from CyberWhispers
globalminerals.com
Stocks undervalued going forward. Broker figures $.90- $1.00 fare value going forward and full year strong profit potential. Accumulating here for next 3 days likely fast run up.
Comapny has large orders on books and more coming in from different lines.
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52-Week High/Low: $0.29 - $1.56
Outstanding Shares: 10.1 million
Estimated Float: 2.4 million shares
--CORPORATE OFFICES
Interactive Processing Inc.
4410 N. Rancho Drive, #194
Las Vegas, Nevada 89130
--INVESTOR RELATIONS CONTACT
Toll Free: 1-800-522-6888
Phone: 1-604-689-4060
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The total number of television sets, throughout the world, now approaches 750 million. Over 250 million in North America and Mexico. What I've observed are the increasing number of BORING remote control devices for all of us "couch potatoes." Virtually all look alike.
Along comes Interactive Processing with their first generation TV Terminator (TVT), the very first interactive, universal TV remote control device. It became such a hit that numerous magazines and newspapers (including Newsweek, Sports Illustrated, USA Today and US News & World Report) gave it positive media coverage. The "free publicity" nailed down a large number of orders for the TV Terminator.
Then, another big deal came along which opened new doors -- the licensing agreement with Sony Signatures, the worldwide entertainment merchandising division of SONY Corporation of America. This led to a "second generation" of their interactive remote control device. There's more to this story, which is why I believe you owe it to yourself to find out more about IAPI.
--INDUSTRY ANALYSIS
The universal remote control market is dominated by one manufacturer: Universal Electronics (NASDAQ:UEIC; $5.50/share). UEIC is recognized as a low-cost producer with an aggressive pricing policy with a double money-back guarantee. They also manufacture the Eversafe home and personal security systems. UEIC had earnings/share estimates consensus of $0.66/share for FY1996 and $1/share for FY1997. UEIC targets a more sophisticated segment of the remote control device market, but does not offer the same combination of features as IAPI's TV Terminator. IAPI does not consider UEIC a competitive threat to their business, particularly when considering the patent protection IAPI enjoys. UEIC is the industry leader.
It may be possible that if IAPI continues their successful media activities, the company may draw the attention of UEIC, which might result in a takeover. IAPI's tiny market capitalization might appear more attractive, under a takeover scenario, than what it might cost to compete against their product line. While not a factor, at this time, it may become a serious consideration, down the road, depending on how successful IAPI's promotions become.
--BACKGROUND INFORMATION
Novelty items sell well, but companies, which market them, often rest upon their laurels on a "single product launch." The TV Terminator sounded like a good idea. This pistol-shaped remote control device is the first remote control with a variety of sound effects and the first remote control with a "trigger-operated" channel changer. Having tested it myself, I found it the easiest universal remote control to program (a couch potato's dream!). The interactivity to this device includes: a crowd roar, a crowd boo, a machine gun... and a silencer for those who want to point and shoot in peace.
So far, IAPI has been playing their cards fairly well. Orders for the TV Terminator continue to stream in from their initial mass media publicity campaign.
For example, USA Today cited the TV Terminator as one of the "hottest new products" at the 1996 Consumer Electronics Show. The product has since been placed in a number of popular television shows.
--LICENSING AGREEMENT WITH SONY
With IAPI's news release of August 6th, announcing the signing of their License Agreement with Sony Signatures, a division of SONY Corporation of America, the company instantly gained credibility. The first step in that agreement gave IAPI the right to name its sports model of the TV Terminator, the "Bundy Sport Remote." The product, which looks like a football, comes complete with a "kicking tee" stand, as well as the booing and cheering features (to cheer a touchdown or boo the referee). As part of the Sony agreement, IAPI can use the approved images and names of the characters of the popular TV sitcom, "Married With Children" in their promotional materials.
I would assume that the SONY licensing agreement is probably the first step in a mutually rewarding relationship between these companies. After all, there are other TV shows & movies and potentially other agreements which could be reached. The company is optimistic that this is just the beginning.
--EXPANSION
IAPI has the exclusive worldwide marketing rights to the Interactive Remote Control technology. That technology is already patented in the USA and is patent-pending in Canada. According to company materials, this remote control device works with virtually all TV's, VCR's and Cable Boxes currently on the market. IAPI is currently exploring other opportunities and additional applications for their proprietary infrared technology.
Their second year expansion plans include a repeat of their successful launch at next year's Consumer Electronics Show (Las Vegas). IAPI intends to pursue sports logo affiliations and celebrity endorsements. The company also plans a catalogue of accessories, hopefully cross-marketed with new products and additional endorsements.
Then, there is international expansion. IAPI's TV Terminator has begun getting international press coverage, which (of course) can open doors to additional deals and more sales. The next logical markets include Europe and Asia.
Consumer testing on the TV Terminator indicates that the TV Terminator could capture TWO percent of the world market -- roughly 15 million units. Preliminary buying response has come back as high as 90% from industry-specific regions, corresponding directly to IAPI's targeted market penetration.
None of their marketing efforts have thus far penetrated the retail chain department stores. This is likely to be saved for last, once the strong profits have been extracted from the seemingly endless free publicity and any future advertising efforts.
--EVALUATION
Using the company's projections of 15 million units sold over a three year period, ignoring any possibility of "repeat" business or new generation models released over that three year period, IAPI's gross sales and profit margins appear potentially respectable.
For example, based on a 7-1 (price to cost) ratio, IAPI would gross approximately $105 million, over this three year period, at a manufacturing cost of $15 million. That would leave a gross operating profit of $90 million. Discount 50% of this figure for projected advertising/marketing/operational costs and IAPI is left with $45 million, or roughly $15 million annually. While these figures may be optimistic, as we are dealing with untested projections and using a typical direct order model, it still demonstrates the potential profits provided by sales of an interactive remote control device.
To date, IAPI has primarily had modest success through two venues: (a) Norm Marshall & Associates which has successfully placed the company's TV Terminator product into TV shows and movies, which I'm assured there are more to come; (b) Last year's Consumer Electronics Show in Las Vegas which engendered numerous national magazine and newspaper press clippings, which led to direct order sales. IAPI intends to premiere their Bundy Sport Remote at the 1997 Consumer Electronics Show (early January), which would hopefully repeat the media success of 1996. The company has also commenced TV direct sales by informercials, which is positive but not yet proven. An offer to direct-sell the product via Per Inquiry advertising is currently being negotiated.
--RISK FACTORS
IAPI is generating revenues but has not yet turned the profitability corner. It is unknown if and when that would occur. The company anticipates raising their stock price in the near future in order to secure financing, which may give them the wherewithal to expand operations and product promotions. It is not known whether they will secure the financing or be successful in those promotions. There are several hurdles for IAPI to overcome. |
