Client Updates

Alpha Pro Tech is a leader in protecting people and environments. APT develops, manufactures and markets innovative disposable protective apparel products for the industrial, clean room, medical, dental and food service markets and its Alpha Pro Tech Engineered Products division manufactures and develops a line of construction weatherization products including house wrap, roof underlayment and mold resistant framing sealant. APT products are utilized by some of the largest names in pharmaceutical and semiconductor sectors. Its Engineered Products division sells proprietary and technologically superior products to the construction industry.

Update: Both Major Weatherization Products Are Now ICC-ES Certified

Engineered Products has been awarded a vendor number to provide a large national building and home improvement chain with its RexSynfelt® roof underlayment product. The product began shipping during the first quarter of 2008. Its house wrap product has received the International Code Council-Evaluation Service (ICC-ES) approval, which is required by many construction supply companies, as well as builders and architects to sell the product. This approval, along with the ICC-ES approved REX Synfelt™ synthetic roof underlayment product, paves the way for delivering Alpha Pro Tech’s weatherization product packages throughout the construction industry.

Net sales for the fourth quarter ended December 31, 2007 decreased 24.5% to $8.0 million from $10.5 million in the comparable quarter in 2006. Net sales for the full year ended December 31, 2007 were $35.5 million, a decrease of 5.1% compared to net sales of $37.3 million last year. Net income for the quarter was $457,000, or $0.02 per basic and diluted share (based on 25.6 million shares) compared to net income of $1.1 million, or $0.04 per basic and diluted share (based on 24.3 and 25.3 million shares, respectively) for the fourth quarter of 2006. Net income decreased 35.4% for the full year 2007 to $2.4 million, or $0.10 and $0.09 per basic and fully diluted share, respectively (based on 25.3 and 25.6 million shares, respectively) compared to net income of $3.7 million, or $0.15 per basic and fully diluted share (based on 24.1 and 25.1 million shares, respectively) for the same period last year. The balance sheet remained strong with a current ratio of 12.72 to 1 and no debt. During 2007, the Company repurchased 0.6 million shares of its common stock and retired the stock as it has done to a total of 2.9 million shares since 1999 through seven repurchase authorizations.

American Software develops, markets and supports a comprehensive portfolio of integrated business applications to global corporations. These include enterprise-wide supply chain management, Internet commerce, financial, warehouse management and manufacturing packages for both brick-and-mortar and e-business firms. American Software also owns 88% of Logility, Inc. (NASDAQ:LGTY), a leading supplier of collaborative value chain planning solutions via the Internet. The Company derives 50% of its revenue base from ERP (with an installed customer base of 200 customers), and 50% from Logility Supply Chain Planning (with an installed customer base of 1,100 customers).

Update: Company Reports 28th Consecutive Quarter of Profitability and Positive Operating Cash Flow

Total revenues for the third quarter 2008 ended January 31, 2008 were $22.1 million, an increase of 3% over the third quarter of fiscal 2007. Operating earnings for the quarter were approximately $1.6 million which includes, a decrease of 47% compared to operating earnings for the third quarter of fiscal 2007. Operating earnings included a non-cash write-down of capitalized software development costs of $1.2 million. Net earnings were approximately $1.1 million or $0.04 per fully diluted share for the third quarter of fiscal 2008 compared to $2.5 million or $0.10 per fully diluted share for the same period last year. Total revenues for the nine months ended January 31, 2008 were $67.4 million or a 9% increase compared to $61.9 million for the comparable period last year. For the nine months, the Company reported operating earnings of approximately $6.9 million, a 7% increase compared to operating earnings of $6.4 million for the same period last year. Operating earnings for the nine months included a non cash write-down of capitalized software development costs of $1.2 million. Net earnings were approximately $5.6 million or $0.21 per fully diluted share for the nine months ended January 31, 2008 compared to $5.6 million or $0.22 per fully diluted share for the same period last year. The overall financial condition of the Company remains strong, with cash and investments of approximately $74.9 million and no debt as of January 31, 2008. This is an increase in cash and investments of approximately $5.0 million compared to January 31, 2007. The Company’s Board of Directors declared a $0.09 dividend.

Arabian American Development Co. is a leading provider of specialty petrochemicals. The Company’s specialty chemical subsidiary, South Hampton Resources, owns and operates a 97 acre petrochemical facility in southeast Texas. The Company’s products are sold exclusively as intermediate components to manufacturers competing in various markets such as expandable polystyrene (Styrofoam), polyethylene, adhesives, building foams, synthetic rubber and food processing. Arabian American Development Co. is the vendor of choice for the industry with approximately 60% of the North American market share for C5 solvents (expanding agents). The Company is also a leader in the production of C6 solvents, which are typically used in adhesives, rubbers, and flow enhancers. The Company holds ownership and rights for the Al Masane mine in Saudi Arabia that when put into production are expected to produce significant quantities of copper, zinc, gold, and silver; it also owns approximately 55% of the capital stock of a Nevada mining company, Pioche-Ely Valley Mines, Inc.

Update: Company Reports Revenues Up 32.1% for 4Q 2007, Receives TCEQ Permit

The Company reported revenue for the fourth quarter of fiscal 2007 of $29.8 million, an increase of 32.1% compared to revenue of $22.6 million in the fourth quarter last year and a 6.2% sequential increase compared to revenue of $28.0 million in the third quarter of 2007. Net income was $576,000, or $0.03 per basic and fully diluted share compared to net income of $2.0 million, or $.09 per basic and fully diluted share for the fourth quarter 2006.

For the year ended December 31, 2007, the Company generated revenue of $108.7 million, an increase of 10.3% compared to revenue of $98.5 million for the prior period. Net income was $7.8 million, or $0.34 per basic and $0.33 per diluted share compared to net income of $7.9 million, or $.35 per basic and $0.34 per diluted share last year last year.

The Company received a permit from the Texas Commission on Environmental Quality for its facilities expansion to double C5 & C6 capacity. These products generate approximately 85% of the Company's revenue. Full utilization of the expansion is expected to double revenue and EBITDA opportunity for the Company. Projected start-up date is late May or early June.

In addition, the Al-Masane Al-Kobra Mining Company (ALAK) joint venture received the commercial license from the Saudi Arabia Ministry of Commerce, which enabled the joint venture to contract with construction companies, prepare for the transfer of mining assets and appoint independent auditors. Formal application to transfer the mining lease to ALAK was filed with the Saudi Arabia Ministry of Petroleum and Mineral Resources in February 2008.

The Company’s Common stock began trading on The Nasdaq Global Select Market under its current stock symbol, ARSD, on January 29, 2008. Company management rang the Nasdaq closing bell on February 1, 2008.

