SWAT TEAM Write Up of IBAH / Parts One and Two
IBAH Inc
Exchange: NNM
Symbol: IBAH
HOMEPAGE: ibah.com
BUSINESS SUMMARY
IBAH provides comprehensive product development services worldwide for client
companies in the pharmaceutical, biotechnology, medical device and diagnostics
industries. IBAH has 17 locations in 12 countries on 3 continents.
HIGHLIGHTS
IBAH has a good combination of Technical and Fundamental factors working together
that makes it a very timely selection.
Techicals: The chart shows a nice Double Bottom forming.
wsrn.com
Positive MACD. Positive MoneyFlow. Positive Time Segmented Volume. Rising
Relative Strength. It is poised to break above 4 3/8. This is the right shoulder of a
Reverse Head and Shoulders pattern. From there, it has little resistance to the 6.00 to
8.00 price range.
Fundamentals: The Revenues and Earnings are growing rapidly. Here's a Revenue
chart:
www1.wsrn.com.
The Revenues and Earnings breakdown:
12mos(3) 1996 1995 1994
Revenues ($Mil) 90.0 62.2 44.8 34.7
EPS Estimates:
Current Quarter: .05 Last Year: .04
Next Quarter: .04 Current Year: .08
Next Year: .19
Zacks is even more positive on the Earnings outlook:
Consensus Estimate for Current Fiscal Year (12/97) $ 0.09 per share
Consensus Estimate for Next Fiscal Year (12/98) $ 0.22 per share
EBITDA (Earnings before Interest and Taxes) has turned up sharply:
www1.wsrn.com
THE MARKET MAKERS
Over the past week it has been observed that there are 12 market makers in IBAH.
HRZG, SWCO are the inside buyers @ 3 7/8 and LEHM, HMQT and PENN are the
inside sellers @ 4 1/8. The next level down shows MASH and VECT willing to buy
stock at 3 3/4 and SHWD VECT CANR and MASH will to sell stock @ 4 1/4. An
interesting note is that at around 3:45 on Friday afternoon MASH was willing to buy
IBAH (4000 shares) at 3 31/32. It seems he
briefly showed the public that he is currently looking for stock by going high bid. It was
ironic because at the end of the day there was an offer at 4 in which small lots were
taken mostly 500 shares. The minute the offers left, MASH went high bid. At about
3:55 MASH left the bid and the inside market is currently 3 7/8 by 4 1/8. MASH is
definatly a buyer and will show up Monday morning looking for stock.
Prior Market Maker activity:
nasdaqtrader.com.
THE BALANCE SHEET
As of the end of the September quarter, IBAH's balance sheet is strong. During the
first six months, IBAH burned more than 50% of it's available cash (mostly from 4/96
PO). However, with earnings in the September quarter, increased accounts receivables
from higher sales plus new financing and credit facility, management has strengthened
the company's position to expand growth into the future. Long Term debt is now
$5.8million ..... relatively low for a company in the pharmaceutical business. Stock
holders equity stands at $49 million or $1.80 per fully diluted common share.
BUSINESS PLAN
Sector Analyses: IBAH's competition comes from other companies within a
fragmented industry sector in its infancy. The Contract Reseach sector will soon be
dominated by a handful of global full service firms. Worldwide research and
development expenditures in the pharmaceutical sector were estimated at
approximately $30 billion for 1996 and are expected to increase while the CRO's
expand their exposure into the trillion dollar per year healthcare services sector.
hamquist.com
CROs are experiencing strong growth as more companies are choosing to outsource
for the following reasons:
* to improve profit margins.
* to speed up new product introductions worldwide.
* less costly than building the infrastructure necessary for the clinical development
stages.
* emphasis on globalization, pursue product development simultaneously in multiple
countries.
IBAH'S PLAN: Growth in U.S.operations as International turnaround continues. In
June 1997, the Company implemented a restructuring plan for the International CRO.
