Well, just in case she didn't get enough info from me....check this out.
Posted by: CorvetteMark
In reply to: None Date:6/19/2006 12:10:08 AM
Post #of 1745
Per Creede's request I wrote an synopsis on the company, the highlights of some of their PR's, and broke down a few key numbers to send to Motley Fool's Selena.
Enjoy....
Mark
________________________________________________________________
Dear Selena,
After reading your June 16th article on the risks of investing in penny stocks ,PLNI in particular, I decided to take you up on your invitation to point out another penny stock that I find particularly interesting. Thus, I had sent you an earlier email yesterday betting that the Pink Stock Labwire would be at least a 10 bagger in 2 years! Well to ensure that you gave Labwire (LBWR) an honest chance I wanted to Foolishly walk you through Labwire’s latest financial numbers and their exciting press releases to really show you the insides of Labwire, a Rule Breaker in the making!
Before we go through Labwire’s financial numbers and their latest PR’s announcing contract after contract with some of the top Fortune 500 Companies out there let me first give you a little background on Labwire and it’s CEO, Dexter Morris.
Mr. Morris spent 17 years running a huge drug screening company named Drug Intervention Services of America, or DISA for short, before deciding to start his own drug testing company. Knowing the limits of DISA’s software platform and the enormous bottlenecks it presented he quickly discovered and bought the rights to a new proprietary software program dubbed Labwire by its creator.
The Labwire™ Platform required a capital investment of over one million dollars and is a proprietary, web-based application that creates a virtual employment screening chain streamlining all aspects of the screening process in a secure and cost-efficient solution. The platform provides compliance with DOT (Department of Transportation) and DEA (Drug Enforcement Agency) regulations and adheres to strict Health Insurance Portability and Accountability Act (HIPAA) based protocols. Through industry partnerships, the Company provides security plans and equipment, in addition to canine surveillance programs (drugs/explosives) manageable via the Labwire™ Platform.
Thus Mr. Morris decided to name his company Labwire after the software package because he knew this program would revolutionize this industry. He also understood through past experience that the larger a client he attracted the more revenue Labwire would likely receive. Since he would have to begin with a small staff he made it his mission to focus only on the Fortune 500 companies. Having a few big clients instead of many smaller ones would lead to lower overhead and higher profit margins! Additionally he decided to lease out his proprietary software to smaller drug testing facilities who would go after the smaller customers thus also creating royalty income for Labwire! Next, he set out to quickly fill out the necessary paperwork to get Labwire positioned to bid on government contracts AND HE SUCCESSFULLY LANDED THE LARGEST D.O.T CONTRACT EVER …valued at more than $12 million if all options are exercised!!!
But unlike any other Pink stock out there, Mr. Morris yet again showed his brilliance by waiting till his company was profitable BEFORE taking it public!
HOUSTON, TX – June 8, 2005 – Labwire Inc. (OTC: LBWR), announces that the Company has begun trading under the ticker symbol “LBWR” on the Over–the-Counter market. The Company's Labwire™ Platform is a leading edge information technology solution that gathers, stores, retrieves and manages sensitive security and compliance data primarily for the Oil & Gas and Transportation industries. Labwire's wholly owned subsidiary, Workplace Screening Services, is a provider of comprehensive and secure employment screening management to mid-size and large corporations, specializing in drug testing and background checks.
The Labwire™ Platform required a capital investment of over one million dollars and is a proprietary, web-based application that creates a virtual employment screening chain streamlining all aspects of the screening process in a secure and cost-efficient solution. The platform provides compliance with DOT (Department of Transportation) and DEA (Drug Enforcement Agency) regulations and adheres to strict Health Insurance Portability and Accountability Act (HIPAA) based protocols. Through industry partnerships, the Company provides security plans and equipment, in addition to canine surveillance programs (drugs/explosives) manageable via the Labwire™ Platform.
“We are very excited to become a publicly traded company. Having greater access to capital can assist the Company in ramping up sales and marketing efforts as well as fund potential acquisitions that will add value to Labwire's existing suite of employee screening services,” commented Dexter Morris, President of Labwire Inc. “Our Labwire™ Platform positions the Company to raise industry standards by delivering the highest value and the lowest operational cost per transaction. Additionally, we are pleased to report that the Company achieved its first quarter of profitability in Q1 2005.”