AXS-One is a leading provider of high performance Records Compliance Management (RMC) software solutions. For almost 15 years, AXS-One’s proven archiving and electronic records management software has been used by major organizations worldwide, including leading Financial Services companies, to address their requirements for regulatory compliance, corporate governance and legal discovery while reducing their costs and delivering measurable ROI. The AXS-One Compliance Platform™ enables organizations to significantly reduce the risk and cost of managing growing volumes of disparate electronic records, including e-mail and instant messages, reports, file systems, SAP output, desktop documents, images and other digital records. By providing a single, scalable archiving platform, all records are managed according to corporate records policies from initial capture and indexing through archiving, retention, search and ultimate destruction. AXS-One’s robust legal case management tools let users respond quickly and accurately to the growing pressures of regulatory audits, e-discovery and litigation support.

Update: Enters 2008 from a Position of Strength Due to Sales Pipeline and Momentum

Sales of license revenues increased by 73% in fourth quarter 2007 compared to the fourth quarter of 2006 and more than doubled sequentially compared to the third quarter of 2007. Due to the release of Version 3.7 of AXS-One’s Compliance Platform, the Company entered 2008 from a position of strength in terms of sales pipeline and momentum. Total revenues for the fourth quarter of 2007 were $3.2 million, or 28% from $2.5 million in fourth quarter 2006. The net loss from continuing operations was $4.1 million for the quarter, or $(0.11) per diluted share compared to a net income of $13.6 million in the fourth quarter of last year, or $0.39 per diluted share. Net income for the fourth quarter of 2006 included a gain of $17.2 million related to the sale of the Enterprise Financials product line, and $0.9 million of net income from the results of the Enterprise Financials business during the 2006 period prior to its sale. For the year ended December 31, 2007, total revenue was $11.9 million, up 16% compared with total revenues of $10.3 million for the year ended December 31, 2006. The net loss from continuing operations was $14.9 million, or $(0.42) per diluted share compared to a net income of $5.5 million, or $0.16 per diluted share for the prior-year period. Net income for 2006 included a gain of $17.2 million related to the sale of the Enterprise Financials product line, and $7.9 million of net income from the results of the Enterprise Financials business during the 2006 period prior to its sale. AXS-One and RenewData, a leading provider of e-discovery and electronically stored information risk management (ESIRM(TM)) services, agreed to deliver a complete offering for enterprise-class proactive litigation readiness.
 

BSQUARE is a solutions provider to the global embedded device industry, including smart phones, PDAs and other electronics. BSQUARE’s teams collaborate with smart device makers at any stage in their device development with the goal of delivering quality, lowering project risk and accelerating time to market. BSQUARE’s solution portfolio includes software and hardware development, systems integration services, reference designs, board support packages, middleware, and applications. As a full service provider, device makers can also license BSQUARE’s best-in-class software products and operating systems. Since 1994, BSQUARE has completed hundreds of successful projects and has become a trusted partner to smart device makers worldwide. BSQUARE’s diversified, blue chip customer base includes Advanced Micro Devices, Fujitsu, Hewlett Packard, Microsoft, Mitsubishi Electric, Motorola, NEC, Siemens and Texas Instruments.

Update: Ninth Consecutive Quarter of Year-Over-Year Revenue Growth

The Company reported its ninth consecutive quarter of year-over-year revenue growth, fifth straight profitable quarter and fifth consecutive quarterly increase in cash and marketable securities. Total revenue for the quarter was $15.6 million, up 11% from $14.1 million in the prior year. Total revenue for fiscal 2007 was $59.4 million, up 19% from $49.8 million in 2006. The company reported net income for the quarter of $1.2 million, or $0.12 per diluted share, up 70% compared to net income of $706,000, or $0.07 per diluted share, in the prior year. For fiscal 2007, the company reported net income of $2.8 million, or $0.27 per diluted share, compared to a net loss of $466,000, or ($0.05) per share, in 2006. The company’s cash, cash equivalents and short-term investments increased to $15.0 million at December 31, 2007 as compared to $11.1 million at December 31, 2006 ($1.1 million of the December 31, 2007 balance was restricted).

This included the first revenue from BSQUARE’s acquisition of the Adobe Flash technology consulting and distribution business from NEC Corporation of America. BSQUARE also completed several agreements with Texas Instruments to provide support for TI OMAP processors.
 

With more than 15,000 customers, CAM Commerce designs, develops, markets and services highly integrated retailing and payment processing solutions for small to medium size traditional and eCommerce businesses based on the company’s open architecture software and branded point of sale offering, X-Charge. These integrated solutions include inventory management, point of sale, accounting, credit and debit card processing, Internet sales, gift card, customer loyalty programs, and extensive management reporting including its proprietary, lead product, X-Charge. The X-Charge payment processing services are provided on a transaction-based business model. X-Charge provides merchants with a fast and secure payment-processing platform that can be used by any Windows-compatible personal computer. Merchants can use X-Charge as a stand-alone credit card terminal or integrate it with existing POS (Point of Sale) applications. X-Charge software eliminates the need for two transactions when processing a credit card thereby speeding up the POS transaction, and integrates Gift Cards for even the smallest retailer.

Update: First Fiscal Quarter 2008 Net Income Increases 75%

For the first quarter, CAM Commerce Solutions reported that net income increased 75% to $1.7 million, or $0.39 per diluted share, for the three months ended December 31, 2007, from $0.9 million or $0.23 per diluted share, for the same quarter in the prior fiscal year. Revenue for the first fiscal quarter 2008, ended December 31, 2007 increased 37% to $9.8 million, from $7.2 million for the corresponding quarter of the prior fiscal year. Pre-tax profit margins in the quarter were a first quarter record 28%, compared to 21% for the first quarter of fiscal 2007. Pre-tax profit was $2.7 million, which was also a company record and was up 85% from the same quarter of last fiscal year.

The higher margins are primarily the result of a continuing change in revenue mix to higher margin, recurring X-Charge payment processing revenues. X-Charge revenues grew 67% during the quarter to $5.8 million, from $3.5 million for the same quarter of last fiscal year, and brought total recurring revenue, which includes support revenue, to a record 74% of total revenues, as compared to 68% for the comparable period of last fiscal year. During the quarter, the company installed 1,581 new X-Charge payment processing accounts. As of December 31, 2007, the company had more than 13,500 merchant accounts generating X-Charge revenues. The company's payment processing portfolio currently represents approximately $4 billion in annual credit card transaction volume on a go forward basis.

The Board of Directors declared a dividend of $0.31 per share based on fiscal 2008 first quarter results. This is a 72% increase, compared to the $0.18 per share dividend previously paid based on the results of the same quarter in the prior fiscal year. The company's cash and cash equivalents plus marketable securities during the quarter increased to $28.6 million, or $6.96 per outstanding share.

