Tuesday, April 10, 2007

DFNS 10K Released last night!

Good morning,

DFNS released their 10k after the bell yesterday. I read thru it last night and things look pretty good.
They have just less than 29 million shares outstanding which was a concern of mine. (Especially after the ATSX ordeal) It doesn't look they are issuing a bunch either. It looks like they have a decent amount of cash as well.

With all the new orders assuming they are making a profit on the orders they should have some nice cash flow coming.

Their backlog was $3.5 million which is up.
They have $6.9 million in orders from the Israel Defense department.
Another $780,000 from U.S and Latin america (Jan 17th news release)
Another $280,000 for a bus contract and maybe $1 million from that.

And that doesn't include the smaller orders or if the civilians are buying. (They did $4 million in civilian orders or $1 million per quarter for 2006.)

All totaled that should mean $8-$10+ million for the first 2 quarters for DFNS. They only did about $3.6 million for the first 2 quarters of 2006.
So we could have revenue growth of over 100% for the first 2 quarters Year over Year.

Someone with a lot of volume is taking the stock down a bit today now as of this writing is back to .50

I think as long as they continue to grow revenue and if they could earn .02 each of the first 2 quarters this stock will really move. Next important date is May 15th which is when the Q1 will be need to be released by.

The owner of the company and another big investor own roughly 80% of the stock. Which means their is roughly only about 6 million shares in the float. So a quarter with huge growth especially if it comes with earnings will really move this stock.

Talk to you tomorrow.
Steve Hoven

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