New management was brought in and new policies implemented. The company has
also been growing by acquisition, having added Pharmaco PTY, LTD, a provider of
clinical trial, regulatory, data management and health economics services in Australia
and New Zealand in May of this year, the Hardardt Group, a clinical monitoring and
clinical trials management company in October of 1996 and Resource Biometrics in
July of 1996. IBAH also closed the not profitable softare commercialization business
unit of Resources Biometrics in June.
ibah.com
TA - IN THREE PART HARMONY
TC2000: BOP is showing bullish improvement with some erratic behavior between
accumulation and distribution over the last several months. MoneyStream is giving a
very strong short-term reading moving up from neutral intermediate-term and negative
long-term reflecting the downtrend over the last year. Five dayTSV is giving a strong
buy signal that has surpassed all readings for l997. The 18 day TSV is also strong
approaching old highs. The 5/13/40 day EMA just established a bullish configuration
as the 5 and 13 broke above the 40. This is a strong bullish signal. OBV is very strong
and the daily reading is well above the 40 day MA.
Trendlines, Support, & Resistance: IBAH's chart shows the stock at a crossroads --
after coming off its 1997 peak during the week of Feb 21, 1997 of 8.38, IBAH
quickly tumbled to a low of 3.0 during the middle of July. After making a brief rally, the
stock again fell to a lower low in November of 2.88, indicating that the main
downtrend is still intact.
Downtrending lines: The highs during this period define one major downtrend line, and
looking at the chart this remained the defining resistance from the August peak to the
November low. On December 8, IBAH tested this line; on December 9, IBAH broke
through this major downtrend on very high volume. However, December 11 activity
fell below this line even though the close was above it, and finally on December 12th,
activity stayed above the downtrend
but on much less volume. Thus, we have an initial breakout but no confirmation as of
yet. Confirmation will need another strong move without violation of the downtrend line
in any way, coupled with high volume.
Uptrending lines: There are two intermediate term uptrend lines that IBAH can use for
support. The first connects the all-time low of 1.75 made in June, 1995 with the low
made in November 1997. This is the absolute bottom level of support IBAH has, and
since it has never been retested (it is in essence defined by two days), it cannot be seen
as strong. Right now, this line is at around 2 29/32.The other possible uptrend line
would connect the all-time low with the low in July 1997; since this has already been
broken when making the lower low, this line is even weaker. Right now this line is at
around 3.19. Until IBAH can retest a support line, meaning the intraday low touches
the line without breaking through, these lines are much weaker than
the resistance lines which have been defined over many months and some over years.
Key Horizontal Support/Resistance lines: IBAH's spread has historically been around
1/4 point, and there are many lines that can be created all the way up in 1/4 point
intervals. Here are the major ones I see, and the months the stock used them for either
support or resistance: (Note the stock closed on December 12th at 4.0, so right now,
unless the stock gaps up, 4.0 is resistance.)
SUPPORT: 3.75 (1997: May, June, July, August, October, November, December
14th)
RESISTANCE:4.0 (1997: May, June, July, October, November)
4.38 (1997: April, August, October, December 10)
4.75 (1997: April, August, September)
5.0 (1997: April, August, September)
5.5 -- 1996 support line
Current Short Term Acceleration Line: IBAH seems to be trying to define an
acceleration line based on the the lows of 12/9 & 12/12. However, since this line, like
the longer term support lines, has no retest, and is only defined by two days, it is also
not confirmed as a true acceleration line.
Conclusion: IBAH is at a point either right before a turn around, or it is still caught in a
downtrend. If IBAH can break through a couple more resistance lines on strong
volume, that would bode well for the current acceleration line. But the key indication
will be whether or not IBAH has successfully broken out of its year-long downtrend;
The important thing to look for right now is where the next low will happen; if it is
higher than 2.88, a new uptrend will finally be forming. If however, it is below or at
2.88, IBAH still has a long way to go.
TA OVERVIEW:Over the last 2 months the technicals for IBAH have shown
improvement and the oversold condition the TA shows may be nearing an end shortly.
The stock is able to move well on any technical uptrend and the short-term trend is
moving up well at this time. As the price moved to a lower low a month ago, the RSI
became convergent which gives the stock a chance to make a move higher than the
previous short-term high. The MA/MLR indicates that IBAH will be a volatile stock in
the short-term and large weekly swings in price can be
expected. The recent increase started off as a move out of a base on base pattern and
I would expect it to continue if volume is encouraging.
