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PHARMACEUTICAL LABORATORIES
Symbol : PHLB (OTC BB)
Website : http:/www.phlb.com
IR : George Baucom 1-800-856-7040
Email : phlb@interconnect.net
Fully outstanding : 9.6 million (6.4 million restricted by rule 144)
Public float : Approximately 3 million
Share price : $2.00
With all the major markets going in a tailspin, the smart money should start flowing into the small cap stocks now and we are presenting an ideal candidate that is just beginning to be noticed.
CONVENTIONAL INVESTING WISDOM
Conventional Investing wisdom calls for investing in solid companies with good management, high insider ownership, tight floats and a niche product market that is/will be the trend of the future. The trick to making the easy money in these stocks is to get in before the crowd does and do your due diligence quick enough before the company starts releasing its solid fundamentals to the public masses.
We feel we have uncovered a stock like that which is relatively unheard of until lately when we heard that certain Canadian groups as well as US funds have been sniffing around at this company. We have been watching PHLB for some time now and we feel the time is here for this company that will open many eyes. We feel the time is close for this stock as the markets took a serious correction in the last 2 weeks and the stock has been manipulated by market makers as they are very much short on the stock, however the supply on this stock is very tight as most if not all shareholders are believers in the company and rightly so.
UNCONFIRMED RUMORS - THE SAVVY STUFF
We are very excited about PHLB for several reasons as you one can see. However, in doing our due diligence we have uncovered a lot of unconfirmed information on the stock which is not public. We will give you certain information we have heard through the grapevines which is making us very excited about PHLB in the very short term. Please note that these are unconfirmed rumors only but come from fairly good sources.
1) Strong consistent positioning from a big funding group out of Canada in the last few weeks.
2) Big short position about to come to surface with the above positioning. - The following market makers are short in the hole from our very good brokerage sources : Sharp Securities, Knight securities, Wien Securities, and Paragon. The increased volume lately is because the MM market makers lately have been trying to suck in as much cheap stock at these levels as they know a move is imminent on the strong fundamentals ! .
3) A very big marketing campaign to bring awareness of the companies products to the entire US and Canadian market including television and radio adds (slots)
4) Mutual fund managers and analysts calling the company for prospectuses.
5) Several new stores coming onside to join the distribution channel of their highly successful products.
6) A Possible equity involvement from a major company.
7) This one is a far shot at this time but PHLB might be looking at a potential acquisition.
INCREASING REVENUE and HIGH MARGIN PROFITABILITY
The company has reported revenues of $2 million already up to April 1998 with a net profit for the first 4 months in 1998 of $230,000 ! We have heard through our good sources that the company might release their 6 month financials any day now. We will send a flash as soon as they are released. Their gross margins on their product line is roughly 35 % ! The company showed a loss last year as it charged all of it's R & D, new plant facilities, automated equipment and warehouse costs.
THESE EXPENSES HAVE ALL BEEN CHARGED AND NOW WE ARE LOOKING AT PURE PROFIT MARGIN AND STRONG GROWTH FOR PHLB !
Furthermore, the company has cash in the bank to do all the advertising, market awareness program it needs to do here in the short term to get its products the recognition out there.
NEWS RELEASE August 4th 1998
Read the release carefully below. This release is very significant as WE HAVE HEARD THAT THIS MAJOR SUPERSTORE HAS AS OVER 3000 RETAIL OUTLETS IN THE US ALONE ! A nationwide introduction of LIQUID SOLUTIONS will add several millions to its bottom line this year alone.
We predict PHLB should continue with solid good news releases from here onwards probably several strong ones including a couple of surprise announcements.
THE COMPANY AND THE PRODUCT
Pharmaceutical Laboratories, Inc. (PHLB) is an aggressive well-managed company on the verge of establishing its dominance in the lucrative market of vitamin and health supplement products. The vitamin and nutritional supplement sales are currently estimated at $9.8 billion per year, with a annual growth rate of 10% -12%.
PHLB'S NICHE MARKET
What sets PHLB apart from the rest ? The company has successfully engineered unique vitamin and herbal products that are different from all the rest. Their products are MUCH MORE effective than the rest of them out there as shown by marketing studies. The company specializes in liquid and liquid sublingual products. The company recently started marketing its products under the brand name " LIQUID SOLUTIONS". Prior to this, the company used to sell its products under the names of the various companies it used to deal with but realized that this was a very lucrative business and decided to go with its own brand name for worldwide recognition and bigger profitability. To date their products are far outperforming its competitors products with a market share that is continuously on the rise.
For more information on their products Visit their website at phlb.com
DISTRIBUTION CHANNELS
Current distribution channels for PHLB's products are Drug chain stores such as Walgreens, Eckerds, Grocery stores such as Tops, HEB, Independent drug stores, Independent health stores, Health care professionals e.g. doctors, chiropractors, nutritionists, Health clubs, spas and salons.
Also remember that the LIQUID solutions have just been introduced in the US market and the marketing campaign has not even begun yet.