Capital Senior Living is one of the nation's largest operators of residential communities for senior adults. The Company's operating philosophy emphasizes a continuum of care, which integrates independent living with assisted living and home care services, to provide residents the opportunity to age in place. The Company operates 64 senior living communities in 23 states with an aggregate capacity of approximately 9,500 residents, including 37 senior living communities which the Company owns or in which the Company has an ownership interest and 24 leased communities as well as three communities it manages for third parties. The U.S. Bureau of Census estimates the number of Americans over 65 will surpass 78 million by 2030. The elderly population of 75+ years and 85+ years in the U.S. is 16.6 million and 4.4 million respectively. Both groups are expected to double by 2030, driving strong ongoing demand for CSU’s services.

Update: 2007 Revenues Increase 19% to $189 Million

For the fourth quarter ended December 31, 2007, the Company reported revenue of $48.2 million, compared to revenue of $43.0 million in the fourth quarter of 2006, an increase of approximately $5.2 million or 12 percent. Excluding the transaction costs for the Hearthstone acquisition, which the Company terminated in February of 2008, and normalizing the effect of the real estate tax adjustments, adjusted EBITDAR for the fourth quarter of 2007 was approximately $14.9 million, an increase of 25 percent from $11.9 million in the fourth quarter of 2006. Adjusted EBITDAR margin was 30.9% for the period, a 320 basis point improvement from the comparable period of the prior year. The Company reported net income of $1.3 million, or $0.05 per diluted share, in the fourth quarter of 2007 versus net income of $0.8 million, or $0.03 per diluted share, in the fourth quarter of 2006. For the 2007 fiscal year, the Company generated revenues of $189.1 million compared to revenues of $159.1 million in the prior year, an increase of approximately 19%. Reflecting the adjustments noted above, adjusted EBITDAR for 2007 was $55.3 million, an increase of $14.8 million or 37% from $40.5 million reported in 2006. Adjusted net income was $5.2 million or $0.20 per diluted share and adjusted cash earnings were $16.5 million or $0.62 per diluted share. The Company agreed to expand the size of its Board of Directors in order to add two new directors. In addition, the Company’s Board formed a Special Committee to actively explore and consider for recommendation to the Board strategic alternatives for Capital Senior Living to enhance shareholder value. Capital Senior Living terminated its previously announced agreement with Hearthstone Senior Services, L.P. to acquire interests in 32 leases with a healthcare REIT. Based on due diligence and lease negotiations, the transaction did not create demonstrable value for the Company’s shareholders.

Conmed Healthcare Management provides correctional healthcare services to detention centers and correctional facilities in 30 counties in five states, including Maryland, Virginia, Kansas, Oregon and the State of Washington. Its correctional healthcare services include general healthcare services, acute care services, surgical services, laboratory services, IV therapy, EKG's, diagnostic imaging/radiology, dialysis services, durable medical equipment, hospital services, mental health services, pharmacy, physical and occupational therapy, and dental services. Conmed is a niche healthcare services provider with a fully recurring revenue model, with no Medicare or insurance exposure and no bricks and mortar.

Update: Q4 Revenues Increase Over 34%, Acquisition Expands Footprint in Pacific Northwest

Net revenue for the three months ended December 31, 2007 increased 34% to $7.6 million from $5.7 million in last year's comparable period, and was 9% higher compared to the fiscal third quarter. The net loss was $393,000, or $(0.03) per basic and fully diluted share compared to a pro-forma loss of $336,000 last year. Conmed was a private Company last year, and as such earnings per share information is unavailable. For the fourth quarter, adjusted EBITDA was $319,000.

Pro-forma results for the year ended December 31, 2007 showed net revenues increased 55.4% to $26.1 million from $16.8 million. The net loss was $1.8 million or $(0.18) per basic and fully diluted share compared to a pro-forma loss of $1.7 million last year. The Company generated approximately $1.7 million in operating cash flow since the acquisition of Conmed, Inc. on January 26, 2007.

During the quarter, Conmed acquired, for cash and stock, nine healthcare service contracts with six counties in Oregon currently being serviced by Emergency Medicine Documentation Consultants, P.C. EMDC. As of Dec. 31, 2007 the Company had entered into agreements with 25 county governments to provided medical and healthcare services to county correctional institutions. The majority of these contracts are for multiple years and include option renewal periods which are, in all cases, at the county’s option, with terms varying from one to nine years. These medical service contracts have potential future service contract revenue of $124 million as of December 31, 2007, with a weighted average term of 5.7 years, of which approximately $103 million relates to the option renewal periods. Subsequent to the year end, the Company signed a new $18 million, five-year full-service agreement with the Chesapeake, VA Sheriff's Office Jail, which is expected to contribute $3.6 million annually. 

Document Capture Technologies, Inc., formerly Sysview Technology has been involved in the secure imaging market for over seven years and is a world-wide leader in the design, development, manufacturing, and sale of USB-powered mobile page-fed document capture solutions. DCT provides more than 20 different products across five distinct categories, which are distributed globally through private label solutions to leading Tier 1 OEM’s, VAR’s and other system integrators, such as CardScan, Visioneer, and Pentax. With the proliferation of paper-to-digital green initiatives, high security demands and accelerated financial transactions (a la Check 21 legislation), the demand for innovative ways to digitally capture, authenticate, store, share, and manage information is clear and DCT is well-positioned for continued future growth.

Update: Management Changes Realign Responsibilities with Company's New Focus

David P. Clark, the Company's Chief Investment Officer, was named CEO and William Hawkins, the Company's Chief Operating Officer was named President, in addition to retaining his COO duties. Darwin Hu, who has served as the President, CEO and Chairman since the Company's merger with Syscan, Inc. in April 2004, will remain Chairman of the Board of Directors. Net sales for the fourth quarter ended December 31, 2007, were $3.9 million, an increase of 15.0%, compared to $3.4 million in net sales for the fourth quarter of 2006. Gross profit was $1.4 million, or 35.7% gross margin, compared to gross profit of $1.1 million, or 33.9% gross margin for the fourth quarter of 2006. Net income for the quarter was $164,000 compared to a net loss of $(4.3) million, for the fourth quarter last year. For the year ended December 31, 2007, net sales were $15.0 million, an increase of 20.5% compared to $12.5 million in net sales for the same period last year. Gross profit was $5.9 million, or 39.3% gross margin compared to gross profit of $4.2 million or 34.1% gross margin. Net loss for the year ended December 31, 2007 improved to $(1.1) million compared to a net loss of $(5.2) million for the same period last year. The Company had cash and cash equivalents of $1.8 million, working capital of $3.0 million, and a current ratio of 2.1 to 1 at December 31, 2007. DCMT experienced year over year comparative quarterly sales growth for seven of the last eight quarters. Management exercised over one million founders’ options reflecting confidence in the strength of the Company’s business, outlook, and the value they see in its shares at current market prices. The Company successfully launched four new products in 2007. In 2008, the Company expects revenues  in the range of $18 million to $19 million, gross margin relatively steady in the 38%-40% range and non-GAAP adjusted EPS (excluding derivative and options expenses) in the range of $0.13 to $0.15 per diluted share.

