Dave, Ivan, and Mike:
Stockpro Club released a buy recommendation on ROMT today also:
RomTech, Inc.
ROMT: Nasdaq:ROMT
Last Trade 12/19/97 $2 1/2
Change +3/32 (+3.90%)
Volume
Bid 2 15/32
Ask 2 9/16
Avg Vol 150,227
52-week Range 15/16 - 5 1/2
Market Capitalization $18.5M
Shares Outstanding 8.96M
Float 5.30M
Fiscal Year End: June 1997
Sales ($ mil.): $4.5
1-Yr. Sales Growth: 45.2%
1997 Employees: 33
1-Yr. Employee Growth: 17.9%
ROMT is extremely bullish. Tendencies for prices to began advancing are extreme at 95-100% with a short term
upside potential of $4. ROMT is well-positioned for growth, even in this environment of economic crisis in Asia.
ROMT has above average safety with well above average upside potential. It reflects that ROMT is likely to
give well above average, relatively consistent returns over the long term. For the three months ended 9/30/97,
revenues increased 43% to $1.5 million. Net income applicable to Common Stock totalled $61 thousand vs. a
loss of $408 thousand.
RomTech, headquartered in Langhorne, PA was founded in 1992 and went public in 1995. RomTech
develops, publishes, markets and resells a diversified line of personal computer ("PC") software primarily for
consumer and business applications. RomTech promotes the Galaxy of Games(TM), Galaxy of Home Office
Help(TM) and Galaxy Deluxe(TM) brand names (the "Galaxy Series") in order to generate customer loyalty,
encourage repeat purchases and differentiate the Galaxy Series products to retailers and consumers.
RomTech targets the market of home and small business personal computer users. RomTech's sales are
primarily made through a large national distributor that sells to large national retail chain stores. RomTech is a
provider of consumer, educational, and business software, is cashing in on the rapid expansion of the PC
universe, targeting home and small office computer users. The firm is trying to develop brand awareness, so
consumers associate its name with consistent quality. RomTech uses contractors to produce its software, and
distributors (Slash Corp. markets 35% of its products), direct mail, and computer trade shows to sell its
products. Distributors market to megastores like Wal-Mart, Computer City, and Office Depot in the US; its
software is also sold in the UK and Japan.
Continuing strong retail sell through for its top selling Galaxy Series products has resulted in dedicated
merchandising seasonal promotional opportunities with Computer City, Office Depot, Target Stores and
WalMart. Second quarter ending Dec. 31, 1997 is on target for record results. The Galaxy 'Superbranding'
strategy, launched in February of this year, is producing the results we had anticipated. New Galaxy brand game
and productivity titles are enjoying the same high demand that our other titles are experiencing. RomTech's goal
of doubling revenues in fiscal 1998 to over $8 million was based on the success of it's Galaxy Series products.
The execution of the Galaxy Series branding strategy is currently achieving results above expectations. The sell
through data continues to demonstrate satisfying consumers consumers demand for value priced, high quality
software. Retailers and distributors are enjoying the success of the Galaxy products and have embraced Galaxy
brand strategy. The consumer and the retailer both love the marketing methodology which provides consistent
quantity, quality and ease of use of Galaxy products.
Computer City implemented the first free standing multi-SKU Galaxy Series merchandising display consisting of
28 individual titles of the Galaxy Games(TM) and Galaxy of Home Office Help(TM) brands. Computer City is
executing a free standing promotion of the Galaxy Series products in 79 stores for an initial six month period.
The order value for the product load-in for this promotion amounted to $85,000 and the sell through could
generate an additional $250,000 to $500,000 in revenues during the promotional period. This is a significant
breakthrough opportunity to present the Galaxy Series in a branded presentation within a major software
retailer. Office Depot and WalMart are conducting in-department and out-of-department promotions on Galaxy
of Home Office Help 50,000 ClipArt images product. Target Stores is featuring a Galaxy Gold promotion as part
of a two month endcap display program for triple A software titles. Its unique proprietary Clip Art products
have been exceptionally well received by users ranging from home desk-top publishers to high-end graphic
designers.
RomTech has formed a strategic partnership with TVML, Ltd. ("TVML'') a United Kingdom based developer of
internet based interactive games. This enables RomTech to aggressively develop market share in the rapidly
developing internet based game market utilizing the Galaxy brand name. Based on our current order activity,
RomTech expect revenues for the second quarter to be approximately $2.6 million, an almost 150% increase as
compared to last year's second quarter restated revenues of $1.06 million. Earnings for the second quarter are
expected to be 4 or 5 cents per versus a loss of 12 cents per share for the second quarter last year. First half
fiscal 1998 revenues are expected to approximately match all of fiscal 1997 revenues of $4.4 million.
Under the terms of the TVML agreement, RomTech has gained exclusive rights in North America to
publish and distribute a Galaxy version of TVML's internet based interactive games. RomTech plans to
launch Galaxy
Online(TM) in January 1998. Galaxy OnLine will provide all buyers of RomTech's Galaxy of Games(TM) titles
access to unlimited free internet game play eventually utilizing TVML's current library of over 30 web based
interactive games. The Galaxy OnLine site will offer fun, exciting, challenging multi-player game
experiences for all ages. The theme of the Galaxy OnLine website is compatible with intuitive
Windows-95(TM) based graphically rich interfaces. Additional features such as email; chat rooms; FAQ's
and coming attractions will be accessible to further enrich the Galaxy OnLine users' experience.
RomTech plans to introduce 6 new Galaxy of Games/Galaxy OnLine products at retail to support the Galaxy
OnLine initiative. RomTech will coordinate introducing new categories of games online. Consumers of Galaxy
products will now have a wealth of new games available to them, providing hours of safe, easy to enjoy, family
fun and entertainment. During the Thanksgiving week sales period a major national retailer reported that
RomTech's Galaxy of Games titles accounted for 20% of their total budget software sales. This is remarkable
evidence of the growing strength of the Galaxy brand. Incremental revenues from the Galaxy OnLine products
during the second half could enable RomTech to exceed its goals for fiscal 1998.
2000 Cabot Blvd., Ste. 110
Langhorne, PA 19047-1833
Phone: 215-750-6606
Fax: 215-750-3722
romt.com |
