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Early word is that Zomax Optical Media, a maker of compact discs, digital video discs and other multimedia paraphernalia, will announce a relationship with Microsoft (MSFT) or IBM (IBM). Zomax (ZOMX), a Minneapolis company with a factory in San Jose, Calif., also packages and prints products and acts as a so-called outsource service provider to software publishers, computer manufacturers and other multimedia companies.
Investment professionals say the Microsoft or IBM pact will benefit the company's bottom line. Zomax is profitable -- yet the company in the most recent quarter said it had to outsource some CD production because of increasing demand. That lowered profit margins.
Chief financial officer Jim Flaherty at Zomax told me the company already has a relationship with Microsoft through a pending purchase of the U.S. assets of Kao Infosystems Co. and the Ireland assets of Kao Infosystems Ireland. Flaherty said the transaction has not closed yet.
Kao Infosystems' facilities include a call center in San Ramon, Calif., a CD and DVD manufacturing, packaging and distribution facility in Fremont, Calif. and another facility in Canada. The acquired Irish company includes a call center in Dublin and a diskette duplicating, packaging and distribution facility in Langen, Germany.
The company's stock on Nasdaq sells for about 16, giving Zomax a market cap of $115 million and a price-earnings ratio of about 26.
best of luck to all richard |