Thus Labwire has been able to keep dilution to a minimum' selling only their 504 shares' BECAUSE the company was already profitable! Keep in mind THIS is a pink stock yet notice how the CEO yet again shows that he values his shareholders!
Now on to the numbers!
During the quarter ended March 31, 2006, Labwire’s revenue increased 134% to $1,057,040, compared to $452,422 for the first quarter of 2005 and although Labwire’s operating expenses also increased from $219,243 in the first quarter of 2005 to $337,779 for the period ended March 31, 2006, this was primarily a result of personnel requirements within the Company's security and surveillance business and as a result of additional legal, accounting, and other professional costs relating to filing and reporting as a public entity. Net income was for the quarter ended March 31, 2006 was a positive $23,979 vs. a -$24,362 for the first quarter of 2005 almost a 200% increase!
But that’s not the only highlights of the financials! Taking a look at the stockholders equity you will see an increase of $507,229 to $612,573 for the quarter ended March 31, 2006, compared to $105,344 for the first quarter of 2005!
There were however, a few things that weren’t as positive at first glance but after a little DD they quickly became less worrisome. For example; Labwire’s A/R for the quarter March 31, 2006 was $1,009,294 compared to a low $385,677 for the first quarter of 2005 an increase of over 160%. However, a little research quickly provides that during the quarter ended March 31, 2006 their first significant amount of K-9 Revenue came in (thus the breakout on the Revenue section) and is primarily attached to one customer who pays a little slow. That portion taken out of the A/R reveals it is in line with a 45-day average, a customary time frame in dealing with Fortune 500 customers. Additionally, this quarter saw a return to a negative operating cash flow amount of –113,304 due primarily to the increase in operating expenses explained above and the resulting decrease of net income for the quarter as well as the increase in A/R coupled with their quick A/P payments. However, as their revenue continues to climb quickly their business model allows many of their expenses to taper off.
The real news is the PR's that have come out since the financials were released!
• April 11, 2006: Labwire Inc. Announces Contract with Pan American Express
The agreement, which contains ``Evergreen' provisions, calls for Labwire to provide its comprehensive employee drug testing and screening services to Pan American Express. The contract with Pan American Express marks the second major commercial trucking company the company has contracted with in the past four months. ``We are aggressively targeting the top 100 providers in the commercial trucking industry due to their huge upside. Based on our vast experience and our cutting edge platform that streamlines the drug testing and screening processes for our clients, Labwire will continue to pursue further contracts as we gain traction in the long haul trucking sector,' according to Dexter Morris, President of Labwire, Inc.
• April 13, 2006: Labwire Inc. Signs Contract With Largest Offshore Drilling Company
Labwire Inc. (Pink Sheets:LBWR), a leading Employee Screening Solutions Provider announced today that it has signed a multi-year contract with the world's largest offshore drilling company.
• April 19, 2006: Labwire Expands Security Presence to Offshore Platform Security
• April 24, 2006: Labwire Announces Contract With Major Multinational Recruiting Outsourcing Corporation
The agreement calls for Labwire to provide its comprehensive employee drug and alcohol testing and screening services to the company who operates both on a national and international basis.
• May 4, 2006: Labwire Announces Contract Renewal With Leading Oil, Gas and
Chemical Company
• June 13, 2006: Labwire May Revenue Up 63 Percent
Labwire, Inc. (Other OTC:LBWR.PK - News), a leading provider of employee screening solutions and canine security and surveillance services, announced today that revenue in May 2006 was $307,772, an increase of $118,977 or 63% over May 2005 results. In addition and for the five months ended May 31, 2006, the Company's revenue was $1,651,324 compared to $833,902 for the five months ended May 31, 2005. This represents an increase of $817,422 or approximately 98%. Additionally…Labwire's results for the five months ended May 31, 2006 reflect and include April 2006 revenue of $286,512, an increase of $93,827 or 49% over April 2005 results.
