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STEC - (recommended
to subscribers
on 9/06/04)
BOUGHT
at $3.38 SOLD
at $6.64
On August 5th 2004 SimpleTech Incorporated, a provider of memory and
storage
products, reported 2nd quarter 2004 revenue of $56.5 million which was
up 26% from the $44.7 million reported in the 2nd quarter of 2003.
During
the quarter the company reduced it's inventory by 39% and increased
it's
backlog by 62%. In June SimpleTech discontinued it's Xiran Division and
recorded a charge of $4.7 million. The company expects that this
will reduce operational expenses by $2.0 million per quarter in the
future.
Net loss was $1.9 million or 4 cents per share and was entirely due to
the discontinued part of it's business. Net income from continuing
operations
was 2 cents per share.
During the first
six
months of 2004 three
customers each accounted for 10% or more of total revenue. The largest
customer CDW Corporation (formerly CDW Computer Centers) accounted for
20% of revenue. Micron Technology accounted for 12% of revenue and
Smart
Modular accounted for 11%. During the 1st half of 2004 international
sales
comprised 21% of the company's revenue.
In June 2004
SimpleTech
announced a stock
buyback program authorizing the purchase of up to $15 million of its
common
stock which would be just under 10% of outstanding shares or 22% of the
float based on the current stock price. As of September 1st 2004 STEC
had
repurchased approximately $2.2 million under this program.
For the 3rd quarter
of
2004 SimpleTech
expects revenue to be between $60 million and $62 million. This would
be
an increase from the prior quarter as well as an increase from the year
earlier period. Earnings per share are expected to be between 2 cents
and
3 cents.
SimpleTech has
$77.8
million in cash and
investments or $1.62 per share. Book value is $2.65 per share which is
up from less than $2 a share a year ago. SimpleTech carries no debt. At
the current price STEC has a price-to-sales ratio well below 1 and
a price-to-book value of just 1.3.
8/23/06 - SOLD AT $6.64 FOR A GAIN OF 96%. DURING THE SAME TIME
PERIOD THE NASDAQ WAS
UP 16%.
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