SERVICE SECTOR / Arcis Corporation
NOTICE: this information was prepared by an investors relation group of
which Arcis is a client.
RKS/TSE
June 16, 1998
Arcis Exceeds Projections in its First Year
-Undervalued to Peer Group
Today Arcis Corporation (RKS/TSE) reported strong financial results for
its first full year as a public company and exceeded earnings projections
by 33%. After projecting $0.06 per share on a fully diluted basis, Arcis
reported $0.08 for Fiscal 1998 (March 31) and $0.10 EPS for basic issued
number of shares. Revenues for the year were $35 million, 75% higher than
the $20 million originally projected. The Company reported strong financial
results across the board.
Taking into account current conditions in the oil and gas industry the
immediate future for Arcis still looks bright. Profitability is expected to
grow in F1999, as costs associated with acquisitions in F1998 were one-time
expenditures. While streamlining operations to realize greater profit
margins, management also believes the current commodity price environment
will create additional growth opportunities for expanding the Company's
seismic data library.
Due to a hesitant market Arcis is trading at a very low multiple of about 5
to 6 times EPS, which presents an extremely undervalued opportunity
relative to peers. While competitors are receiving multiples from 11 to 20
times EPS, Arcis is slipping through the cracks. According to recent buy
recommendations from Brawley Cathers and Acumen Capital Partners, an 8x to
10x multiple is fair pricing for Arcis given current conditions. Based on
F1998 earnings and an 8x to 10x multiple, Arcis should be trading between
$0.56 and $0.80, a significant increase over its current price of $0.45.
Arcis Corporation is a uniquely integrated geophysical services company,
which processes, archives, brokers and manages seismic data as well as
provides five field acquisition crews to shoot exclusive and non-exclusive
seismic data. It is Arcis' objective to create a large proprietary data
library in the next few years.
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