OPSY news, another IAIC?
Company has float of 900K, SO of 5.5 million, if news sources are to be believed.
Story #1
Optical Systems, Inc. Hard Numbers
EDISON, N.J., March 4 /PRNewswire/ -- Optical Systems, Inc. (OTC Bulletin Board: OPSY) continues to book and bill Year 2000 remediation business. Since January (the beginning of the 2nd fiscal quarter), OPSY has successfully converted over 2.5 million lines of code for a single client for which they will receive payment in March. This major client has already awarded OPSY an additional 20 million lines of code to be completed by July 1998. While the price per line of this contract is lower than industry norms, there is ample room for profitability on the entire contract. The code will be converted on site at the customer premises, which demonstrates the versatility of the CCD On Line software and OPSY's strong technical capabilities. Additional substantial business with this customer is anticipated and the price per line should trend higher, allowing for even greater profitability.
A new contract with the National Automobile Dealers Association in Washington, D.C. was announced on March 2nd and code has already been shipped to the Edison, N.J. "factory" for remediation. The 1,500,000 lines of code contract calls for a price per line approximating current industry standard rates which will most probably be the OPSY benchmark for future contracts in fiscal 1998. The contract should be highly profitable as the Edison facilities have been previously expensed in earlier quarters.
Numerous additional contracts are either at the "RFP" stage or in later stage negotiations and a serious assessment by management indicates that no less than 8 additional contracts should be signed between now and fiscal year- end (September 30). Each of these contracts appears to involve a very significant number of lines of code, thus producing a burgeoning revenue stream on a relatively low number of contracts.
The converse to this rapid ramp-up of current business and indications of potential contracts is an increasing demand on human and technical resources. OPSY is continuing to add staff and hardware and will do so throughout this fiscal year. (All key personnel and new employees are highly "incentivized" through stock options and milestone bonus plans thus assuring a low turnover rate). Therefore, expenditures are expected to exceed revenues in the first and second quarters of fiscal 1998. The company is in negotiations to complete a relatively small private financing which will allow OPSY to grow its business in a timely but prudent manner. The fiscal third quarter will show some solid top-line growth, abetted by business already booked and should range in the neighborhood of $1.5 million to $2.0 million with few additional new contracts. On that revenue figure, OPSY should demonstrate the earnings potential that will materialize as volume increases. The fourth fiscal quarter revenues should show dramatic growth and earnings of some consequence ought to be recorded. (It should be noted that the company's Internet service business will begin to come on stream in this quarter which management believes will be a strong element in sustained revenue growth).
Fiscal 1999 still looks to be the breakout year, and while still too early to be unequivocal in Innovative Research Associates' projections, management insists that $40,000,000 in revenues and pre-tax earnings of $8,000,000- $10,000,000 are highly feasible numbers. Those figures make OPSY compellingly cheap at the current price of $4.
The obvious question is post 1999. OPSY management strongly believes that in addition to substantial leftover Y2K business, it will profit immensely from the Euro Currency conversion project. (OPSY is in late stage negotiations to form a strategic alliance with a well-regarded IT firm in Frankfurt, Germany). The document management, the Safe CD business, and the Internet service business will also be natural follow-ons with Y2K clients. Thus, while growth may not be in the "telephone numbers" ballpark, OPSY should continue to evolve into a substantial full line, complete service Information Technology entity with diverse capabilities. With a strong and highly credible management team, Innovative Research Associates believes this goal can be accomplished. Purchase of OPSY at current levels is strongly recommended.
This report contains forward-looking statements that involve a number of risks and uncertainties. Important factors could cause actual results to differ materially from those indicated by such forward-looking statements.
The financial information and time tables presented herein have been obtained from management and sources believed to be reliable, but no guarantee is made to its accuracy or its completeness. Any opinions herein expressed reflect judgments at this date and are subject to change without notice.
Innovative Research Associates, Inc. and/or Murdock Capital Partners Corp., its principals and employees hold stock positions in and/or options and warrants to purchase the securities mentioned within this report. Murdock Capital Partners Corp. currently provides paid investor relations consulting services to Optical Systems, Inc.
This report is neither an offer to sell nor a solicitation of an offer to buy the securities mentioned herein. This report is not meant to replace the reader's own research, but to be used in conjunction with it as a guide in aiding the reader to better understand Optical Systems, Inc. Additional information is available on request.
Story #2
NADA Awards Year 2000 Contract to Optical Systems, Inc.
WASHINGTON, March 4 /PRNewswire/ -- A contract to assure that the National Automobile Dealers Association (NADA) will become Year 2000 compliant was awarded to Optical Systems, Inc. of Edison, N.J. (OTC Bulletin Board: OPSY). Optical Systems will provide Year 2000 services for system evaluation and conversion of the NADA mainframe application inventory for Year 2000 compliance. The contract covers approximately 1,500,000 lines of code.
"We are pleased to be working with Optical Systems, Inc. in this important facet of our business," Don Gentry, NADA's Chief Information Officer stated. "We are confident that working together, we can resolve our Year 2000 mainframe systems problem in a cost effective and timely manner," Gentry added.
The National Automobile Dealers Association represents more than 19,500 franchised new car and truck dealers holding nearly 40,000 separate franchises, domestic and import.
Optical Systems, Inc. provides information technology solutions. The company specializes in Document Management and Year 2000 code assessment and renovation answers. Optical Systems, Inc. provides LAN/WAN Internet/Intranet services and support as well as a full range of consulting services.
SOURCE Optical Systems, Inc.
CO: Optical Systems, Inc.; National Automobile Dealers Association
ST: New Jersey, District of Columbia
IN: CPR MLM
SU: CON
03/04/98 12:28 EST prnewswire.com |
