. THE NAPEAGUE LETTER
Wednesday, May 6, 1998
Editor: Bob Davis napeague.com
Abatix Environmental (NASDAQ:ABIX) First Quarter Results
The ABIX turnaround continues. After the close of the market today, the
Company released its first quarter financial results, announcing that
"The net earnings for the first quarter of 1998 increased 62% from 1997
first quarter net earnings."
First Qtr.
1998 1997 1997 1996 1995 1994 1993
----- ----- ------ ------ ------ ------ ------
Net Sales 8,675 8,470 34,955 33,066 27,632 25,982 19,085
% Increase 2.4% 6% 20% 6% 36%
Net Income 187 116 841 756 813 217 139
% Increase 61% 11% -7% 275% 56%
Earnings per Share $0.10 $0.06 $ 0.43 $ 0.35 $ 0.36 $ 0.25 $ 0.12
% Increase 67% 24% -4% 46% 103%
The Press Release went on to explain, "This increase primarily resulted
from increased sales volume, improved pricing and lower interest expense."
The press release gives an encouraging view of Abatix's future performance:
Mr. Terry W. Shaver, President, stated "The earnings increase is a result
of efforts from all Abatix personnel. The continued focus of our sales
force on pricing, while increasing our customer base, and the efforts
to better manage assets and control costs have been the major factors
in our improved results. Continued efforts on these items should provide
quarterly and annual results that exceed 1997 results. As previously
stated, our primary focus for 1998 was to increase revenues. Several
marketing programs were implemented late in the first quarter of 1998
and are expected to increase Abatix's visibility and name recognition
in the industrial safety market. These new marketing programs will provide
additional tools to improve our sales force's efficiency and success,
while broadening the geographic area covered by Abatix. We are currently
designing a new and improved internet site which will also increase
Abatix's visibility. In addition to product information for current and
potential customers, our internet site will also provide more effective
means of communicating financial information with stockholders and the
investment community."
Since late July 1997, ABIX has moved from below $2.00 to close on Wednesday,
May 6, 1998 at $4.25, up $0.25 for the day. Technically, both momentum-based
and volume-based indicators appear to signal that this trend will continue.
Frankly, I expect that today's announcement may generate additional buying
interest in the near future.
Although I would like to review the Company's 10-Q Report for the quarter
before updating 1998 projections or theoretical valuations, it should be
noted that my latest projection for the 1998 year calls for earnings per
share of $0.50, and that, at $0.47 per share, current trailing 12 months
earnings per share are just $0.03 below that target. For this reason, I
feel relatively confident that ABIX can justify a theoretical market price
well in excess of $8.00 per share.
As soon as I am able to review the Company's quarterly 10-Q Report, which
should be filed with the Securities & Exchange Commission within the next
week or so, I will update the Summary and the in-depth Analysis which can
be found on the Napeague web site. I encourage you to read the entire
Analysis as well as the Company's investor relations information and its
reports to the Securities & Exchange Commission prior to making any decision
to invest in this or any other Company.
NOTICE
This analysis is based on publicly-available information, and is in no way
warranted by me as to accuracy or completeness. I do not guarantee to
advise you as to any change in this information. I currently am a
stockholder in this Company as the result of purchasing its stock on the
open market,and may from time to time purchase or sell this Company's
securities on the open market. I otherwise have no affiliation with this
Company, and I am not compensated by it in any way whatsoever. |
