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Technology Stocks : Barringer technology (barr) -- Ignore unavailable to you. Want to Upgrade?

To: Jon Tara who wrote (592)	8/24/1998 12:37:00 PM
From: LJ	Read Replies (1) \| Respond to of 652

Barr authorized a share buy back, but have they initiated it yet? Seems like now would be a good time.

To: Jon Tara who wrote (592)	9/3/1998 10:57:00 PM
From: Jon Tara	Read Replies (2) \| Respond to of 652

I spoke with Richard Rosenfield today, and inquired about the marketable securities on the balance sheet. He replied that they consist of high-quality debt instruments "GNMA, FNMA, and the like". I feel comfortable, then, treating this as cash. (And in the current market environment for both the stock market and debt, this could appreciate significantly, to boot.) With 21M in cash, and 17M in marketable securities, as of June 30, then, the company has $4.50/share in cash and high quality debt instruments (fully diluted). If they could complete the buyback at an average price of $6.50, they would use 6.5M of the cash for that, leaving 31.5M. This would give the company $4.23/share in cash, while reducing common shares outstanding by 12.5% (and presumably the float by considerably more), and fully diluted shares by 8.something percent. Based on this, and the fact that the company IS profitable (though profits slowed-down significantly in the last quarter), I'd judge this the downside to be extremally limited from here. :) In addition to ongoing sales, the company has an agreement with the FAA to develop a prototype baggage-inspection system using their IonScan technology. I beleive it would be the only such device to actually detect explosive substances. (Other baggage scanning devices use visual scanning techniques, x-rays, etc.) In addition, I would presume that the machine could be made considerebly less bulky than the present bulk baggage-inspection devices. The impasse between the FAA and the airlines that is keeping the current undeployed Invision equipment locked-away in warehouses is the size of the equipment. The airlines don't want to use their valuable floor space for the equipment, and are involved in a protracted series of squabbles over where to locate this bulky equipment. (Of course, this could be easily dealt with by an executive order, but perhaps the FAA would prefer to use equipment that will keep everybody happy.) So, for $6 and change you get: - $4.50 in cash - A profitable onging business in the IonScan equipment, which generated $1.00 in earnings over the past 4 quarters - A speculative shot at the bulk baggage handling business, while being paid by the FAA to do the development work One way of looking at it is that you are getting the company for cash (4.50), 1.75X the past 4 quarters of earnings ($1.00), and getting a speculative shot for free. The whole sector is cheap, cheap, cheap, but Barringer is particularly attractive at these prices due to the cash, which is going to be AWFULLY important if we are heading into a bear market.