MANAGEMENT
phlb.com
Very strong management with leadership skills who have high equity ownership in the company and are committed to making PHLB a world leader and producer and distributor of liquid vitamins and other related liquid health products in the North American marketplace. The company is already off to a head start as can be seen by their revenues and profits to date. A key factor to see how successful a company will be is to see how much ownership management has and if their stock is restricted. Management in the case of PHLB has roughly around 7.5 million shares of which 6.4 million of them are pooled and cannot be sold.
NEW BIGGER PLANT : INCREASED DEMAND
The company showed a loss last year as it charged all of its R &D cost, New production plant, Warehouse costs, and Automated equipment in 1997. The new plant is approximately 30,000 square feet and is situated on two acres. The reason for this is obvious as they are anticipating big growth in the coming months because of all the alliances they will be forming with the major superstores.
An added bonus is that this new plant will lower their costs and increase their gross margins. An additional 15,000 square feet is available on four acres near the main manufacturing facility. This property was acquired in anticipation of future expansion.
PROJECTED REVENUES/EARNINGS
PHLB has projected revenues of $10 million for 1998, which is a very conservative number. Sales are expected to double in fiscal 1999, as management expects the addition of major chain contracts including nationwide drug store chains and superstores.
Assuming these contracts are put into place, and growth continues at the pace it has been, sales levels are expected to reach $27 million in 2000 and $42 million by 2002. The company is confident that these estimates are quite conservative and that it could reach these levels sooner than anticipated.
At the current rate of sales and growth, PHLB may realize a profit of $1.5 million this year! With 9.6 million shares outstanding, this translates into an impressive 0.16 EPS (earnings per share). When we apply industry average multiples, which range from 35.6 to 41.1, we can safely assume that PHLB is indeed extremely undervalued and has explosive growth potential.
SUMMARY
In doing the analysis for PHLB, we looked at all the above factors and we feel that the awareness on this stock is just beginning as can be seen by the pick up in the volume and announcements of alliances, strong numbers and needless to say other strong happenings with the company behind the scenes which should surprise many in the short term. Just like when we presented our other stocks with perfect timing in terms of price gains and fundamentals, PHLB is at that crucial stage right now. Market makers are trying to suck in as much stock as they can as they know that this stock is primed to move aggressively to the upside very shortly. We feel the downside here is almost nil judging from the past activities of the stock and the pattern and the upside? It could surprise many right about now :)
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August 4th 1998 Press Release
PHLB Press Release.
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Pharmaceutical Laboratories Inc. Completes a Successful Market Test of
Its "Liquid Solutions" Product Line
CORPUS CHRISTI, Texas--(BUSINESS WIRE)--Aug. 4, 1998-- Pharmaceutical
Laboratories Inc. (OTC BB:PHLB - news) President and CEO Jerry McClure
was pleased to announce the results of a trial sales test with a major
U.S. superstore chain measuring market acceptance for the new line of
liquid vitamin and herbal products sold under the brand name, ''Liquid
Solutions.''
The test-market was conducted over an eight-week period on a regional
basis in 74 of the chain's Texas outlets. According to management,
results far exceeded expectations.
The 74 stores averaged more than $11,000 per week in retail revenues
over the eight-week test period. This represents approximately $1,200
per store, bringing the total dollar sales for the select stores in
excess of $89,000. If these results were to be magnified to every outlet
of the national chain and supported with a marketing campaign, yearly
sales for that sole chain would be significant to the Company's annual
revenues.
Only a select few products from the ''Liquid Solutions'' line were
introduced. From the list of more than 100 available products, the
partial list included the B-Total Solution, the Company's best seller,
and four herbal Liquid Solutions -- Ginseng, St. John's Wort, Echinacea
and Ginkgo Biloba. Other ''Liquid Solutions'' products featured were
Calcium, Vitamin C and Multi-Vitamin.
According to Sherell L. Boren, the Company's National Sales Manager, the
''Liquid Solutions'' line is ready for national introduction to the
industry and, based upon the successful regional test-market results,
the line should be well received.
McClure also stated that ''the Company has received a multitude of
positive responses from the questionnaire cards inserted in every
product's packaging, expressing the consumer's satisfaction and
appreciation that a quality liquid vitamin line is now available.''
Pharmaceutical Laboratories Inc., with offices in Arlington, Corpus
Christi and Harlingen, Texas, specializes in the development,
manufacturing and marketing of liquid nutritional products.
Pharmaceutical Laboratories Inc. is listed on the OTC Bulletin Board
under the symbol PHLB.
Contact: George Baucom, Investor Relations, 800/856-7040
3117 Cabaniss Pkwy, Corpus Christi, Texas 78415 or visit the Company's
Web site at phlb.com
Safe Harbor Statement under the Private Securities Litigation Reform Act
of 1955: Statements in this news release looking forward in time involve
risks and uncertainties, and actual results may be materially different.
Factors that could cause actual results to differ include activity
levels in the securities markets and other risk factors such as customer
order rates, cancellations, late delivery of customer components,
production delays, dependence upon certain customers, dependencies upon
key executives, viability of quarterly results, single operating
facility, competition, product liability risk, control by management,
foreign currency fluctuation and other risks detailed in the Company's
applicable SEC filings. |
