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NetWork Installation
(OTC BB: NWIS); Born Last Year, and Ready to Soar Like an Eagle |
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Network Installation was out
with news after the close on Friday. The company announced the signing
of another new Wi-Fi installation contract, and disclosed 2003 year end
financial results.
Network is like the baby eagle
you see in the nest. As a public company it was born last summer. In the
second half of 2003, this bird experienced all the early growing pains
associated with being a new public company. NWIS reported a $2.4
million, one time, non cash loss related to start up costs.
The company also reported about $1.5
million in received and deferred revenues (money owed from ongoing contracts)
combined.
Since the first of the year, the
company has grown rapidly. The market generally looks ahead, and the stock
has appreciated admirably in conjunction with announcements of contracts,
acquisitions, and new technology offerings.
With the pain of birth behind the
company, NWIS has embarked on a rapid expansion program since turning
the corner to 2004. Here's an overview of expansion since the first of
the year:
-
Opened a new office in Las Vegas
-
Opened a new office in Los Angeles
-
Acquired Del Mar Systems in San Diego
(approximately $1 million in annual revs and VOIP solution): 2 more new
offices
-
Hired six new key management executives.
The rapid expansion program is producing
results. In the last week NWIS announced $200K in new contracts.
This equates to 7.5% of last year's entire revenues over 2% of the year.
If new projects continue to pour in at this rate, the company will far
exceed last year's 53% growth rate.
I believe the June and September
quarters are crucial to set the stage for multi year rapid growth. Like
the eagle hatchling, the company has been growing, and getting stronger.
The June and September quarters will be this baby eagle's opportunity to
fly, and as we turn the corner into 2005 this company should be soaring
like the full grown eagle parent in the picture. If the company executes
its business plan, the 4th quarter will be very strong.
NWIS is growing and getting
stronger as it prepares for the 10 fold growth of the nationwide wireless
internet infrastructure build out expected to take place over the next
three years. This company's growth rate should continue accelerating well
into 2005.
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Friday's
Contract Announcement Represents New Market |
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After announcing year end results,
NetWork
also announced another new Wi-Fi installation contract on Friday. The company
disclosed it had received an $84,000 Wi-Fi installation contract from Nazareth
Plaza town home community located in San Mateo, CA.
On the surface this may seem like
normal every day stuff. However, it represents a huge new opportunity for
NWIS.
To date, the company's Wi-Fi installations have been limited to government
agencies, schools, and corporate clients.
This contract is an installation
for a town home complex. Once installed, the owner will be able to provide
wireless internet access for all tenants. Most potential new renters or
purchasers are likely to be members of the younger generation. Pre installed
high speed internet access should translate to a powerful recruiting tool
for new tenants.
In order to compete, many landlords
will follow suit. Consider the number of town homes in existence in and
being built in Los Angeles, Orange County, San Diego, and Las Vegas. The
size of the potential market boggles the mind.
Taking all these factors into account,
one can easily understand why the stock has performed so well in 2004.
The recent run up in the stock occurred
when the company announced the acquisition of Del Mar Systems which added
66% top line growth overnight. More importantly, the acquisition puts them
directly into the red hot VIP space, which is also growing rapidly.
As you can see from the chart, the
stock has quieted a bit and recently bounced off the 2004 support line,
leaving the uptrend which began last August intact. This chart suggests
higher levels are in store. The company is proving itself. Continue to
accumulate.
I wasn't sure which news release
to include, so I will give you the choice. Click
Here to read the press release concerning year end results. Click
Here to the press release on the new contract.
Charts Provided Courtesy
Of TradePortal.com |
