Don, an interview with Patrick McGowan, President of Wolf Industries, is posted below. I thought you might find it interesting...
I can be reached at 1-888-253-6657 with any questions, or comments.
Amanda Marley-Clarke
Investor Relations
Wolf Industries (OTCBB:WLFN)
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INTERNATIONAL STOCK NETWORK brings you the latest
news on companies it feels will offer investors upside potential.
(http://www.intlstocknetwork.com) July 18, 1998 (Released for the
opening of trading on July 20) Email the Editor:
George@intlstocknetwork.com
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Copyright (c)
1998 by The International Stock Network, Inc. All Rights Reserved.
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Three weeks ago
we brought you information about WOLF INDUSTRIES, INC. (OTCBB:WLFN)
Following is an interview between International Stock Network and the
President of Wolf Industries, Inc., Pat McGowan that occurred on
July 15, 1998.
1. Good morning Pat.
Good morning George, it's a pleasure to talk to you.
2. We've asked you in today to discuss Wolf Industries and update us on developments.
I look forward to the opportunity George to discuss the company, please feel
free to ask me any question.
3. Fair enough Pat, could you please tell us a little bit about Wolf Industries and
more specifically the Dental Color Analyzer.
Wolf Industries is a company that has acquired the worldwide marketing and manufacturing
rights to a dental device know as the Dental Color Analyzer. The DCA
quite simply is a product that has been designed to solve a problem
that has been existing in the dental profession for years. What it
does is scientifically effectively and quickly ma hes shades of
restorative dental material to that of the patients native tooth. Up
to this point in time this determination has been made visually and
as a result has been subject to a substantial number of problems.
These include the dentist own vision imitations, as the ability to
differentiate shades deteriorates dramatically as we age. Secondly,
differing lighting conditions can't produce a phenomena known as
metamerism under which a shade may look quite different under
incandescent versus natural s light. And finally any reflections
which may be existent in the dentist office that would mitigate the
proper selection of shade. The DCA solves all of these problems as
it operates on a basis independent of external factors. Therefore
what is previous being a subjective measurement now is done on an
objective basis.
4. Pat, maybe you can touch on the size of what the market is to the product?
The market in North America for dental equipment and supplies on an annual basis
is in excess of $40 billion dollars. With regard to our specific
niche there are in excess of 170,000 dentists in North America and
over 15,000 laboratories. Our projections as a result will give us a
market potential in excess of $750 million dollars North America
alone. If these numbers are extrapolated on a worldwide basis that
would translate to between a $2 « to 3 billion dollar total market
potential.
5. How do the dentists react to your product, Pat?
I can say this after speaking with just over 1,000 dentists and dental labs -- we have
not received one negative comment; most comments indicate the
analyzer is needed and wanted as quickly as we can make it available.
At the recent American Academy of Cosmetic Dentistry Convention in
Vancouver, Canada in the latter part of June the respon was
overwhelming. The comments reinforced our original contention that
this is a major problem in the dental industry that takes up an
inordinate amount of the dentist' time and the errors result in
substantial reworks and significant patient dissatisfa ion. I must
reiterate the Dental Color Analyzer will solve this long standing
problem. For quotes please refer to
wolfindustries.com
6. Can you tell me something about your management structure.
We feel we have assembled a world class group of individuals to assist us in the
commercialization of this product. Our Board of Directors consists
of Dr. David Gane, DDS, who has been involved in the cosmetic dental
industry for a number of years and has gained a worldwide reputation
as an expert in the field. David has been a cont buting author to
numerous dental magazines, has been a guest lecturer around North
America dealing with this particular area of dentistry and is the
co-founder of a company which had developed the dental imaging system
which is used extensively in North A rica. In addition, we have Mr.
Ken Liebscher, with over 24 years of experience in dental technology,
and heading our research group is Dr. Andrew Rawicz who has a Ph.D.
in physics. Assisting is Dr. Rawicz, Ph.D., and Dr. Ivan Melnyk.
7. Can you give us some idea as to what your projected sales are for the first year?
We anticipate product introduction to occur in the fall of 1998 and have considerably
estimated sales of 650 units which will yield revenues of
$1,625,000. Gross margin after royalty is anticipated at a little
over $1,100,000 with net income projections around $480,000. One of
the major benefits of the analyzer is that the major cost co onent is
the intellectual property aspect with actual component and labor cost
being relatively low. As a result gross margins in excess of 70% can
be realistically expected. Our first full year of operations (1999)
call for sales of 11,000 units repres ting less than 6% of market
share yielding gross revenues of $27,750,000 at a gross margin
slightly in excess of $22,000,000. Net profits before tax are
projected in excess of $23,000,000. The year 2000 show projections
as follows: gross revenue of $45 00,000, gross margin after royalty
$36,500,000 and net income before taxes $39,900,000. In the year
2001 and 2002 the projections are as follows: gross revenue of
$49,500,000 and $54,500,000, gross margin after royalty $40,250,000
and $44,300,000, net i ome of $43,900,000 and $48,400,000.