INSTITUTIONAL COVERAGE
IBAH will be featured at the Hambrecht & Quist Healthcare Conference in
January
January 12-15, 1998
16th Annual
Healthcare Conference
Westin St. Francis Hotel -- San Francisco, CA
hamquist.com
Research firms following IBAH:
VECTOR SECURITIES INTL. Analyst John Cregar 11/28/97 BUY
bamf.com
HAMBRECHT & QUIST LLC Analyst Ken Miller 11/03/97 BUY
hamquist.com
PENN. MERCH 10/31/97 BUY
PACIFIC GROWTH EQUITIES Analyst Linda Greub 11/06/97 BUY
INSIDER OWNERSHIP
As of November 15, 1996, the Company's executive officers, directors and their
affiliates beneficially owned approximately 50% of the outstanding shares of Common
Stock.
Name of Stockholder Shares Owned Percentage
William Hardardt as Trustee of 1,408,847 6.3%
Hardardt Family Charitable RemainderUnitrust U/D/A 12/17/96
Sherrin Baky (3) 678,727 3.0%
Judith Hardardt (2) 627,335 2.8%
John Brega (4) 169,279
Thirty other insiders with lesser holdings than the above.
IBAH PART 2
THE NEWS
IBAH is not a company that releases alot of NEWS, but when they do have a Press
Release it is usually fairly Important news. In other words, the company does not seem
to like TOOT their own horn much. Looking at their earnings reports, it looks like they
could TOOT the Horn a good deal more often. There is MUCH the Company could
Brag a bit about! Guess they feel the growing numbers in each Earnings Report says it
all.
On Dec 12th 1997, Dow Jones News Retrieval Reported that IBAH continues to
enjoy the Buy Recommendations of 4 Analysts with a combined 4th Quarter EPS
estimate of $0.03 a share of .04. They est.1997 Fiscal Year at 0.09 and a 1998 Fiscal
Year of 0.22
* Dow Jones News Retrieval is a PAY SITE, here is another site with FREE
information:
ultra.zacks.com
ultra.zacks.com
News in general:
fast.quote.com
Oct 30th 1997 / Thirded Quarter Earnings:
fast.quote.com
IBAH Reported "strong revenue growth in the US divisions, as well as continuing
improvements in the International division, resulting in sharply increased
operating income over the comparable period of 1996 Third Quarter Earnings."
For the 3rd Quarter Net Revenue increased 53% to 23.1 million, Operating Income
was up 79% reaching $1 million, pre tax income was up 35% to $980,000, EPS was
$0.03 compared with $Zero the year before.
Quarter after Quarter, IBAH has been showing strong increases in Revenue,
Income, Sales, Eps.
Oct 7th 1997
fast.quote.com
IBAH was mentioned in the Press Release of another company. "HRP purchased
eight commercial office properties for $147.75 million"
"These Class A and B suburban properties contain a total of 364,310 sq.ft. and
are majority leased to various healthcare related tenants, including the
pharmaceutical manufacturer, Merck & Co Inc. (NYSE:MRK), a smaller biotech
research company, Bio-Pharmaceutical Services, Inc., a subsidiary of I.B.A.H.,
Inc.(Nasdaq:IBAH - news), and children's Hospital of Pennsylvania and Allegheny
Health, both large Philadelphia area not-for-profit clinical health care
providers. "
Not HUGE News but does show they have Some very Interesting naibors!
Corporate Mission Statement
ibah.com
IBAH is a Development Services Organization (DSO) which provides services to
the Healthcare Products Industry on a global basis. Our mission is to be a
market leader in each of our service areas. We will accomplish this by valuing
and developing our employees and by having a passionate committment to
achieving the objectives of our clients in the shortest possible time frame.
We will serve our clients in a manner which is:
Consistantly Innovative
High Quality
Cooperative
Friendly
Responsive
Through the successful efforts of our people, our continued growth will provide
increasing value to our customers, employees and shareholders.
Request further informtion from the company
ibah.com
May 2nd 1997
fast.quote.com
"IBAH Announces the Appointment of President of the International CRO"
As the Press release says" "The appointment of Mr. Weekers as President of the
International CRO adds to our team a seasoned executive with the experience to
improve the performance of our International CRO in the second half of 1997 and
beyond," and "Mr. Weekers brings to his position extensive experience in the
general management of a very competitive, service-oriented international
healthcare business."
Not to mention, a very impresive resuma!
March 3rd 1997
fast.quote.com
IBAH, INC. ACQUIRES AUSTRALIAN CRO
"Signing of a definitive agreement to acquire Pharmaco Pty.,Ltd., an Australian
based Contract Research Organization (CRO).
