Notable trade of the day: Alanco (ALAN:NASD)
Total Outstanding shares: 5.34M, Float: 4.5M
Main Catalysts for coverage: Alanco, formerly a company specialized in
pollution control products, agreed to acquired Arraid Inc., a private
company providing data storage solutions for mid-range and mainframe
systems, on Oct 27, 1999. The main catch here is that Arraid has been
developing products in SAN for quite some time and is prepared to launch
the SAN product lines on November 11, one week from now.
Business and Technology: Until next Thursday, Arraid is manufacturer
and distributor of disk arrays. Formed in 1993. But the launch of the
SAN product lines on Nov 11 will mark a pivotal shift of corporate
strategic focus. Since Arraid has already established alliances with
many leading SAN companies (Gadzoox, Crossroads, Exabyte, Legato,
Hitachi and others), I would expect the new product lines robust and
comprehensive. According to Hoovers, Arraid's current annual revenues
are between 2 to 5 millions; Arraid's CEO Frank B. Meijers has stated in
recent announcements that he expects the projected revenues in the next
year to reach 10M, representing anywhere between a 100% to 400% revenue
growth rate (I will call Arraid today to gather the actual revenues for
this year since the 2 – 5 millions listed in Hoover is such a wide
range)
hoovers.com
Client list: Arraid has a very impressive client list, especially for an
obscure, privately held company:
from top government agencies NASA, NATO to major corporations such as
MCI/Worldcom.
arraidsns.com
Alliances: As mentioned above, Arraid has existing alliances with
several key SAN companies, including Gadzoox, Crossroads, Exabyte,
Legato, Hitachi, Qlogic and others.
arraidsns.com
Risk Factors: The several press releases form ALAN and Arraid did not go
into any specific technical details of the SAN initiative. Moreover,
according to the press release, Alanco acquired Arraid in an all-stock
transaction consisting of an initial payment of 800,000 Alanco common
shares, with an additional
share payment upon Arraid achieving its business plan objectives for the
year period beginning Nov. 1, 1999. Almost sounds too good to be true.
But then, from another angle, Arraid could have been perfectly confident
that the stock price of the new company will soar many folds in the
coming weeks. As well, once they demonstrate a sound business plan with
viable revenues and earnings growth, the company can always spin off
Arraid as an IPO in the future to receive new cash infusion.
ALAN has run up considerably since the original acquisition announcement
on Oct 27, but I believe we have a long way to go yet, given the strong
market conditions, the heightened potential of the new company the vast
anticipation until Nov 11, and the very small market cap at the moment
(factoring in the 800000 shares in acquisition, ALAN has only 6.14M in
total outstanding shares).
Analysis and expectations: Arraid management has demonstrated the proven
ability to attract and retain as clients many of the most prominent
companies and government agencies in the world. The company's alliances
with the leading SAN companies appear to clearly set the stage for a
successful launch of the SAN initiatives. At the close of Nov 3, the
stock was trading just a little below 3, a great bargain for the
discerning speculators. An especially attractive point is that Arraid
pre-releases the Nov 11 PR launch of the SAN initiatives on its website,
but will not release that PR for general distribution (BW, ComDex, etc.)
until one week from now.
arraidsns.com
(COMTEX) B: Alanco Announces Acquisition of Storage Area Network -
SA
B: Alanco Announces Acquisition of Storage Area Network - SAN - Company,
Arraid
Inc.; Initial Step in Implementing New Business Strategy
SCOTTSDALE, Ariz., Oct 27, 1999 (BUSINESS WIRE) -- Alanco
Environmental Resources Corp. (NASDAQ: ALAN) Wednesday announced the
acquisition of Arraid Inc. (Arraid), located in Phoenix.
Established in 1993, Arraid is a leader in data storage solutions for
mid-range and mainframe computer systems. Arraid has achieved
world-wide recognition as a technology innovator providing subsystems
and software upgrade solutions for legacy large-scale computer systems,
with an existing installed base of several thousand systems at numerous
Fortune 500 companies, as well as U.S. and foreign government agencies
and military organizations.
The company has been selected as one of Arizona's fastest growing high
tech companies for the past three years. Partnered with advanced
technology innovators, Gadzoox, Crossroads, Exabyte, Legato and
Hitachi, Arraid is focusing on the fastest growing segment of the
computer industry, storage area networks (SAN). SANs are multi-vendor,
ultra high speed, fibre-based architectures that revolutionize the way
applications and users share data.