Document Security Systems, Inc. is a recognized leader in the anti-counterfeiting and authentication industries, protecting personal identification, vital documents, and critical information from unauthorized or illegal scanning, copying, and digital imaging. As the provider of state-of-the-art security technologies, Document Security Systems is focused on opportunities to provide customized document protection solutions for organizations, companies, and governments around the world. The Company’s technology suite can be delivered on paper, plastic or via the Internet, providing the most secure forms of protection against document theft, counterfeiting, and fraud. Counterfeiting and brand fraud has become a world-wide epidemic, going far beyond checks and currency to include all sorts of printed materials including pharmaceutical packaging, consumer products, financial documents, vital records management, supply chain systems, and government identification cards. Concerns like homeland security, tighter restrictions on immigration and identity theft are putting an increased emphasis on protecting original documents and validating the pedigree of government identification instruments.
 

Update: Company's Patent Validated in Netherlands

The District Court of the Hague in the Netherlands, ruled that the ECB failed in its bid to invalidate the Company’s European Patent in the Netherlands. The judgment is the result of a hearing held on December 12, 2007. This ruling substantiates the value of DMC's intellectual property portfolio and clears the path for infringement proceedings to begin in the Netherlands.

Document Security Systems elected Robert Fagenson as Chairman of the Board of Directors and Lead Independent Director. He replaced Patrick White as Chairman of the Board. Mr. White retains his position as Chief Executive Officer.

Revenue from continuing operations for the fourth quarter of 2007 was $1.7 million, a 28% increase over $1.3 million in the fourth quarter of 2006. Gross profit from continuing operations during the fourth quarter increased 27% to $810,000. The net loss was $2.2 million, or $0.16 per basic and diluted share, compared with a net loss of $1.4 million, or $0.11 per basic and diluted share in the year-ago period. Revenue from continuing operations for the full year of 2007 was $6.0 million, up 39% over revenue from continuing operations of $4.3 million in 2006. Gross profit from continuing operations for 2007 increased 57% to $3.1 million, or 52% gross margin compared with $2.0 in 2006 or 46% gross margin in 2006. For full year 2007, net loss was $7.0 million, or $0.51 per basic and diluted share, compared with a net loss of $4.8 million, or $0.37 per basic and diluted share, during 2006. During the fourth quarter 2007, the Company secured access to credit facilities of up to $3.6 million over the next two years in order to satisfy potential cash requirements during 2008 and beyond.

Document Security Systems made continued progress surrounding its intellectual property position including a new patent issued in Europe. The company now has 9 patents covering a wide-spectrum of anti-counterfeiting products and technologies.

Glowpoint is a premiere broadcast-quality, IP-based managed-video services provider exclusively focused on high-quality, two-way video communications that offers video conferencing, bridging, technology hosting, and IP-broadcasting services. Clients range from large Fortune 100® enterprises to small and medium-sized businesses. Glowpoint’s managed-video services are available bundled with Glowpoint’s quality-network offering or as a value-added managed-video service across other networks. Glowpoint has one patent and eight patents pending. Average length of customer engagement is 3.25 years (excluding new customers in the last six months).
 

Update: Reports Record Revenues of $22.8 Million for 2007 

For the quarter ended December 31, 2007, total revenue increased $0.5 million, or 10.5%, to $5.5 million from the fourth quarter of 2006. Net income attributable to common stockholders was $6.9 million or $0.15 per basic and diluted share in the fourth quarter of 2007 compared to a loss of $(1.3) million or $(0.03) per basic and diluted share in the fourth quarter of 2006. The primary components of the decrease in the net loss attributable to common stockholders was a decrease in the Company’s common stock price which caused a decrease in derivative liabilities and a reduction of the derivative liability related to the Convertible Notes as a result of the amendment of the related Registration Rights Agreement which eliminated the liability.

For the year ended December 31, 2007, revenue increased $3.3 million, or 16.8%, to $22.8 million from $19.5 million in the 2006 year. Gross profit for the 2007 year increased 27.9% to $7.6 million from $5.9 million in the 2006 year. Gross margin as a percentage of sales was 33.3% for the 2007 year compared to 30.4% in the 2006 year. Net loss attributable to common stockholders was $(4.9) million or $(0.11) per basic and diluted share for the 2007 period compared to a loss of $(11.1) million or $(0.24) per basic and diluted share in the same period last year.

The Company realized the highest year-over-year growth in its core revenue at 20.6% for the 2007 year and also achieved its highest single month of multi-point bridging revenue of $0.3 million in fourth quarter 2007. In 2007 over 50% of Glowpoint’s new contracts were multi-year agreements, helping to ensure a stable revenue base from which it can grow. In addition, Glowpoint began generating revenue during March 2008 from its agreement to provide a branded managed service offering for Polycom who selected Glowpoint as a Global Provider of its branded Video Network Operations Center (VNOC) service offering late in 2007. The Company started driving revenue related to VNOC services in February and landed its first deal for monthly recurring VNOC services in March. The Company expects 30% core revenue growth in 2008.

Another Top 100 law firm selected Glowpoint to provide multi-point video services for the video systems at the law firm’s 17 locations around the world.

Iteris is a leading provider of traffic vision systems and vehicle sensors that enhance driver safety and optimize the flow of traffic. Iteris’ solutions provide innovative solutions for the Intelligent Transportation Systems (“ITS”) market. The Company’s vision-based sensors are an important new safety solution to the automotive and commercial truck markets that make it a market leader in intersection control systems. Iteris’ AutoVue™ lane departure warning (LDW) system (a safety product which addresses the leading cause of passenger fatalities) is the first such product in the market. Iteris’ LDW system is commercially available on three Infiniti platforms (the M35 and M45 and the FX45) and is certified on 19 of 21 heavy truck original equipment manufacturers. To date, 39 U.S. heavy truck fleets have selected the Iteris LDW system representing an estimated 19,000 vehicles. Testing of LDW systems continues with an additional 65 heavy truck fleets estimated to represent more than 134,000 vehicles. Iteris’ sales of LDW units to the heavy truck market increased 35.6% for the fiscal year 2006 including a 475% increase in the North American aftermarket. In the traffic infrastructure segment, the Company’s Vantage™ products are the leaders in the emerging market for vision-based traffic intersection control systems, providing a more reliable, flexible and easy-to-use solution than the traditional vehicle detection technology: in-pavement “inductive loops.” According to a report by Global Industry Analysts, the total worldwide market for ITS was approximately $6.6 billion in 2003 and is projected to grow at a CAGR of 15.8% through 2010.

