hackers can tap into computer files and change critical financial information have revived what many believed was a dying technology: Microfilm."
*Popular Mechanics January 2004 issue, page 22 "Microfilm Defeats Digital Cheats"
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Microcap investors looking to discover a 'pure play' on microfilm should take a look at Quintek...
Quintek Technologies (OTCBB:QTEK)
Recent Price: .13
Average Vol: 289,900
AUTHORIZED SHARES 50,000,000
AUTHORIZED PREFERRED SHARES 10,000,000
SHARES OUTSTANDING ~48,600,00
PUBLIC FLOAT ~24,000,000
MARKET CAPITALIZATION (as of 12.18.2003) ~$6,318,000
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Quintek does business in the film-based imaging market segment within the content and document management services market. On March 15, 2002 IDC Research stated that.. "The content and document management services market will grow at a compound annual growth rate (CAGR) of 44% to reach approximately $24 billion in 2006." Daratech, Inc. sized the market for document and content management specifically within the engineering, manufacturing and construction sector at $1.9 billion in 2000. The content and document management services market is comprised of several market segments such as digital document management software and services, records management, digital imaging and film-based imaging.
TECHNICALLY SPEAKING
The stock has traded between .10 and .19 cents for several months now, establishing a solid channel. With the stock bouncing along towards the bottom of the extended channel, traders could take a position expecting the stock to trade back toward the highs. A breakout of .20 cents should establish new levels and set the stage for a solid move.
FUNDAMENTALLY SPEAKING
Quintek’s potential market is HUGE. As noted in the Company’s press releases, IDC estimates the market at 24 BILLION by 2006. If Quintek can capture just 0.05% of what IDC estimates the market to be, that represents 12 million dollars. New Management came on board 10 months ago and has completed the financial restructuring and is now looking to move forward growing the business.
The Company’s technology, originally developed by NCR, is tested and well established. Quintek’s products are installed and running in many Fortune 500 companies and Federal agencies such as: Caltrans, Saudi Aramco, Lockheed-Martin, TRW, US Navy, PG&E, Baltimore Gas & Electric, NASA, Boeing, Saab Aerospace, GTE Airfone and the Canadian Government. Obviously they are doing something right!
OUTLINING THE OPPORTUNITIES
The Company has outlined a strategy and discussed its 3 year sales forecast with shareholders in a letter from the President. In a press release issued June 5, 2003, Quintek's new management disclosed the Company's primary objectives, which are to reduce debt and grow sales. Management's forecasts projected sales of 17 desktop microfilm printer units in the 12-month period ending February 2004, growing to 136 units in the 12-month period ending February 2006. This represents growth of 800% within that period! Even more impressive, Quintek sold 5 units last year, with new management’s forecasts; growth would be almost 2500%! With Quintek’s average desktop plotter costing $65,000, 136 units would equate to over 8.8 million dollars not accounting for other products and services..
Now Quintek has expressed its interest in developing a smaller, 35mm desktop, chemical-free roll film printer. The obvious observation, even by a layman, is that this market is larger than Quintek’s current market. The Company will most likely continue to pick off the low hanging fruit and cater to its current customers and exploit that market to its full potential, however the possibilities in the mainstream 35mm space are exciting to say the least.
Could the development of this product catch the attention of a larger player, perhaps making Quintek an acquisition target…? We don’t know, however it seems plausible that if the Company can develop the market a larger player could come in and see the value there.
INVESTMENT HIGHLIGHTS
• Experienced management – Quintek’s management and advisors have immense market experience and expertise;
• Recent infusion of capital - Quintek secured a $500,000 financing to grow the business;
• Exciting new products in the pipeline- Quintek is developing a new 35mm roll film printer;
• Fortune 1000 install base – Quintek’s products can be found inside the document management departments of some of the world’s largest companies;
• Superior technology – Quintek’s product is superior to the competition, environmentally friendly and cost-effective;
• Cottage industry ripe for consolidation – Many desirable acquisition candidates have been identified as potential targets;
• Positive restructuring efforts – Quintek’s management has successfully restructured the debt and are moving forward with planned organic growth. |
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