Rick, like i said before i am still long, and will be for a long time.
I believe they have a good management team, good product potential and a waiting wanting marketplace. But they are a show me company now, the hype is all gone and it will now depend on successful execution.
Not for the risk adverse but i'd rather be long than short at this time. Can't say it won't be dead money for some time but you're best gains will be if you're there for that initial pop, as we all know how volatile this stock can be.
Also, just found this today
Andrew Garrett's Analyst, Revan Schwartz, Comments on Base Ten Systems, Inc.
NEW YORK, April 2 /PRNewswire/ -- Andrew Garrett Inc. released the following on March 23, 1998:
(Strong Buy Recommendation - Reaffirmed)
Base Ten Systems, Inc.
(BASEA) Class A Common
Stock Symbol: BASEA* Shares Outstanding: 7.83 million
Price: 5 1/4 Market Capitalization: 41.1 million
Fiscal Year End: December 31 Dividend: Nil
Long Term Debt/Cap: 15.5 million/37.7% Yield: Nil
1993 Earnings/Share: .17 actual 1994 Earnings/Share: .03 actual
1995 Earnings/Share: (.13) actual 1996 Earnings/Share: (1.16) actual
1997 Earnings/Share: (2.79) actual 1998 Earnings/Share: (1.46)
estimated
52 Week Range: 5.03-16.00
*Andrew Garrett, Inc. makes a market in this security
Commentary:
It has been a long and grueling last half year for the shareholders, personnel, and general supporters of Base Ten Systems, Inc. We all have seen the price of the stock plummet from a momentary high of $16.00 to the $5.00 plus range that it has languished at in recent weeks and while the performance of the stock has admittedly been less than stellar, the Company itself has undergone an extraordinary transformation and moved forward on a multitude of fronts during this very same six month period, making the stock, especially at these depressed levels, an even better buy than it otherwise would be.
First, there were significant changes in senior management. The new management team is headed by Thomas E. Gardner, who is Co-Chairman of the Board, President & Chief Executive Officer. Mr. Gardner has been Director and Co-Chairman of the Board since December 31, 1997 and President and Chief Executive Officer since November 1, 1997. Prior to his employment with the Company, Mr. Gardner was President, CEO, COO and a Director of Access Health, Inc. While at Access Health, Inc. gross annual revenues increased from $45 million to $100 million. Mr. Gardner was employed by the Dun & Bradstreet Corporation and served in various executive positions including Corporate Vice President, and President and CEO of Dun & Bradstreet Health Care Information, Inc.
C. Richard Bagshaw, Executive Vice President, was President and General Manager of Syntex PR of Humacao, Puerto Rico, a subsidiary of Syntex Pharmaceuticals, Palo Alto, California subsequently acquired by Roche Holdings in 1995. From 1991 to 1996 he was responsible for strategy development and implementation for corporate partnering and talent upgrade.
William F. Hackett, Senior Vice President & Chief Financial Officer, was a Senior Manager for the Princeton Data Division of Bloomberg Financial Markets from 1991 to 1997 responsible for the collection, analysis, and distribution of information and product development.
Messrs. Gardner, Bagshaw, and Hackett comprise the three new members of Base Ten's six person executive team, and are joined by Stephen Cloughley and Harvey Cohen, who are responsible for producer development and new products, respectively, and Dick Farrelly, who is responsible for human resources and quality.
Additionally, to complement internal management, a significant appointment was made to the Board of Directors when William Sword was appointed. Since 1976, Mr. Sword has been Chairman of the Board of Wm. Sword & Co. Incorporated, a diversified investment banking firm located in Princeton, New Jersey, and since 1974 has been Chairman of the Board of Sword Holdings Incorporated, a Princeton, New Jersey based company with corporate affiliations throughout the United States. From 1954 to 1976 Mr. Sword was associated with Morgan Stanley & Co., serving in various capacities including General Partner, Director and Managing Director. Mr. Sword is also a director of Roadway Express, Inc., where he is Chairman of its Executive and Finance Committees. Mr. Sword is also active in numerous professional and community associations, including The Bond Club of New York, The Medical Center at Princeton Foundation and the New Jersey Historical Society.
This new management team has the commercial experience, intelligence, understanding of the market, and fortitude to do what is necessary to accomplish the reasonable business objectives of the Company. Besides the mere change in personnel, this management team has transformed the direction, philosophy and mode of operation of the Company from one that possessed a cost plus project type mentality, which is required of a defense supplier, to a commercially astute product orientation.
Secondly, at the end of 1997, the Company sold its Government Technology Division (GTD) which was the Company's former defense operation. It did so because of the continued lackluster performance of the defense industry and continuing losses of the GTD, as well as the drain on management time, efforts, and focus. This now permits the Company to concentrate on its core manufacturing execution system business and other medical field related endeavors such as uPACS (Ultrasound Picture Archiving & Communications System), a methodology for digitizing, recording, and permanently storing ultrasound images on CD-ROMs.
Third, the Company capitalized itself by raising approximately $19,000,000 in an offering of preferred convertible stock. This stock sale, completed in December 1997, will fund the Company's ongoing developmental and operational efforts. Its March 1, 1998 cash position of approximately $13 million breaks down to an approximate cash position per share of $1.65.
The Company also changed accounting firms from Deloitte & Touche LLP to Price Waterhouse LLP in an effort to align itself with a firm more closely identified and associated with its target markets.
Perhaps the most pivotal and noteworthy achievement was the Company's acquisition of the assets of Consilium Inc.'s Healthcare and Process business unit. This effectively eliminated one of Base Ten's few competitors in the marketplace while giving Base Ten, whose own manufacturing system operates on the Windows NT platform, another platform upon which to operate, as Consilium's FlowStream product is a UNIX based system, this in turn provides a broader application appeal for the Company's products. The acquisition has given the Company forty additional people who are trained, knowledgeable, and experienced in the manufacturing execution system field worldwide. Furthermore, this business unit has also given the Company fourteen additional validated manufacturing sites with an estimated annual revenue base of $7 million.
It also appears that the market has lost sight of the fact that the Company is in a development stage cultivating an emerging market, the pharmaceutical manufacturing segment, and not a mature developed company, as would be normally indicated purely by its age. The significance of this realization is that the market appears to be valuing the Company based upon a revenue and profitability performance standard that might be appropriate for a thirty-two year old company rather than a development stage company in an emerging market. We believe that a more appropriate current valuation would recognize the potential of the Company based upon what it realistically could accomplish all things taken into consideration a view that we believe would yield a much higher current valuation than currently is demonstrated by the current market capitalization.
We anticipate that first quarter 1998 revenues will show only a modest increase, but that second and third quarter revenues will show significantly greater absolute dollar increases, although we do not expect 1998 to be a profitable year for the Company. Nonetheless, we do expect that 1999 will show the first signs of profitability for the Company as it takes what can be characterized as a strong toehold in the marketplace to what should then be characterized as a strong foothold.
In conclusion, with the installation of a more aggressive and insightful management team at Base Ten, the acquisition from Consilium of their FlowStream resources, the partnering agreements that are in place, the existing customer base of the Company that includes some of the biggest names in the pharmaceutical industry, the sale of the Government Technology Division which now allows the Company to focus on its core business, and what we view as the significant under-valuation of the Company's stock due to the application of inappropriate valuation criteria, we strongly feel that Base Ten Systems, Inc. Class A common stock is an outstanding buy. |