Update: Company Retires Total of $2.1 Million of Debt in February 2008

Strong operating income performance and positive operating cash flow over the past several quarters allowed Iteris to pay down borrowings under its line of credit with the early retirement of a total of $2.1 million in convertible debentures in February 2008. This included $1.1 million in convertible debentures for $935,000, saving the Company $165,000 in principal and approximately $66,000 in future interest payments and the early retirement of an additional $1.0 million in convertible debentures for $850,000, saving the Company $150,000 in principal and approximately $60,000 in future interest payments.

For the quarter ended December 31, 2007, Iteris reported net sales and contract revenues of $15.4 million, or an increase of 6.0% compared to net sales and contract revenues of $14.5 million reported in the same quarter of 2006. Gross margin improved to 42.3% for the quarter compared to 39.2% in the same quarter of 2006. The Company reported operating income of $1.1 million and net income of $954,000, or $0.03 per share compared to operating income of $751,000 and net income of $310,000, or $0.01 per share, in the same quarter of the prior fiscal year.  

In December, the Company announced that Nissan Infiniti's Lane Departure Prevention (LDP) feature, based on Iteris' advanced lane tracking technology, was recognized by Cars.com as one the best new features that debuted in 2007. Iteris has been awarded contracts in Utah and Las Vegas and has introduced the first Safety Direct™ system for the heavy truck market, which analyzes real-time lane departure warning (LDW) data captured by Iteris’ LDW system.

The Company also released the latest addition to its Vantage(TM) family of video detection systems, VersiCam™, which combines Iteris' proven video detection algorithms and imaging technology into one, easy to use integrated camera and processor system.

Jacada is a leading provider of business process optimization solutions at the desktop designed specifically for in-bound call center operators. Its Workspace and Fusion products enable call center customers to rapidly deploy a new interface that connects disparate systems on the call center agent’s desktop. The results include significantly reduced average agent call handle time and an increased ability for the agent to cross-sell additional products and services. Jacada has partnered with the leading call center outsourcers, infrastructure providers, and systems integrators to co-market and/or distribute its products. Jacada has more than 1,200 customers worldwide including many Fortune 1000 corporations and government organizations, including Vodafone, Capita, Lillian Vernon, Cox Communications, Harrahs, and Central Hudson and Gas. Partners include IBM Global Services, Accenture, Avaya and West Corporation. 
 

Update: Call Center Revenue Grows 137% in Q4 2007, Jacada Increases 2008 Revenue Guidance to $20-22 Million

For the fourth quarter, Jacada’s total reported revenues from continuing operations rose 137% to a record $6.15 million compared to $2.6 million in the fourth quarter of 2006. Total GAAP gross profit was $2.3 million or 37% gross margin, compared to $1.3 million and 52%, respectively, in last year’s fourth quarter. For the year ended December 31, 2007, call center revenues grew 57% to a record $13.3 million from $8.5 million in the fiscal year 2006. Gross profit was $5.8 million or 43% gross margin, compared to $4.4 million and 52%, respectively, in the fiscal year 2006.

Jacada’s year-end financials reflect the divestiture of its application modernization (legacy) business, which was sold prior to year-end and was classified as “Discontinued Operations.” The sale of this business was announced December 20, 2007 and closed on January 1, 2008, for gross proceeds of $26 million in cash, which includes approximately $3 million currently being held in escrow.

Revenue guidance for 2008 was revised upwards to $20-$22 million, which represents an increase of 50% to 65% year-over-year organic growth of call center business. Management expects this growth rate to be sustainable and expects that its operating loss will be reduced by approximately 50% in 2008 compared to 2007 and profitability will be reached in second half 2009.

The Company announced a $10 million share buyback authorization. It signed a material agreement with a large North American insurance company and also signed a contract extension with a large UK-based telecommunications company.

Numerex Corp. is a wireless machine-to-machine (M2M) communications, technology and solutions business. M2M is defined as electronic (wireless) data communications between people, devices and systems that turns data into actionable information. Over the past three years, as M2M has emerged as a robust and growing industry and Numerex has established a market leading position with fixed and mobile solutions including Uplink™, MobileGuardian™ and VendView™. In addition, Numerex delivers “private label” products and solutions that are available for distribution through VARs and OEMs. Numerex Networks supports these fixed and mobile solutions providing extensive digital and analog wireless network services and coverage in the Continental U.S., Canada, the Caribbean, and Mexico. Numerex recently acquired the assets of Airdesk which expands its current product offering within M2M to include radio modules used in wireless devices that may be connected to the Numerex Networks, enabling higher margin recurring revenue from utilization of the Numerex Network. Numerex also offers products and services for video and data collaboration, networking and wire line security. Numerex’ Airdesk division sells 150,000 wireless digital modules annually and is the global leader in Wavecom module sales. In addition, 35% of the modules sold connect to the Numerex Network, driving recurring revenue.

Update: Reports Record Revenues for the Quarter and Full Year 2007 Results

Numerex exceeded full year revenue estimates of $66 to $67 million for the full year posting $68 million reflecting 29% top line growth in a full year-over-year comparison. The Company also posted record revenues for the quarter of $22.7 million, reflecting year-over-year growth of 53% and sequential growth over third quarter of 42%. Pre-tax income of $1.4 million for the fourth quarter of 2007 and pre-tax income of $1.2 million for the full year of 2007 compare to a pre-tax loss of $(1.2) million for the fourth quarter of 2006 and pre-tax income of $1.2 million for the full year of 2006. The Company was profitable for the year while significantly expanding infrastructure and resources, successfully meeting the challenges of a major technology transition, introducing innovative new products and services, and working towards Sarbanes-Oxley compliance and an ISO certification. The Company formally unveiled a new brand identity that reflects Numerex's growing capabilities and depth in the M2M market. The rebranding initiative also introduces the concept of All-Terrain M2M(TM) to highlight the breadth of Numerex's network offerings that include GSM, CDMA, and Satellite connectivity. The recent acquisition of Orbit One's satellite network services positions Numerex as the best choice for a wide range of coverage options. Subsequent to the end of the first quarter, Numerex launched two new products for the M2M marketplace, the GPRSXpress and the FD-1000. The Company also added industry expert, Jeffrey O. Smith, PhD., to its Board of Directors.

