milesofstyles, thanks for all of your research on ELGT. Just got done with my research on CADE....for now. I would like to share that with everyone.
Miles, you do great work. I'm going to go back and get all of the links that you provided, put them on one page and catch up to you. Thanks for the great DD.
Sheesh Miles, you do great work.
I have a lot more work to do on Cade. I need to speak to the Co. and discuss some recent news releases from companies that they do business with, but here's my report, and thanks to Joe for his help:
Cade Industries is a manufacturer of high technology advanced material products for the worldwide aerospace industry. The Company provides a broad product line that
includes original equipment engine and airframe components, ground based engine test
equipment and specialized overhaul and repair of advanced materials used in engine and airframe components for commercial and military systems.
Investment factors that make Cade a compelling buy include:
* Improved profit margins in yearly same quarter comparisons since 1993.
* The company expects 1998 earnings to rise 60 percent, on a 50 percent gain in revenues.
* New orders are backed by long term agreements, best exemplified by the $26.2 million, 10 year long-term agreement with Pratt & Whitney Canada.
* Cade expects to double sales at their overhaul facilities due to receiving a license from the Civil Aviation Authority of China as well as European certification and increased demand.
* Growing penetration of international markets. Cade expects to increase their international revenues from 21 percent of 1997 to 30 to 40 percent in 1998.
* Expanded engine testing capabilities with the recent acquisiton of Cenco.
* We like CADE's recent expansion into thrust reversal service. This is a big ticket, high margin, heavy maintenance area.
* Increased O.E.M. outsourcing, increased use of composite parts to replace metals, supplier
consolidation and introduction of new services has resulted Cade's backlog steadily rising to a recently reported $84.1 million, while the Company has steadily increased production. Cade's growing overhaul and repair business is not included in the reported backlog due to short lead in time in that segment.
* Worldwide demand for new aircraft and increased demand for aircraft parts and overhaul services.
* Potential Airbus relationship.
* Cade recently contracted the firm of Porter, LeVat and Rose in order to attract analyst coverage and institutional investing.
The aircraft industry is in the midst of a strong cycle, best described by a headline last August,
reporting the Boeing, McDonnell Douglas merger; "RAMPING UP TO RECORD PRODUCTION RATES." Cade has been directly benefitting from the industry upturn and the increased demand for the use of advanced composite materials. Composite materials are significant contributors to the overall performance of an aircraft because of their high strength, light weight, corrosion resistance and they offer lower costs through integrated assemblies which reduce part count.
Cade serves four major market segments, and this diversification has positioned Cade to grow the Company's business within the aerospace industry. The core product's sales are divided as follows:
* Gas Turbine Engine Components include engine fan cases, inlets, acoustical liners, fairings,
auxiliary power unit enclosures and engine cases, accounting for 32.1% of sales in 1997.
* Airframe Components include control surface components, access doors, wing tips and
interior structures for commercial and military applications accounting for 21.8% of sales in 1997.
* Jet Engine Test Equipment - Cade currently supplies about 70% of the world market for test
nacelles-used to create test conditions that duplicate or exceed actual flight conditions. This product group was responsible for 23.7% of sales in 1997.
* Overhaul and Repair - Engine and airframe components is Cade's newest and most rapidly growing business area. This product group was 22.3% of sales in 1997. Cade's overhaul and repair facilities are licensed by the Federal Aviation Administration, the European Joint Airworthiness Authority, and the Civil Aviation Authority of China.
Cade's annual growth rate has averaged 35% since 1994. Profit margins have improved consistently in yearly same quarter comparisons since 1993. Margin improvement is being accomplished through improved machinery, employee training, re-engineering and most importantly, an increase in sales. The increase in production volume alone increases the profitability.
1997 revenues increased 60% and earnings were up 122% to $0.11 per share, compared to $0.05 in 1996. Order backlog was recently reported at $84.1 million. Cade's average revenue growth rate is projected to at least continue, if not improve. At its recent annual meeting the company announced expectations that 1998 earnings will rise 60 percent, on a 50 percent gain in revenues. The Company's growth should come in all four of the Company's core product areas. The largest percentage increase is expected to occur in overhaul and repair of engine components where Cade has targeted to double its sales at its Lansing based facility in this high margin segment.
Cade's major customers is an impressive list including most of the industry giants such General Electric, Pratt & Whitney, Boeing/McDonnell Douglas, Bell Helicopter, Bombadier, the U.S. Government, Allied Signal, Southwest Airlines, Delta Airlines, China Air, Lufthansa, Eva Airways, Taiwan Aircraft Maintenance and Engineering Corp.,and Rolls Royce. Cade has been seeking to establish a relationship with Airbus. We believe that Cade's chairman, John Sandford, with his relationship to Rolls Royce and the European community, will be instumental in securing Cade
future contracts with Airbus.
Boeing is the world's largest airplane manufacturer. G.E. is the world's largest producer of jet engines for commercial and military aircraft.Pratt & Whitney Canada holds 32% of the world market for small and medium-size gas turbine engines used in general aviation. Bombardier holds 50% of the business aircraft market and also has 42% of the regional aircraft market. Bell Helicopter holds 50% of the world market for medium-sized helicopters.
Cade recently hired the firm of Porter, LeVat and Roses in an effort to obtain the market recognition that it deserves. PLR's strategy is to first attract market research and then to pursue
institutional investors. PLR is a large, well regarded New York City firm.
Links for more information
Cade's web site :
cade-industries.com
Porter, LeVat and Roses' web site :
plrinvest.com
BOBBLEUNC's INCREDIBLE JOURNEY:
techstocks.com
techstocks.com |
