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Technology Stocks : Intrado -- Ignore unavailable to you. Want to Upgrade?

To: Dave who wrote (7)	1/13/2002 8:49:43 AM
From: Dave	Read Replies (1) \| Respond to of 17

All, From Kiplinger's Finance Magazine... kiplinger.com Success is Just a 911 Call Away By Courtney McGrath With the law on its side, Intrado is set to ring up profits. You're involved in a hit-and-run accident on a winding country road. You're unhurt but shaken. You reach for your cell phone to call the police, not sure how they'll find you. In a few years, that won't be a worry. The Federal Communications Commission has ordered all wireless companies to devise a way to pinpoint a caller's location. Carriers will spend hundreds of millions of dollars to comply, and data manager Intrado (TRDO) will collect a large cut of the cash. The company already manages 90% of the U.S.'s wired 911 system, ensuring that each call goes to the appropriate public-safety agency. "We work in the background," says co-founder and CEO George Heinrichs. "People don't think about what we do in their everyday lives." Kevin Landis, manager of Firsthand Technology Value fund, calls Intrado as sure a bet as investors can find. "The law says the companies must have this capability, and these guys have already demonstrated that they are good at providing these services to wired telephone companies." Intrado's cellular competition is slim; the company has 50% of the country's wireless 911 business sewn up, too. Turning profitable The immediate outlook for the company is striking. Third-quarter sales of $21 million were up 83% over the same period last year. Intrado still lost 15 cents per share, but that was 7 cents less than expected. Following that trend, Intrado is expected to earn 76 cents a share in 2002, versus a loss of 52 cents a share in 2001. Much of this dramatic turnaround can be traced to existing contracts finally generating revenue. Intrado has agreements to serve 62.3 million wireless numbers, but currently serves less than one-fourth of that count. That proportion should rise sharply in 2002. Intrado is also completing several reinvestment projects that have been suppressing earnings for a few years. New chief financial officer Michael Dingman deserves much of the credit for the improvements. When Dingman arrived in September 2000, he cut stalled research-and-development projects and put greater emphasis on speeding up others. CEO Heinrichs "is very involved in the safety industry," says analyst Joe Noel of Pacific Growth Equities. "I compare his calling to that of a priest, firefighter or nurse. But the financial house was not in order." Shortly after Dingman's arrival, the stock began a steady climb from $4 to a high of $33 before pulling back recently to $29. At nine times book value and six times sales, shares are not overpriced if you consider Intrado's full line of services, analysts say. For example, Intrado's Emergency Warning and Evacuation system (EWE) allows public-safety agencies to broadcast a warning by phone in the event a natural disaster or civil unrest is imminent. EWE serves just 2.3 million numbers now, but interest in the service has increased significantly since September 11. EWE revenues should total $3 million in 2002, and are expected to increase 150% annually over the next two years. Analysts figure such services will help maintain annual earnings growth of 30% or more for the next few years. National database Intrado's strongest prospect is a possible contract to build and maintain a national phone-number database, which would improve long-distance billing. It's not a done deal, but Intrado has no serious competitors, and analysts say that the lack of a database costs carriers so much -- an estimated $1 billion every year -- that they can't afford to shelve the project. Intrado may also enter the consumer market. Products that would tie in to car-navigation systems and 411 directories are being considered. "We think the safety market is huge," Heinrichs says. "But we think the commercial market is even bigger. In terms of opportunity to expand, I think we've got a blank sheet of paper." Reporter: Erin Burt