THE RESEARCH WORKS, INC.
World-Class Equity Research Services for Small-Cap and Microcap Stocks
Symbol/exchange: EPXR/OTC BB Average daily volume: 40,385
Stock price 8/27/03: $4.80 FD Shares outstanding (3/31): 15,145,382
52-week price range: $9.20 – $0.28 Equity market capitalization: $73 million
Recent News Stock Price Chart SEC Filings
This Successful ISP and Telecommunications Services Provider Plans to Offer a
Full Range of Call Center Services through Offshore Telemarketing Centers
Epixtar Corporation ("Epixtar" or the "Company") has employed outsource and offshore
telemarketing with great success in the sale of its own telecommunications services, and
it now plans to broaden its business model to include call center services marketed to
third parties. Use of offshore telemarketing centers operated out of English speaking,
technologically literate, developing nations should provide large savings.
• The call-center industry serves a $50 billion market, of which the largest 10
companies control less than a 10% market share. Few economies of scale are
evident for the larger firms, and Epixtar has a highly efficient business model,
thanks to its innovations in personnel management and technology. The Company
also has a first-mover advantage in Asian markets.
• Epixtar’s marketing and technology investments are showing strong returns.
Management plans to leverage these gains to make the transition to a full-service
telemarketing firm and Business Processing Outsourcer (BPO), including use of
international call center facilities. The Company recently announced the
completion of the first round of $4 million in equity financing to build out a 1,500-
seat flagship call center in Manila, Philippines. Epixtar plans to develop 4,000 seats
of telemarketing capacity over the next 12 - 18 months.
• Epixtar has strong revenue and earnings growth potential, with estimated five-
year top-line CAGR of nearly 50%. The Company has recently been named to
Florida Trend's Top 250 list of public companies. While 2Q revenue was down
sequentially, its revenues grew 3-fold on a year-over-year basis. An approximate
100% gain in 2003 revenues appears likely. Management maintains that revenue
was deferred from 2Q to the second half of the year, due to the transition to new
facilities Profitability was achieved in the past three quarters and should expand in
the second half of this year, for EPS of $0.65 in 2003.
• The Company’s stock appears to be undervalued. Its trades now trade at 7.4
and 3.7 times estimated earnings for 2003 and 2004, respectively. A comparison
with a basket of similar companies reveals that the stock price would have to more
than double to be on par with the peers’ average P/E of 17.
Address: 11900 Biscayne Boulevard, Suite 262, Miami, Florida 33181
Telephone: (305) 503-8600
Web site: epixtar.com
State or other jurisdiction of incorporation or organization: Florida
Auditors: Liebman Goldberg & Drogin LLP (Garden City, NY). In their review of the
Company’s 2002 results, the auditors expressed a “going-concern” qualification.
Investor contact: Irving Greenman, CFO (305).503-8600
Banks and transportation firms have operated large corporate call centers for at least three
decades, but technological advances now allow small companies to access high volume
telephone facilities. The telecommunications boom of the 1990s facilitated a drop in
bandwidth and switches costs, so many smaller companies now use telemarketing for
technical assistance, customer service or direct marketing needs. Companies can now
outsource their telemarketing business to third party call centers, which establish and
maintain contact with prospective and existing customers. New technology also
precipitated a shift in market focus from “inbound” call centers, which handle calls
initiated by customers, towards “outbound” centers, in which agents initiate marketing
calls. While inbound service still accounts for more traffic, outbound call centers appear
to have great growth potential.
Many companies choose to bid out their calling operations to Business Process
Outsourcing (“BPO”) companies, due to the high fixed cost of telemarketing facilities.
Outsource call centers are presented with a script and monitored by clients, and can fulfill
various functions from order taking to billing. There are approximately 100,000 call
centers with 2.5 million agent positions within the United States, and industry monitors
have estimated that this figure could increase by more than 14% by CY 2005. While
there are a handful of “super centers”, most locations only employ a small number of
The offshore outsourced model. The opportunity for offshore telemarketing centers is
robust, due to growing numbers of technically literate English speakers in developing
nations such as India, Malaysia and the Philippines, where labor and plant costs are low.