Onstream Media is a leading online service provider of live and on-demand Internet video, corporate web communications and content management applications, including digital media services and webcasting services. The Company’s customers have included 78% of all Fortune 100 companies including America Online, Warner Brothers, Sony, General Electric, eBay, Dell, Intel and Nokia, among others. Ontream’s operations are comprised of two operating groups: Digital Media Services and Web Communications Services. Onstream Media has announced that it is a member of the Qwest Communications International team that has been awarded a stake in Networx Universal, the largest communications services contract in the world valued at approximately $48 billion over the next 10 years.

Update: First Fiscal Quarter 2008 Revenues Up 105%, Positive Cash Flow from Operations

Onstream recorded record first quarter 2008 revenue of approximately $4.5 million, up 104.7% from the first quarter of the 2007 fiscal year and up 8.6% sequentially compared to the Company’s fourth quarter of fiscal 2007. Excluding acquisitions, the Company’s first quarter revenues grew organically by approximately 20.9%, year-over-year. Gross profit margin as a percent of sales increased to 70.0% for the first quarter of fiscal 2008, compared to 61.3% for the first quarter of fiscal 2007 and compared sequentially to 65.1% for the fourth quarter of fiscal 2007. The net loss for the first quarter of fiscal 2008 was entirely due to non-cash items and as a result, the Company generated approximately $57,000 in positive cash flow from operations for the quarter ended December 31, 2007. The consolidated net loss for the quarter was approximately $(1.7) million, or $(0.04) loss per share (based on 42.1 million weighted average shares outstanding), as compared to a loss of approximately $(3.5) million, or $(0.21) loss per share (based on 16.6 million weighted average shares outstanding) for the prior fiscal year’s first quarter.

The Company reiterated expectation of 40% top-line growth for the fiscal year and continues to believe it will experience continued reductions in its non-cash net loss throughout the remainder of the fiscal year.

The Company entered into a line of credit arrangement with a financial institution under which it can borrow up to an aggregate of $1.0 million for working capital, secured by the Company’s accounts receivable. The Company launched iEncode™, a full-featured, turnkey webcasting solution that operates inside a customer’s corporate LAN environment.

Pro-Dex, Inc. is engaged in the design, development and manufacturing of electric, air and battery-powered rotary drive systems and related software for the medical device and dental industries as well as motion control software and hardware for industrial and scientific applications. Pro-Dex specializes in the design and production of devices utilizing a rapid, concurrent, manufacturing process that enables customers to get products to market faster and at a lower cost compared to alternative solutions. Key customers like Raytheon, Boeing, Delta Designs and Medtronic contract with Pro-Dex to rapidly develop and engineer components and medical/dental devices, and Pro-Dex retains long-term manufacturing agreements. As a result, Pro-Dex generates gross profit margins significantly higher than traditional contract manufacturers.

Update: Hires Experienced Engineering Executive, Signs Agreement with New Customer

ProDex hired a Vice President of Engineering with experience in the electronics and defense industries in both large and small organizations. It also entered into a Development Agreement with a new customer in the orthopedic market to develop a complete bone-cutting surgical drive system that will be integrated into the customer's proprietary clinical techniques. Revenue is estimated at $800,000 over the next 15 months. The Development Agreement also stipulates that Pro-Dex will be the exclusive manufacturer of the new product, with sales projected to begin in approximately May of 2009. As a result of this Agreement and other bookings, the Company's backlog remained strong at approximately $11.7 million as of December 31, 2007. Net sales for the second quarter ended December 31, 2007 were $6.1 million, an increase of 32% compared to $4.6 million in the second quarter of fiscal 2007. Gross profit for the quarter increased $988,000 or 73% to $2.4 million, or 38% gross profit margin, over gross profit of $1.4 million, or 30% gross profit margin, in the same quarter last year. Net income for the second quarter was $305,000 or $0.03 per basic and diluted share compared to a net loss of $(138,000) or $(0.01) loss per basic and diluted share for the second quarter last year. The Company completed the December 31, 2007 quarter with cash and cash equivalents of $220,000 compared to cash and cash equivalents of $403,000 as of June 30, 2007. Total working capital was $6.4 million as of December 31, 2007. Shareholders' equity increased 5.1 percent to $13.5 million from $12.9 million as of June 30, 2007.
 

Raser is an environmentally focused technology licensing and development company operating in two business segments: Raser’s Transportation and Industrial Technology segment focuses on using Raser’s Symetron™ technology to improve the efficiency of electric motors and other applications. Raser’s Power Systems segment is seeking to develop clean, renewable geothermal electric power plants and bottom-cycling operations, incorporating licensed heat transfer technology and Raser’s Symetron™ technology. Having secured geothermal resources in five states to date, Raser has developed a unique strategy for monetizing these assets with plans to build out 55 megawatts of production by the end of the third quarter of 2008 with plans to bring online 100MW of power per year for the next three years. Raser will develop and deploy its bottom-cycling Symetron™ technology in select areas, and will also seek to partner with energy companies to accelerate monetization. Under this scenario, Raser will exchange, 90% of the tax incentives and 90% of the energy revenue for 10 years in exchange for substantial fees and the development of the systems to monetize the energy assets. After 10 years and following the recapture of the capital expenditures by the monetizer, Raser will then receive 90% of the tax incentives and 90% of the revenues on a going-forward basis. In this way, Raser can accelerate monetization, minimize CapEx, generate substantial near-term revenues and maintain high gross profit margins.

Update: Company Inks Geothermal Development Financing Program with Merrill Lynch

Raser entered into a commitment letter with Merrill Lynch to set forth general terms relating to the structuring and financing of up to 155 MW of geothermal power plants that Raser intends to develop. It includes a financing commitment to provide non-recourse project financing for the construction of a 10.5 MW geothermal power plant in Nevada. The Company continued progress in developing its geothermal properties by recently initiating two additional projects, including a second 10 MW plant in Utah and the Company’s first 10 MW plant in Oregon, bringing Raser’s total current projects under development to seven, representing 70 -75 megawatts (MW) of power projects initiated since April, 2007. Geothermal power projects under development now include three projects in Nevada, two in Utah, one in Oregon and one in New Mexico. Raser also completed the drilling phase of a Utah geothermal production well and secured additional geothermal leases in Utah. The City of Anaheim has approved power purchase agreements for two of Raser’s planned geothermal power plants. Raser signed a business cooperation agreement with Hyundai Heavy Industries Co., Ltd. (HHI) and also with Pacific Gas & Electric.

