NEW YORK, Dec. 12, 2003 (PRIMEZONE) -- The following is an investment opinion issued by Investrend Research Syndicate:
Investrend Research analyst Gary Vassalotti has reaffirmed the "Speculative / 2" rating and 12-month $3.50 Target Valuation established November 10 by analyst Tom Byrne. The reiteration follows the release of 2Q financials ending September 30, 2003.
"Semotus has added major Fortune 500 companies to its client list such as Ebay (Nasdaq:EBAY), JP Morgan Chase, ATT (NYSE:T), Lucent (NYSE:LU), and Bank of America," and reported 2Q loss of $(0.06) per share versus $(0.07), an improvement of 14.29%. "If non-cash charges are added back, an operational earnings figure of $(0.01) can be derived," stated Vassalotti.
He said sales improved to $373,172 vs. $295,188, positively impacting gross margins to 83% versus 63%.
Semotus' cash and cash equivalents balance of $1,545,638, a decrease $424,272 from the beginning of the 2Q, indicates another drop in the cash burn rate from the 1Q of $231,000 to $193,272, and represents the lowest burn rate for Semotus since it became listed on the Amex.
Vassalotti said, however, the company will need to become cash flow positive to improve its rating, which may be easier to achieve with the lowered R&D costs now evident, and he pointed out that two customers represent a significant percentage of sales, 17% and 6%, leaving cash flow and earnings vulnerable should either be lost.
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Gary Vassalotti is a member of AIMR and has his own investment advisor business, www.vimcor.com. Prior to forming VIMCOR, a PA state registered, Mr. Vassalotti worked as an Analyst / Portfolio manager with First American Bankshares, then First Union/Wachovia Corporation. He has over 10 years experience in the investment field.
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