World Wide growth
Synopsis of Hambrecht & Quist Research Report
Date: November 3, 1997
"Selling, general and administrative expenses for the nine months ended September 30,
1997 were $27,267,000 or 43.0% of net revenues, as compared to 48.0% for the
same period in 1996. The improvement was due principally to the US CRO business
where selling, general and administrative expenses as a percentage of net revenues
decreased from 43.5% in 1996 to 36.1% in 1997. The US CRO showed this
improvement because the revenue volume for this business has continued to grow more
quickly than its infrastructure needs. "Net revenues of the US CRO increased by
81.2%, (20.4% without acquisitions) on a comparable quarter basis. Operating income
was $1,903,000 for the third quarter of 1997, a 297.3% increase over the comparable
quarter of 1996 including one-time charges, reflecting increased revenue growth and
productivity improvements for this Division. The US CRO continues its trend of
obtaining strong new business commitments. International CRO International net
revenues increased by 3.7% from the third quarter of 1996 to the third quarter of
1997. On a sequential quarter basis, net revenues increased 12.7% from the second
quarter. Additionally, operating losses decreased by 19.4% quarter over quarter due
to improved revenue volume. The sequential improvement of net revenues and
operating losses continues the favorable trend initiated in the second quarter of 1997.
In addition, the International CRO continues the trend of obtaining new business
commitments. Savings realized from the implementation of the second quarter
restructuring program resulted in flat indirect growth third quarter 1997 to second
quarter 1997. Additionally, indirect expenses are expected to continue to grow at a
slow rate for the remainder of the year.
nternational has continued adding strong management talent to its portfolio to further
position the business for future growth. "
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Synopsis of Pacific Growth Equities Research Report
November 6, 1997
Pacific Growth has lowered their 1997 revenue estimates from 90 million to 87.9
million and 1997 revenue from 115.6 million to 106.5 million. They have also lowered
the operating income margin in 1997 from 4% to 3.5% and in 1998 from 9.4% to
7.9% but expect a sustainable growth rate of 25%. IBAH increased their 1997
revenue 33% from prior year but it was slightly below
estimates. U.S. CRO revenue was up 81%, excluding acquisitions. Due to a delay in a
large contract, revenue fell below the estimate of 15.6. They expect the contract will
begin infull during quarter 1 of 1998. The International CRO revenue of 5.4 million
increased 12.7% sequentially. Pharmaceutics services continued to perform ahead of
plan with revenue of 2.7 million, up 69.7 over prior year and ahead of the 2.6 million
estimate. Pacific believes that IBAH Management is taking the necessary steps to
move the International CRO towards achieving profitability in the later half of 1998.
Pacific believes that investors will remain cautious about IBAH's future until they see
sustainable improvement in the International Division. PACIFIC Maintains a BUY
rating.
COMPANY HISTORY
The business was started in 1985 by Geraldine A Henwood. The Company is the
result of a merger between Bio-Pharm Clinical Services Inc. and Affinity Biotech Inc
which was completed on April 27, 1994. In October, 1996 IBAH Inc. acquired the
Hardardt Group, Parsippany, NJ and mergered the company's operations completely
into IBAH Inc. In July, 1996 IBAH, Inc. acquired
Resource Biometrics Inc. Emeryville, Ca and merged the company's operations
completely into IBAH Inc.
IBAH Inc. employees 755 which includes officers. The Company rents 71,000 sf in a
two story concrete block building in Blue Bell, Pa. The Company is also utilizing four
other buildings in Blue Bell, Pa. IBAH, Inc. maintains branches in Raleigh Durham,
NC; Lake Bluff, Il; SanFrancisco, Ca; two offices in Fort Washington, Pa.;
Copenhagen, Denmark; Brussels, Belgium; Spain; Frankfurt, Germany; Chippenham,
England; Basal, Switzerland; Paris, France; Sydney, Australia; Prague, Czech
Republic; Moscow, Russia and Maastricht, Netherlands.
The Company and all of its branches contract clinical research services for
pharmaceutical
and biotechnologh and medical device industries.
On April 19, 1996, the Company completed a public offering of 3,000,000 shares of
Common Stock in which the Company raised approximately $18 million in net
proceeds. The shares were sold to selected institutional investors. |