Revenue for the fourth quarter was $117,860, up from $44,717 in the fourth quarter of 2006. For the year ended December 31, 2007, Raser reported $320,072 in revenue compared to revenue of $122,732 for last year. The reported net loss for the year was $15.7 million, or $0.29 loss per basic and fully diluted share, compared to a net loss of $18.5 million, or $0.36 loss per basic and fully diluted share, in the same period last year. The Company’s cash position as of December 31, 2007 was $5.9 million compared to $3.4 million as of December 31, 2006. Cash used in investing activities during the year was $6.7 million and the Company used $7.9 million in operating activities during the year. The majority of cash used for investing activities was for geothermal resource acquisitions and well-field development. Raser priced $50 million of Convertible Senior Notes due 2013 with an option to purchase up to an additional $5 million aggregate principal to cover over-allotments. The over-allotment option of 8% Convertible Senior Notes due 2013 was exercised.

Rural/Metro provides medical transportation and fire protection services to municipal, residential, commercial, and industrial customers in the United States. The Company has two primary operating businesses: The Medical Transportation and Related Services business provides emergency ambulance services to individuals through contracts with counties, fire districts, and municipalities. Additionally, the Company provides non-emergency ambulance services to individuals requiring advanced or basic levels of medical supervision during transport to treatment facilities, such as a nursing home resident visiting a doctor or kidney dialysis treatment center. Contracts are typically three to five years in duration with Rural/Metro having a strong record of contract wins and renewals. The Fire and Other Services business provides fire prevention, suppression and first responder medical care on a subscription-fee basis to residential and commercial property owners in three states and under long-term contracts with fire districts, industrial sites and airports at 16 sites located in 11 states. The Company is well-positioned based on favorable industry and market dynamics, as there is growing demand for ambulance services due to aging population and a trend toward hospitals outsourcing ambulance services. With a strong presence in high-growth markets with a significant elderly population, the Company generates predictable revenues and cash flow with a business model featuring significant recurring revenue.

Update: Company Generates Approximately $14 Million EBITDA in Second Fiscal Quarter

Net revenue for the second quarter increased 4.5% to $119.0 million, compared to $113.9 million for the same period in the prior year. Net income for the second quarter was $0.8 million, or $0.03 per diluted share, compared to net income of $1.3 million, or $0.05 per diluted share, for the same prior-year period. Second-quarter EBITDA from continuing operations was $13.9 million compared to EBITDA from continuing operations of $13.6 million for the same prior-year period. Consolidated net revenue for the six months ended December 31, 2007 increased 4.5% to $237.9 million, compared to $227.7 million for the prior year. Net income for the six-month period was $1.2 million, or earnings of $0.05 per diluted share, compared to net income of $3.0 million, or earnings of $0.12 per diluted share, for the same prior-year period. The Company reiterated its financial guidance for the fiscal year ending June 30, 2008, expecting EBITDA from continuing operations to be in the range of $50.0 million to $55.0 million and capital expenditures to be in the range of $13.0 million to $15.0 million. The Company entered into a multi-year renewal contract to continue providing exclusive 911 ambulance services in Jefferson County, Georgia. Along with its partner, the City of San Diego, San Diego Medical Services Enterprise (SDMSE), it was also named Business of the Year by the Del Mar, California, Regional Chamber of Commerce.

Strategic Diagnostics Inc. (SDI) is an antibody technology company; developing, commercializing and marketing innovative and proprietary biotechnology solutions that preserve and enhance the quality of human health. SDI’s antibody division supplies critical reagents used in the diagnosis of disease. The Company’s new Genomic Antibody Technology™ is gaining wide adoption in proteomic research, and drug/biomarker discovery among academic, biotech and large pharmaceutical customers. SDI’s industrial immunoassays represent state of the art technology for rapid, cost effective detection of food and water contaminants. SDI’s RapidChek® kits are the fastest growing method for the detection of pathogens like E coli, Salmonella and Listeria in the processing and manufacturing of food and beverages. SDI technology is also finding new applications in strategic emerging markets such as renewable fuel where the application of its patent pending phage technology is being developed to increase corn to ethanol profits through higher yields at a lower cost.

Update: Sixth Consecutive Quarter of Double-Digit YoY Revenue Increases from Antibody Technology (up 28%)

SDIX was selected as a key supplier to SAIC-F (Science Applications International Corporation – Frederick) and the National Cancer Institute for the development of a comprehensive portfolio of antibodies for use in cancer research. This is a long term development agreement to produce reference standard reagents to advance cancer research. During the quarter, SDIX added two new board members and also strengthened its management ranks with an executive experienced in the life and analytical science markets. The Company reported total revenues for the quarter ended December 31, 2007 of $7.3 million, an increase of 4% over the fourth quarter of 2006. Revenues for the 2007 fourth quarter were positively impacted by a 28% increase in sales of antibody products and 21% growth in the sales of food pathogen testing methods, in both cases as compared to the fourth quarter of 2006. Gross margins were 60.5% for the fourth quarter 2007 compared to 55.8% for the year-ago period. Pre-tax income for the fourth quarter of 2007 totaled $409,000, compared to $650,000 for the prior year's fourth quarter. Net income for the quarter was $166,000, or $0.01 per diluted share, compared to $491,000, or $0.02 per diluted share, in the fourth quarter last year.

Full-year total revenue increased 7% to $27.2 million versus $25.5 million for the same period in 2006. Gross margins were 60.4% for the full year 2007 compared to 54.1% for 2006. Pre-tax income for full year 2007 totaled $1.8 million, compared to $966,000 for the same period in 2006. Net income for full year 2007 was $860,000, or $0.04 per diluted share, compared to $684,000, or $0.03 per diluted share, for last year.

“Custom” Genomic Antibody Technology® (GAT) projects exceeded the $1 million dollar mark over the last seven months of 2007. The Company also commercialized three new lateral flow test strips for use in the quality control of non-GMO corn and corn-seed products.
 

U.S. Home Systems manufactures or procures, designs, sells and installs custom quality specialty home improvement products, exclusively marketing directly to consumers through the nationally recognized brand of The Home Depot® Kitchen and Bathroom Refacing and The Home Depot® Installed Decks. The Company's product lines include: Kitchen and bathroom cabinet refacing products, wood and composite decks and related accessories, closet and home organization systems, countertop products, and designer deck ceiling system. As of September, 2007, USHS’ home improvement operations exclusively served The Home Depot in 41 markets covering 26 states. Kitchen products are available in all 41 markets encompassing approximately 1,386 The Home Depot stores and 33 The Home Depot – Expo stores and bath products are currently offered in 16 markets which include approximately 523 stores, and our deck products are offered in 15 markets which include 525 stores. Over $250 billion is spent annually on remodeling in the U.S. and the industry has historically grown 5-7% per year since 1980.

Update: Company Extends Agreement with Home Depot Through 2011

USHS extended an agreement to supply home-improvement retailer Home Depot Inc. with bath and kitchen cabinets through February 2011. As part of the agreement, U.S. Home will stop selling wood deck products in select Home Depot markets, which will impact about $6 million in annual revenue to the Company. U.S. Home will phase out sales and installation of wood deck products in all Home Depot markets. The company will also begin offering its deck products in Northeast markets under its Designer Deck brand as it moves out of The Home Depot markets.

