Subj: Our new pick: GBIT
Date: 98-08-03 09:41:16 EDT
From: analyst_group@goplay.com (Trader's Paradise)
Reply-to: analyst_group@goplay.com (Trader's Paradise)
*******Trader's Paradise******** Volume 1, No. 6, August 3, 1998
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Global Intellicom, Inc. (Nasdaq: GBIT)
Recent Price: $1.312/share
Daily Average Volume: 200K
97 EPS: -$1.29/share (loss)
97 PE: NM
Estimated 1998 EPS:$0.35-0.40/share
Forward PE: 3.75
Industry Average PE: 39.11
Book value: $0.77/share
Price/Book: 1.7
Industry Average of Price/Book: 5.30
Div/Shr: None
Yield: None
52-Week Range: $0.625-3.00/share
Outstanding Shares: 7.98 M
Public Float: 4.55 M
Market Cap: $ 10.5 M
1997 Revenues: $51.235 M
Estimated 1998 Revenues: $60-70 M
Net Profit Margin: 6 %
Institutions Holding: 12%
Management Holding: 31%
Shorting Position: 1.2 M (last 12 months)
BUSINESS SUMMARY AND CORPORATION BACKGROUND: Global Intellicom, Inc. (together with its subsidiaries, "GBIT" or the "Company") provides system integration and information technology services and assembles and supplies build-to-suit computer equipment for a wide range of customers, including corporate clients, governmental entities, institutions,
professional users and resellers. GBIT has state of the art network cabling and computer integration capabilities located in New York City, Pittsburgh and Exton, PA, Indianapolis, IN, Washington, D.C. metro area and Orlando/Tampa, FL. GBIT also functions as a value added manufacturer an reseller of network services and PCs. GBIT holds reseller licenses with such companies as Microsoft, IBM, Sun Microsystems, NEC, NCR Worldwide, Compaq and Hewlett-Packard. Its clients include Lockheed Martin, the Department of Defense, Loral Systems, EDS and the General Services Administration. Through the aggregate use of Global's resources, its mission is to be the information technology resource for its customers and to offer a "Total System'' Solution at competitive rates.
The Company's subsidiaries and operations have been organized into two distinct groups, a systems integration division consolidated under the Company's Vircom Technologies Group, Inc. subsidiary ("Vircom TG"), and a production division which assembles and markets custom-built servers, workstations and personal computers. Vircom TG is a value-added reseller which provides a range of information technology consulting services, including cabling, systems integration, internal and external linking of networks, installation of new applications, assistance with non-compatible operating systems and architectures, and design and support services for enterprise-wide client server computer systems. The Company's production division assembles, supplies and supports state-of-the-art, custom-built network products, including servers, workstations and personal computers, and markets them primarily to U.S. government, state educational and school system customers and to value-added reseller!
s.
RECENT DEVELOPMENTS AND ANALYSIS: GBIT is a world class company that creates solutions for business communications through a combination of software, hardware, network integration, and wireless technology. GBIT's growth rate this year is expected to exceed 40% in some divisions. The total market size is estimated around $1.1 trillion.
Vircom Technologies Group, Inc., through its recently integrated sister company, National Computer Resources, Inc. (NCR), is a value added reseller and systems integrator that provides horizontal and vertical software solutions, low voltage cabling and world class consulting on networks integration services. They also provide design and fulfillment services on custom designed systems and networks to meet every clients needs. The company owns proprietary software and maintains strategic reseller relationships with industry leaders such as Hewlett Packard, NCR and Sun Microsystems. Vircom TG has recently opened a department to handle the Year 2000 issue for its clients and they also provide temporary and permanent staffing fulfillment.
Global-InSync, Inc. is a build-to-suit assembler of servers, workstations and personal computers. Global-InSync distributes its product and its associated repair and warranty services primarily through value added resellers and system integrators which, in turn, sell computer hardware and IT services to commercial enterprises and federal, state and local government agencies.
On July 31, 1998, GBIT announced earnings $0.09 per share for the second quarter and $0.15 per share for the six months ended June 30, 1998. For the quarter ended June 30, 1998, the company reported sales of $11,992,523. Net income for the quarter was $718,950 or $0.09 per common share. For the six months ended June 30, 1998, sales totaled $21,320,548 with a net income of $1,255,117 or $0.15 per common share. During this past year, GBIT has discontinued non-productive operation, reduced its total payroll by over 40%, and reduced other costs for 1998. Through an outsourcing contract, GBIT and its operating subsidiaries have the option to fix their manufacturing costs by subcontracting out their assembly of certain PC workstations and servers. By increasing margins, decreasing debt burden and fixing costs, management believes GBIT should be able to sustain the results of its first and second quarters and continue its rapid growth in 1998. Management expects GBIT will gene!
rate revenues of $100-120 million with earnings $0.75-1.00/share in 1999. The decisions they have made and the steps they have taken during the first half of this year have been part of an overall strategy for profitable growth. Concentration on this strategy has already led the company to increased profitability, and management believe it will fuel GBIT continued growth for a better second half of 1998. Furthermore, second half is the seasonally stronger half for GBIT. We project they will achieve earnings $0.20-25/share for next two quarters in 1998.
We are issuing an aggressive buy on the shares of GBIT based on the experienced management and the burgeoning market for network hardware and software. We have learned that the company has obtained several major contracts and will be announcing them over the course of the summer. With growing earnings, we are looking for a move to $3-4 area in the short term and $6-8 over the next 6-18 months. A small public float (4.55 M shares), large short position (1.2 M shares) and big earnings for next two quarters will propel the stock higher.
Contact:
Global Intellicom, Inc.
747 3rd Ave 17th Fl.
New York, NY 10017
212-750-3772
Robert L. Olson, VP-Fin./CFO
or PR Firms:
Liberty Capital Group, Inc.
814 Lakeway Dr. Ste. 262
Bellingham, WA 98226
360-676-8072
Todd Sanders or Tom Raack
Jonathan Destler
Destler Services, Inc.
212-734-2000
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