8. What are your plans for the international market?
While Wolf is currently targeting dentists in North America we expect worldwide
markets to open up in the first year. Our plans call for intrusion
into the South America marketing beginning in January 1999. Entry
into the European market is anticipated to begin at the end of the
first quarter of 1999 and Asia at the beginning of the hird quarter
of 1999.
9. What distribution methods are you contemplating?
Because our market in North America is very specific i.e. dentists and dental
laboratories we contemplate using existing distribution channels
that being dental dealers and distributors. To that end we have been
approached by several major distribution companies and are currently
negotiating with them. With regard to the interna onal market our
approach is to develop strategic alliances with existing companies
which are familiar with the market.
10. Now Pat we've looked at the public structure of Wolf Industries, I've
noticed that Wolf Industries market valuation has fluctuated about
50% in both directions. Can you explain why?
This is primarily because it is unknown to the investment community and is still a
turnaround situation - investors that came in prior to the
restructuring may not be aware of the developments of the past 5
months and may be taking losses. Once Wolf begins to communicate
regularly with the investment community and moves closer towards
NASDAQ listing, the stock should become fairly valued. Now we've
seemed to hit a very solid support level at the .40 range so things
have begun to stabilize. So we've under gone our growing pains. For
those investors who are looking for a long term inve ment strategy
with this company they should continue to see positive share
appreciation as the company evolves.
11. Pat just this week we were made aware that in your circular for
your shareholders meeting on July 24, 1998 you have proposed a 3 to
1 consolidation of your stock. It has been my experience that the
perception of a consolidation has causes a decreas in market value in
the company rather than an increase because people are receiving less
shares than what they are buying. What was your rational for this
decision?
Talking to a number of small boutique brokerage firms we've had discussions
that we could receive a financing between 5 - 6 million dollars. Our
eminent goal is for a listing on the NASDAQ small cap market. A lot
of US brokers and institutional buyers who would like to follow and
participate in the stock can not do so for under .00 a share. With
our earning projections for our first year in 1999 in excess of
$23,000,000 and with our financing in place we have between $5.5 -
6,000,000 shares outstanding fully diluted. I ask you George what
kind of PE ratio would you attach to a owth industry such as this,
would you give it a 5 or 6 times? I look out there today at other
dental/medical technology companies that have trading PE ratios
between 10 and 40 times. With our projected earnings at $23,000,000
with 6-7,000,000 shares out r earnings could be anywhere from $2.00
per share to a high of $4.00 per share depending how it works out. I
see this as a very positive move and also the management and
financing group has somewhere in the neighborhood of 2,000,000 shares
of the consolid ed company. So the decision was made to suffer any
short term consequences to reap long term gains.
12. My only other concern with your company is you may only be a one
product company with the DCA and this could also be high risk because
what happens if you get competition or new technology?
I have a two fold answer for you George, I think competition is healthy and I
know there are other companies attempting to develop a similar
product. It is important for shareholders to understand that this
technology has applications in other areas not the least of which is
hair color determination. The corporation has embarked o a strategic
sales \marketing and acquisition strategy. We have identified several
companies that we can acquire in the same industry we are in. As we
continue to grow we will What is really exciting George is that with
the exclusivity with the DCA and it great market potential companies
in the dental industry are anxious to be affiliated with us because
of our unique position in the marketplace.
13. Do you have any final comments Pat?
Yes, George I do. I think it's important that your clients keep their focus on
the important issues. The fact is that we have a patented pending
product which represents a major technical breakthrough that solves a
long standing problem of precisely making dental shade
determinations. Everyone of us knows someone who has a bridge hat
doesn't match. The DCA will solve this problem in a specific market
i.e. dentists and dental labs of which there is no direct competition
and is able to enter a niche market of tremendous potential that
yields high profits. In addition management has ommitted and
dedicated significant investment dollars time and effort to position
Wolf Industries as a market leader. With these factors in mind the
upside is incredible.
Below we have provided the link to further information about WOLF:
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intlstocknetwork.com
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For further information on Wolf, please visit the updated website at
wolfindustries.com
Investor Relations may be reached by contacting: 800-545-7214
or by e-mail @ invest@uniserve.com
Note to Editors: Certain statements in this news release are "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act of
1995. Such forward-looking statements made by the company involve
known and unknown risks, uncertainties and other factors that may
cause the actual results, performance or achievements expressed or
implied by such forward-looking statements.
Such factors include, but are not limited to, risks associated with international operations,
dependence on licenses, governmental regulation, technological
changes, intense competition and dependence on management. Given
these uncertainties, investors are cautioned not to place undue
reliance on such forward-looking statements.
The company disclaims any obligation to forward-looking statements contained
herein to reflect any change in the company's expectation with
regard thereto or any change in events, condition, circumstances, or
assumption underlying such statements.
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For additional information about Wolf or an investor relations package, you can call the Company at:
1-800-545-7214.
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