Facilities outside the U.S. currently represent under one quarter of the world’s call
centers, but this fraction should increase dramatically as more companies take notice of
the savings and reliability offered. According to a recent report from consultants Frost
and Sullivan, call center revenue in India is projected to grow to $735 million in 2008, up
from $237 million in 2002; Philippine BPO’s are expected to generate $112 million by
2008. Large capacity offshore facilities can serve multiple companies and several
products simultaneously. Offshore telemarketing firms generally have inter-linked
centers at several locations, which allows them to service spikes in call volume.
Technology. The core technology of a call center is its automatic call distribution
(“ACD”) system and centralized database. Also important is a quality control system for
monitoring phone calls and providing feedback. Each marketer works with a computer
and telephone set that are connected to a supervisor, telecommunications switch, and data
An ACD system is a proprietary high volume phone switch for routing inbound call
traffic through proper conduits to the appropriate agents. Historically, this switch only
handled calls and log information, but modern ACD switches often include additional
software to allow for a comprehensive calling solution. Switches now can manage all call
information, and all of a center’s processes are automated, from initial transaction to
Competition. The call center market is extremely fragmented; the largest company in the
industry controls less than a 5% market share and the top 10 companies, less than 10%.
The total market size is about $50 billion, leaving much opportunity for smaller players
like Epixtar. Convergys Corporation (CVG/NYSE), the largest competitor, has
annualized revenues of $2.2 billion and operating earnings of $274 million. Convergys
employs 44,000 people in 45 centers throughout the world and is expanding abroad; it
will compete with Epixtar for business in the Philippines. Epixtar has some competitive
advantages. The Company has a first mover advantage of over one-year in entering the
marketplace, and uses a performance based pay model that attracts and retains superior
India-based HCL Technologies is another large player in the BPO market, with
annualized revenues of approximately $34 million from its BPO divisions. As of March
31, 2003, HCL Technologies employed 8,748 people in 26 offices within 14 countries
and recently signed British Telecom to a five-year, $160 million BPO contract.
While companies such as Convergys and HCL Technologies are highly visible, we do not
believe they have a distinct market advantage in the telemarketing industry. As evidence,
many large companies, such as AOL and G.E. Capital, have recognized the cost savings
of offshore locations and built their own facilities, rather than outsource to BPO
Epixtar's Business Model
Epixtar presently develops Internet and telecommunications services for small-to-medium
sized businesses, and employs outsource telemarketing to promote customer acquisition
and support services. The Company has 230,000 subscribers to its five brands of
business ISP services, and plans to launch additional ISP and telecommunications brands
in 2003. Epixtar recently started selling other companies’ products as well; launching its
first two Fortune 1,000 marketing service campaigns. Due to this business expansion, the
Company’s revenue model will change dramatically with the opening of three large
outsource call centers in Asia. Epixtar will then transition to a full-service telemarketing
firm (inbound and outbound traffic), a move that will incorporate management’s years of
successful experience in marketing its own products through such channels.
Epixtar’s service offerings are different versions of dial-up ISP, with various
enhancements added. All five brands include a customized web page, some include a
link to a portal for legal or accounting services, and others come with discount long
distance telephone services. The cost to customers is $29.95 per month, which is paid on
a monthly basis with a one-month free trial. Customers are billed through local telephone
service providers, and can cancel at any time, but the average customer life during the
past nine months has risen to 6.5 months from 3 months. Customer acquisition costs total
approximately $30, which is recovered in the first bill; the fixed cost of ongoing accounts
is only about $2 per month. After the Company is able to handle its own calls, it should
save an average of $6 per sale.