SAN's growth is Internet-correlated, as the need for high-speed
"real-time" electronic data communications in E-commerce applications
is literally exploding. International Data Corp. comments that "the
growth rate of Internet-enabled data storage is likely to be as great
as that of the Internet itself."
The SAN products and network services market is projected for
exponential annual growth by the Gartner Group, increasing from 1999
worldwide sales of approximately $800 million to over $12 billion in
2002.
Alanco acquired Arraid in an all-stock transaction consisting of an
initial payment of 800,000 Alanco common shares, with an additional
share payment upon Arraid achieving its business plan objectives for
the year period beginning Nov. 1, 1999.
Arraid President, Frank B. Meijers, is highly enthusiastic relative to
the new Alanco association. "This will allow us to accelerate our SAN
market development with a formal roll-out program in November, 1999. We
are projecting rapid sales growth to approximately $12 million in sales
in the first full year of our business plan and increasing to over $40
million by the third year."
Arraid co-founder, John C. Dahl, added, "In addition to rapid growth in
general corporate data storage, Internet use has created a tremendous
new demand for data storage and access, and we are addressing both
areas in our business development strategy. We believe that our
extensive technical expertise and strong customer base will provide the
means, along with Alanco support, to realize our goals."
Alanco Chairman and Chief Executive Officer, Robert R. Kauffman,
stated, "The Arraid acquisition is the initial step of our new
corporate strategy to redeploy our substantial assets towards high
growth investment opportunities, specifically targeting the information
technology industry.
"Arraid is well-positioned to effectively compete in the exciting SAN
market and, we believe, will develop as a very high growth, profitable
new business for Alanco."
Kauffman also noted that, reflecting the company's new strategy, the
corporate name will be changed, subject to shareholder approval at the
Nov. 5, 1999 Annual Shareholders' Meeting, to "Alanco Technologies,
Inc."
Alanco Environmental Resources Corp. is an Arizona corporation
headquartered in Scottsdale. Alanco is traded on the NASDAQ stock
market under the symbol ALAN.
This press release contains statements that may be considered
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. Such forward-looking statements are
inherently uncertain, and the actual results may differ from
management's expectations.
Copyright (C) 1999 Business Wire. All rights reserved.
Distributed via COMTEX.
-0-
CONTACT: Alanco Shareholder Relations, 480/607-1010
or
Arraid Inc.
www.arraid.com
www.arraidsns.com
WEB PAGE: businesswire.com
GEOGRAPHY: ARIZONA
INDUSTRY CODE: COMPUTERS/ELECTRONICS
INTERNET
ENVIRONMENT
Today's News On The Net - Business Wire's full file on the Internet
with Hyperlinks to your home page.
*** end of story ***
Alanco Enviro. Res. Corp. Ticker: ALAN Page 1 of 10
Complete Financials: June 1999 Exchange NASD
FY END JUN
ISSUE DATA (10/29/99) PER SHARE DATA RATIOS
Price $ 1.41 EPS (TTM) $ 0.02 P/E (TTM) 61.13
52W High $ 2.25 Div. Rate $ 0.00 Yield 0.00 %
52W Low $ 0.41 Book Value $ 1.44 Price/Book 0.97
Shrs Out 5.34 Mil Cash $ 0.13 ROE (TTM) 1.65 %
Float 4.50 Mil Rev (TTM) $ 1.33 ROA (TTM) 1.32 %
Mon. Vol 0.34 Mil Curr. Ratio 3.76
Beta 0.79 LT Dbt/Eqty 0.00
BRIEF: ALAN is engaged in the design, production, marketing
and distribution of pollution control products, and
restaurant equipment/food marketing and distribution. For
the FY ended 6/99, net sales fell 35% to $7.1M. Net income
from cont. ops. totaled $121K vs. a loss of $4.9M. Results
reflect a decrease in Fry Guy food service revenue due to
the ending of the Wal-Mart contract, offset by the absence
of $5.3M in impairment of intangibles & equipment charges.
arraidsns.com
alliances: Gadzoox, Qlogic, CrossRoads, Legato, Hitachi
arraidsns.com
client list: from top government agencies NASA, NATO to major
corporations such as MCI/Worldcom – very impressive
arraidsns.com
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