AND
• June 15, 2006: Labwire Signs 3-Year Agreement Valued at $1.8 Million Annually
Labwire, Inc. (Other OTC:LBWR.PK - News), a leading provider of employee screening solutions and canine security and surveillance services, announced today that it has entered into an agreement with an international provider of environmental management services. Under the terms of the agreement, Labwire will provide comprehensive employee screening solutions, including: (i) secure and compliant drug testing; (ii) secure employee background screening; and (iii) secure and compliant, real time online data management. The agreement is valued at $1.8 million annually and is for an initial term of three years, with two one-year extensions.
Additionally, at an Investor Conference, Mr. Morris stated a goal to achieve $50 million in revenues within 3 years.
Oct. 26, 2005 Labwire President and CEO, Dexter Morris Presents at Investor Conference
biz.yahoo.com
Some highlights he discussed were;
-- Labwire is in the top 10 in revenue out of 700 +/- vendors in the
industry
-- Labwire has a Revenue/Employee ratio of $700k/employee compared to
the industry average of $200k/employee
-- Public Company Competitors are currently valued at 2.8 to 3.7 times
revenue
-- The Company projects achieving $50 million in 3 years with 30%
EBITDA
One can easily see that we are well on our way to achieving that goal of $50 million in 3 years and at the end of March 06 are annualized revenue was already over $4 million! And that is not counting the above contracts or the many more that are constantly coming in!!!
Revenue Growth:
Now at the beginning of your article on PLNI you had said an investor lead you to www.pinksheets.com where you decided to look up a recent stock price of that security. Instead of the stock quote you wrote that you received the following message:
Pink Sheets believes adequate current information must be publicly available during any period that the issuer or affiliates of the issuer are directly or indirectly engaged in promotional activities having the effect of encouraging trading of the issuer's securities in the OTC market. Pink Sheets has observed that such promotional activities are occurring for this security, but that adequate current information may not be available. Consequently, Pink Sheets has removed the quotes from this website until such information is made available by the issuer to the investing community
However, going back to the same website (or any other for that matter) and upon entering in the stock symbol LBWR you will quickly see a different display;
LBWR -- Labwire, Inc.Com ($0.001) Primary Venue: Pink Sheets Quote Status: Unsolicited Best Bid: Unpriced Best Ask: Unpriced
TRADE DATA Last Sale: 0.1470 Change: +0.0170
Percent Change: +13.08 Tick: Down
Daily High: 0.1650 Daily Low: 0.1300
Opening Price: 0.1650 Volume: 2,286,356
Annual High: 0.5200 Annual Low: 0.0500
Dividend: 0.000 Earnings/Share: N/A
Previous Close: 0.1300 P/E ratio: N/A
Yield: 0.00
Beta Coefficient: 0.00
Last Trade Date/Time: 06/16/2006
pinksheets.com
In summary, Selena, there are a whole lot of experienced investors, and no we are not speculators, who have come to the conclusion that Labwire is the real deal and the best long-term hold on the Pinks. Their experienced management team, led by a CEO who is the best in the industry, has delivered on his promises with increasing revenue quarter after quarter, new contracts are continually coming in, and dilution has been kept to minimum. Are there risks involved with Labwire. Yes. No they have not begun to file with the SEC (it is the Pinks but Mr. Morris is planning a move to a higher exchange). Yes they will have to better manage their expenses, A/R, and their operating cash flow. But let me remind you Selena that every crystal glass has some small blemishes. And one only has to remember a several stocks that did do a substantial amount of SEC filings such as Enron, Tyco, and one that the Fool proudly touted as a hidden gem a few years ago, Krispy Kreme to realize the large exchanges have their fair share of scams as well. But a true Fool Investor knows the key to finding the hidden gems on any exchange is through performing exhaustive due diligence and a network of fellow investors who all bring different talents, opinions, and questions to the table.
So the only question now is will you take my earlier bet that you can turn $1000 worth of LBWR stock into $10,000 in two years?
A fellow Fool,
Mark A. Wilson
Unreal. That's a great job. Thanks Mark for all the hard work. Guess we made some noise.
GB-ND
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