Epixtar’s business is outsourced to more than two dozen telemarketing firms in the
Philippines, India, Caribbean and the U.S. The Company maintains quality control by
employing supervisors that train and monitor marketing agents; an independent firm also
verifies each transaction to ensure proper billing. For added incentive, marketers’ pay is
performance based. Customer service is crucial for Epixtar, so it has 16 full-time
customer service employees in the U.S. and 9 in the Philippines. The Company also
employs a country manager in India, and is in the process of hiring two more managers in
Outsourcing to offshore facilities has substantially reduced Epixtar’s costs, and the
Company has been a pioneer in realizing these savings. Although international telephone
rates have traditionally been about 50% higher than domestic rates, the infrastructure and
payroll savings dwarf this cost, and technology enhancements should lower phone rates
over time. Operating costs per hour of marketing per agent are $12-16 for Epixtar; this
cost is evenly divided between salary, telecommunications and management expenses,
and should be dramatically lower when the Company operates its own centers.
Broadband telecommunications also allow for significant cost savings. With Voice over
IP (VoIP), the Company is able to utilize broadband connectivity to transmit phone calls
for less than five cents per call, which is less expensive than within U.S. VoIP involves
digitizing voice phone calls into packets of data that can travel over the Internet
eliminating per minute charges.
Another benefit offshore telemarketing is the access to higher-educated sales staff.
Whereas most telemarketers in the U.S. have only high-school degrees, the staff in the
Philippines typically has four-year college degrees. Sales staff turnover in the Philippines
can be as low as the single digits, whereas U.S. turnover rates run from 20 to 50%.
Last quarter Epixtar announced the formation of a wholly owned subsidiary, Epixtar
Marketing Services, Inc. (“EMS”) to offer its BPO telesales services. This subsidiary will
leverage Epixtar's call center training and supervision skills to market its own business-
to-business brands, as well as serve the needs of other companies. On June 24, the
Company announced the completion of the first round of $4 million in equity financing to
build out a 1,500-seat flagship call center in Manila, Philippines.
Epixtar plans to develop 4,000 seats of telemarketing capacity over the next 12 - 18
months. These marketing desks will be located at two new facilities in the Philippines and
one in India. This expansion should shift the Company’s core business away from its
business-to-business telecommunication services. Epixtar plans to be a bi-directional
outsource telemarketer for residential, small business and enterprise customers. These
centers will handle Epixtar’s traditional customers, and should afford savings of $6 per
sale of its technology packages, yet the majority of revenues should be generated by the
management of other companies’ marketing needs.
Management is attempting to raise additional financing to cover the remaining costs of its
new facilities. Still, this financing should be significantly less than originally anticipated
since Epixtar will receive government incentives. In this regard, Epixtar recently entered
a Memorandum of Understanding with a Calcutta-based agency of the Indian government
to establish a 1,000-seat call center and BPO facility with operations slated to begin in
early November, 2003. Construction, labor and other costs of the new centers are
expected to be so low that invested capital may be returned as revenue in one year. Each
seat is projected to yield $1,600 in revenue per month (assuming 25 days of work) at one
shift capacity. With 4,000 seats, sales are estimated to be $6.4 million per month or
$76.8 million per year. Epixtar will likely run one and one half shifts per center, but this
estimate only assumes one eight-hour shift. Additionally, our financial model is slightly
more conservative as it assumes a less aggressive build, an average of 3,000 seats in FY
2004 and 4,000 seats in FY 2005.
Epixtar was established in 1994 under the name Pasta Bella to act as a holding company
to acquire other businesses. The name was changed twice, first in 1997 to Global Asset
Holdings, Inc. and again in 2002 to Epixtar Corporation. In November 2000, the
Company bought a majority stake (80%) in SavOnCalling.com. SavOnCalling marketed
and sold telecommunications services on a resale basis. In March 2001, the Company
acquired National Online Services, a provider of Internet related services for small
business subscribers. This subsidiary uses independent telemarketers for its business
Balance Sheet on June 30, 2003
(giving effect to the acquisitions; in 000s)
Cash & equivalents 1,891 --- Short-term debt 404
Other current assets 7,783 --- Other current liabilities 7,016
Total current assets 9,674 --- Long-term debt 2,474
Goodwill & other intangibles 16,801 Other long-term liabilities 55
Other assets 325 --- Shareholders’ equity 17,351
Total assets 27,300 --- Total liabilities & equity 23,300
On June 30, 2003, the Company had working capital of $2.3 million. Current assets
included goodwill of approximately $17 million. There was long-term debt of $2.5
million, and other non-current liabilities totaled $55,000. Stockholders’ equity consisted
of approximately 21,010 shares of preferred and 11 million shares of common stock.
