Google Finance
Filing
June. 28, 2017
Q1 2017
Current Price: $0.24
1.Basic Information
(1) History
It was co-founded by Darryl Jacobs and ??? at 1998. The company IPOed at 2003 and the CEO role seems been transferred to William Tempany( the company which it reverse merged with). Later at 2008 Darryl Jacobs somehow was forced out and he actually sued the company for that. Tempany continue the CEO role until 2015, the company brought in Thomas Schmutz from L3 communication as the new CEO. Since then the company had some quite good revenue growth and been profitable for the last several quarters.
The company's main product is called AFIRS. It is a hardware installed on airplane and it connected to Iridium satellites network. It provides voice to the airplane at real time. Its data connection can provide airplane diagnose information at real time to help airplane save fuel and improve efficiency. It also can steaming black box data at real time when its needed.
At 2014 when the MH370 airplane is missing, the company got a lots of attention because it can stream real time data from airplane. But at 2015 its business actually went worse because its customer kind of wait for new regulation to come out. When indeed it came out, it is less favorable to the company because it is kind of of a loose standard which emphasize more on locating.
(2) Business related:
The company has 3 segment of revenue. 1) Hardware, the AFIRS hardware it sold to customers directly. 2) Service: The voice and data service it provided, this probably has the highest margin. 3) Parts: the AFIRS hardware it sells to OEM like Airbus and Bombardier. This might be the low margin part. Each of the segment seems close to 1/3 of revenue.
(3) Management.
(4) Debt and Credit facility.
The company paid down all debt mature at end of 2016. Now it has around $1m in government debt which has no interest.
(5) Insider holding, options, Insider trading info, share buy back.
(6) Employee numbers
(7) Industry comparison.
(8) Major events
2. Financial data.
3. Valuation
The company's SG&A varies very little at $6m-$8m range. The R&D expense is around $2.5m except higher at 2010 to 2011 when it was developing the AFIRS 228 model. So it needs roughly $10m in gross profit to make even. While that number is just met when revenue is close to $15m last year.
If the company's revenue starts to grow above $15m range, it could be very profitable given the cost is pretty much fixed.
The service revenue is its most stable revenue and gradually grow to $5m/year. It is very like those revenue can continue to grow at a slow pace.
4. Risk
(1)Both the AFIRS and parts revenue are based on contract. It is no way to guaranty the revenue won't decrease. If these revenue drop from $10m to $5m. The company could suffer $3-$4m loss per year.
(2) The company has a long history of loss and don't know whether it can keep the good trend. It issue shares loosely in the past.
5. Conclusion
If its revenue can grow to $20m/year and net profit grow to $4m-$5m range. The company could worth double the current market cap. However, currently the company is just profitable and may loss money if things go bad.
6.Links
