Here is the source of the Pump.............
******Undervalued Dog******, Volume 3, No 26, 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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