To OTC Journal Members:
 

Quarterly Results- Three N's and a V

The June quarterly results from most of the OTC Journal's eight core ideas are in. Today, I've compiled a brief overview on four of those companies.

Stocks trade on investor perception of the future. Looking at trailing financial statements is important, especially as it helps us develop expectations for the future. The results being disclosed today are already old news, but they can help us confirm companies are on track to deliver outstanding growth.

Here's a quick look at the past, which bodes well for the future:
 

Network Installation (OTC BB: NWIS)

• NWIS delivered $.73 million in revenues for the quarter
• 43% increase over the March quarter at $.51 million
• 133% increase over the June quarter in '03
• Gross Margins came in at a whopping 47%
• Losses are expected to continue into 2005 as the company continues to expand geographically.
• Growth could accelerate for the remainder of the year as business is beginning to flow in from several new locations.

NeWave (OTC BB: NWAV)

• NWAV delivered $1.82 million in revs in the June qtr.
• This represents a sizzling 119% increase over the March qtr.
• No comparisons from June of '03 as the company had no operations then.
• The company has such low cost of goods they don't even count it anymore- they just show expenses below revenues.
• I would not be surprised to see this company turn cash flow positive from operations in the September quarter as they continue to set record revenue months successively. In terms of organic growth, this is by far the hottest company I currently cover.

NuTech Digital (OTC BB: NTDL)

• NTDL delivered $1.54 in revs in the June qtr.
• It was the highest top line in company history; 54% increase over the March quarter
• The June quarter had a 60% increase over the June quarter in '03.
• Gross profit margins were down considerably, which helps explain why the stock is making new lows. The company delivered $.826 million in gross profits, down from $.884 in the March qtr. Therefore, it is fair to say the company gave up profit margins in return for higher volume.
• On the plus side, NTDL was actually cash flow positive from operations. $.251 million of their quarterly expenses were non-cash (I learned this from the company). Therefore, the company actually generated $50,000 in positive cash flow from operations in the quarter, reducing the long term risk considerably.
• The company's expansion plans from here are focused entirely on the music/concert DVD production and distribution. The signing of the Jessica Simpson concert DVD was a major win on the prestige side, and a few more signings of this magnitude should put the stock back on track.

VirTra Systems (OTC BB: VTSI)

• VTSI delivered $.375 million in revs in the June quarter
• This represents an explosive 368% growth rate over the same qtr in June of '03 when the company was transitioning to its new business model.
• It is also a 26% growth rate over the March quarter.
• Gross Margins came in at a healthy 67%
• I expect revenue growth acceleration September and future quarters. The company could easily turn profitable in 2005 if the current trend continues. 

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