a new MCAR or a new SNMM
News article received, Tuesday, April 20, 1999 11:53:17 AM EST
Analyst Continues ALYA Coverage, Reiterates 'Speculative Buy', $1 to $1.50 Target, Shortens to 6 to 12 Months in PAR Program
NEW YORK (April 20) BUSINESS WIRE -April 20, 1999--The following is an investment opinion issued by Public Analysis & Review (PAR):
(Investrend Research) Public Analysis & Review (PAR), the unique professional independent analyst program administered by the non-profit Investors Research Institute, Inc., and distributed by Investrend Research, announces that Gerald F. LaKarnafeaux, CFA, professional analyst qualified in the PAR program, who initiated coverage of ALYA International (OTCBB:ALYA) on September 23, 1998, has reiterated a 'Speculative Buy', a target of $1 to $1.50, and shortened the target period to 6 to 12 months.
The report follows. PAR has posted a downloadable report, including disclaimers which should be read before investing, at investrend.com .
Date of Report: April 20, 1999Shares Outstanding: 15,754,626 (fully diluted)Stock Price: $0.43Estimated Float: 6,333,814Latest 12 mo. Price Range: $.033 to $1.65Recommendation: Speculative BuyIndustry Sector: Building Control SystemsTarget Price (6-12 mos): $1.00 - $1.50 ALYA International, Inc. (OTCBB: ALYA), has developed and is currently
marketing a proprietary building access and control system that
utilizes a software protocol developed by Echelon Corporation named
LonWorksa. ALYA's ultimate success will be, in large part, the result
of an industry-wide acceptance of the LonWorksa open architecture,
which accommodates interoperability among building control systems. The
reader is referred to the ALYA International, Inc. research report
published on September 23, 1998, which describes "interoperability" and
its relevance to ALYA as a company and as an investment. This report is
available at investrend.com on the worldwide web. Additional
background information is available on the LonMark Interoperability
Association website, lonmark.org , and on the Echelon
Corporation website echelon.com . On April 6, the company released its financial results for the year
ended September 30, 1998. The conclusions to be drawn from the year-end
numbers are that (a) the company is still in the development stage and
(b) the company is still undercapitalized. Sales of $323,734 were nearly three times those of the prior year.
However, the sales level was still very modest when related to the
major cost categories. For example, Research and Development
expenditures were 1.6 times sales. General and Administrative
expenditures were 4.5 times sales. Clearly, the cost structure is
geared to a sales level substantially above the level reported. The
loss for the year of $2,222,430, was slightly below the loss reported
in the fiscal 1997. Profitability does not appear likely over the near
term. Losses in the current fiscal year are estimated to be running at
approximately $200,000 per month with little improvement anticipated
until the fourth quarter. Current sales levels are currently running below management's
expectations of six months ago. The lagging sales rate could be due, at
least in part, to installation delays that are caused by an installer's
inexperience with such a technologically advanced product. ALYA has had
to send technicians into the field to assist in the installation of new
systems. The product has recently been modified to eliminate the
necessity to provide such costly customer support ALYA has assembled a creditable international network of approximately
twenty distributors/integrators. Also, relationships have been
established with high profile partners such as Motorola, Honeywell,
Raytheon and others. ALYA is positioned to generate substantial sales
over the next twelve to eighteen month period. However, in order to
achieve a $15.0 million to $30.0 million sales level, as management has
projected in the past, the company must generate external equity
capital in the range of $2,500,000 to $5,000,000 over the next twelve
to eighteen months. This is not an impossible task as evidenced by the
history of resourceful money raising campaigns that management has
conducted in the past. Since the end of the fiscal year, approximately
$1,500,000 of capital has been raised through the sale of common stock
or software rights. We suspect that the issue will not be, can they
raise the money? It will be, at what cost in terms of dilution. ALYA is recommended as a speculative buy with the emphasis on
'speculative'. The stock is down fifty percent since our speculative
buy recommendation made last September. The surge in sales that we
anticipated early in the current fiscal year did not materialize.
Assuming this same allusive surge in sales does occur over the next six
to twelve months, we believe ALYA will trade in a target range of $1.00
to $1.50 per share. Gerald F. LaKarnafeaux, CFA, during the past 30 years, has held senior
positions in international and regional investment banking firms as a
securities analyst, portfolio manager and director of corporate
finance. Mr. LaKarnafeaux is a principal of the consulting firm,
KeyRatios, Inc. which assists early stage private and public companies
in the areas of corporate valuationa nd capital formation. He has been
an active member and officer of regional chapters of the Financial
Analyst Society, The Corporate Finance Council and the American Society
of Appraisers.
Previous announcements regarding PAR coverage have been made for AlphaTrade.com (EBNK), Scottsdale Scientific (STDS), American Alliance (AMRE), MedCare Technologies (MCAR), CorpHQ, Inc. (COHQ), Crys-Tel Telecommunications (CYSS), Virtuallender.com (VLDC), Cadapult Graphic (GRFX) Auto Network Group (ANWK), Starnet Communications (SNMM), BoysToys.com (GRLZ), and Planet City Software, Inc. (PINC).
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