For the fourth quarter ended December 31, 2007 USHS reported revenues of $29.3 million as compared to $31.0 million in the fourth quarter 2006. The Company’s installation completions were lower resulting in a $1.7 million decline in fourth quarter revenues as compared to the prior year. The Company’s backlog of uncompleted orders was $24.0 million at December 31, 2007 as compared to $19.0 million at December 31, 2006. Gross profit was $14.8 million, or 50.5% gross margin compared to $16.7 million or 53.7% gross margin in the year-ago period. The loss in the fourth quarter from continuing operations was $434,000, or $(0.05) per share, as compared to income from continuing operations of $1.2 million, or $0.14 per share, for the same period last year. For the year ended December 31, 2007, revenues were $123.3 million as compared to $120.8 million in the same period last year. Gross profit for the full year was $64.5 million, or 52.3% gross margin compared to $63.8 million or 52.8% gross margin in the year-ago period. Income from continuing operations was $2.4 million, or $0.29 per share, as compared to $4.1 million, or $0.49 per share, respectively, in 2006. In August 2007 the Board of Directors authorized the repurchase of up to $5.0 million outstanding common shares. As of December 31, 2007 the Company had purchased 737,093 shares at a cost of approximately $5.0 and the Board authorized a new program for the repurchase of up to $2 million outstanding common stock in the open market.

Veri-Tek is a leading provider of engineered lifting solutions including boom trucks, rough terrain forklifts and specialized material handling equipment used in a wide variety of industrial applications. Its Manitex subsidiary designs and manufactures a comprehensive line of boom trucks and sign cranes, primarily used in industrial projects, energy exploration and infrastructure development, including roads, bridges, and commercial construction. Its Liftking subsidiary designs and manufactures a complete line of rough terrain forklifts and special mission oriented vehicles, as well as other specialized carriers, heavy haul handling transporters and steel mill equipment. Liftking's rough terrain forklifts are used in both commercial and military applications.

Update: 2007 Revenues Grow 163% to Over $106 Million, Exceeds Revised Guidance

Net sales grew 163% to $106.9 million for the year ended December 31, 2007 from $40.7 million for the full year of 2006, driven by full year revenue contributions from Manitex and Manitex Liftking. Gross profit for the year ended December 31, 2007 was $19.9 million, or 18.6% gross profit margin, compared to gross profit of $5.8 million or 14.2% gross profit margin for full year 2006, an improvement of 440 basis points. For the full year 2007, net income from continuing operations was $2.1 million, or $0.25 per basic and $0.23 per diluted share compared to $(0.5) million loss or a loss of $(0.10) per basic and diluted share in the same period of 2006. EBITDA increased 278% to $8.5 million for the full year 2007 from $2.2 million for the full year 2006.

Revenue for the fourth quarter increased 32% to $27.3 million from $20.7 million for the same period of 2006. Gross profit for the fourth quarter 2007 was $4.9 million, or 18.0% gross margin, compared to $3.0 million or 14.6% gross margin in 2006, an improvement of 340 basis points. For the fourth quarter 2007, net income from continuing operations was $0.7 million, or $0.07 per basic and diluted share compared to a loss of $(0.4) million, or $(0.06) per basic and diluted share in the same period last year. EBITDA for the three months ended December 31, 2007 was $2.0 million compared to $1.3 million in the same quarter of last year. Total indebtedness was reduced 32% to $25.0 million as of December 31, 2007 from $37.0 million at December 31, 2006. Foreign currency losses were reduced to less than $0.1 million in the fourth quarter through initiating a currency hedging program in early September 2007.

Select models in the company's Manitex product line joined the Manitex Liftking and Noble product lines as part of The Caterpillar Allied Vendor Program in Europe, and North and South America.
 

Winland Electronics is an electronic manufacturing services (EMS) company, providing product development and manufacturing expertise and innovation for more than 20 years. Winland also markets proprietary products for the security/industrial marketplace. Winland's product development offering includes program management, analog circuit design, digital circuit design, printed circuit board design and embedded software design. Winland differentiates itself from the contract manufacturer competition with its integrated product development and manufacturing services to offer end-to-end product launch capability, including design for manufacturability, design for testability, transition to manufacturing and order fulfillment. Winland's core competency is delivering time-to-market through superior program management, experience, integrated development processes, and cross-functional teams. Winland has maintained a long-term relationship with Select Comfort, and recently signed a new three year agreement with Select Comfort to manufacture approximately 50% of Select Comfort's electronics assemblies. Winland continues to expand their proprietary line of environmental sensors which generate higher margins and offer additional revenue expansion opportunities. The Company recently announced they have expanded the product sales into Europe, vastly expanding their geographic footprint.

Update: Winland Announces 2007 Financial Results and Launches Major Internal Restructuring

Net sales for the fourth quarter were $7.5 million, a decrease of 18.8 percent compared to $9.2 million reported for the fourth quarter of 2006. The decrease was primarily due to lower sales from Winland’s major customer, Select Comfort. Gross profit for the fourth quarter was $1.2 million, or 16.0 percent of sales, down from $1.5 million or 16.1 percent of sales for the fourth quarter of 2006. Fourth quarter net income was $7,000, or $0.00 per basic and fully diluted share, compared to net income of $51,000, or $0.01 per basic and fully diluted share for the same period last year. For the year ended December 31, 2007, net sales decreased 8.4 percent to $34.7 million from $37.9 million for the full year of fiscal 2006. Gross profit was $4.8 million, or 13.8 percent, compared to gross profit of $6.5 million, or 17.1 percent for the full year of fiscal 2006. The net loss was $(263,000), or $(0.07) per basic and fully diluted share compared to net income of $1.0 million, or $0.29 per basic and $0.28 per fully diluted share for the full year of fiscal 2006.

Winland restructured its manufacturing and operations departments to support more aggressive EMS growth objectives and also better align the company to its 2008 and 2009 initiatives in program management, supply chain management, quality management, and information systems. It hired a supply chain executive with both EMS and OEM experience to bring world-class supply chain management practices to Winland. It reorganized manufacturing and operations to improve production processes and quality, reduce waste, and better integrate new customers and new products into manufacturing. Subsequent to the year end, Winland introduced its new EnviroAlert EA800 wireless environmental monitoring solution. The product received the 2008 Security Industry Association (SIA) New Product Showcase Product Achievement Award in the Intrusion Detection and Prevention category at the ISC West 2008 tradeshow.

 

The Hayden Index

Average Increase In Client Stock Price Since Hayden Representation: 49%

 *New client  **Engagement ended in first quarter

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