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Technology Stocks : MVSI - AN UNDISCOVERED GEM
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To: TheInvestor who wrote (379)1/6/1998 6:14:00 PM
From: Bankceo  Read Replies (1) of 627
 
MVSI 10K SUMMARY:

I've read every word and every number without falling asleep.

Bottom Line---We still have a strong buy....Here's what happened....

1. Sales totalled $39.9MM in fiscal 1997; roughly flat vs. prior quarter or up 149% vs. prior year.
...The number is lower than hoped for due to slow down in Q4 sales for Machine Vision Segment, and some lost sales when Socrates moved to their new headquarters.

2. EPS was $.01 per share vs. $.09 per share last year. However, last years number was high because of a tax benefit of over $800M or .08 per share.
...MVSI absorbed one time hits this year of $800M in the fourth quarter which hurt earnings by $.07 per share; tax benefits of $.02. THEREFORE......

3. CORE EARNINGS excluding adjustments: 1997: $.06 per share; 1996: $.02 per share......We're making progress...Not enough

4. LINE OF BUSINESS SUMMARY

....MVSI has EARNINGS THAT ARE GROWING in the most important business---Computer Integration and Distribution. Its Software Development business is not yet off the ground (as of 9/97); and the Machine Vision business is not doing well.

MACHINE VISION: '97 REV=$5.5MM; NET LOSS ($.7)MM
'96 REV=$4.6MM; NET PROFIT $.6MM

....NOTE: $8MM of Canadian tax/investment credits can make this business virtually tax free IF MVSI can maek it work

COMPUTER INTEGRATION: '97 REV=$33.8MM; NET PROFIT $1.1MM
'96 REV=$11.4MM; NET PROFIT $0.2MM

...This includes Socrates; JMR; and Expert....Looking Good

SOFTWARE DEVELOPMENT: '97 REV=$0.6MM; NET LOSS $0.1MM

....TECHNET...MUCHO potential with Y2K solutions; could be worth $.20 per share next year

5. MVSI owns 250M shares of ENET...and its Telecom2000 technology license....

6. Company bought 307M shares of stock as of 9/97; More to buy to support the stock

7. Executives have 924M stock options with average exercise price of $3.87...with ranges from $2.94 to $7.

....Inventive to maximize stockholder value are there...and are not excessive

8. Company generated cash of $1.4MM in '97; Decreased cash position by $2.0MM in '96.

9. With $20MM generated, net with the warrants; MVSI, has as we speak, about $2 per share in cash and virtually no debt...Recession proof?

The company has a defined plan to turnaround MVS in Canada and leverage the Year 2000 solution business. This aint no $5 stock based on any rational market valuation. I still see double digits despite the write-offs in Q4 97. In fact, there could be more write-offs if they discontinue certain product lines. This is smart and they have the capital to easily cover and buy other companies.

LOL AND HAPPY INVESTING TO ALL
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