(in $000s, unless otherwise noted)
--- 2002A Q1 03A Q2 03A 2003E 2004E 2005E
Revenue 26,251 12,367 9,268 51,298 104,680 129,529
Gross profit 8,469 6,383 5,121 27,683 62,808 80,308
Gross margin (%) 32.3 51.6 55.3 54.0 60.0 62.0
SG&A expense (10,234) (3,850) (3,578) (16,327) (31,404) (38,859)
Other operating expense (99) (36) (41) (172) 0 0
Operating income (loss) (1,863) 2,497 1,502 11,184 31,404 41,449
Other income (loss) (582) (556) (132) (3,186) (9,421) (12,435)
Net income (loss) (a) (2,446) 1,942 1,370 7,997 21,983 29,015
EPS $(0.23) $0.18 $0.13 $0.65 $1.30 $1.71
Avg. # of fully diluted shares(000s) (b) 10,503 10,503 10,516 12,482 16,900 17,000
(a) Although the Company did not pay taxes in FY 2002, we expect NOL carry-forwards of $1.6 million
to expire this year and a tax rate of 30% to apply in future years.
(b) Assuming additional 2 million shares and 1 million warrants from $7 million proposed offering. In
2004E, 4 million warrants from previous offering are exercisable.
There is no way to estimate the Company's revenue and earnings prospects with any
degree of precision, because there are myriad variables that might impact future results.
Nevertheless, there is enough information to develop a set of assumptions upon which an
earnings model can be built, with the understanding that the model is subject to
significant revision if there are changes to the underlying assumptions. For example, there
is a likelihood that during these years the Company will make acquisitions and raise
additional equity capital, thereby altering the earnings outlook presented above.
The rapid increases in revenue over the last six quarters indicate that the Company’s
business model is scalable and can be highly profitable. We project top-line growth of
approximately 100% in FY 2003E. Company guidance looks forward to $5-10 million in
revenue from the new BPO business in 2003, growing to nearly 50% of total revenue in
ISP revenue estimates are based upon historical growth restricted by maturity in the
marketplace. Revenue of $10-14 million per quarter is possible this year, but growth
rates should decline next year as existing businesses mature. BPO revenue projections
are based on an initial number of calling seats (less than 1,000) scaling to an average seat
count of 3,000 next year. 1,000 additional average seats are anticipated for each
subsequent year. We do not assume any added productivity in the outer years, but use a
conservative estimate of $8 per hour, or $1,600 per seat per month.
We believe that Epixtar is in an enviable position, as it can potentially achieve gross
margins of over 90% from its new BPO business and 50% or greater from its traditional
ISP business. We project blended gross margins of 50-55% through 2003 trending to
65% in the outer years. On an operating basis, profit margins of 35% are within reach
(when fully seated), and we have projected operating margins of 25% by year-end. The
Company will be paying taxes this year, so net margins are likely show an initial drop,
rebounding to 21% next year. BPO net margins of 23% in 2004, climbing to 28% in
2006, are incorporated in our blended margins. Slightly more conservative than
management guidance, we project EPS of $0.65 in 2003 increasing to $1.30 in 2004. Our
FY 2004E share count incorporates dilution from proposed financing.
Statements of Cash Flows
(in $000s, unless otherwise noted)
--- 6M 2003 6M 2002
Cash flows from operating activities: --- ---
--- Net income (loss) 3,312 (3,140)
--- Adjustments to reconcile net loss to net operating cash (3,927) (3,131)
--- Net cash (used in) provided by operating activities (615) (9)
Cash flows from investing activities:
--- Net cash (used in) provided by investing activities (171) (204)
Cash flows from financing activities:
--- Net cash (used in) provided by financing activities 1,953 279
Net increase (decrease) in cash & equivalents 1,168 65
Note: This table gives effect to the acquisitions as if they had occurred on January 1, 2001.
We do not believe the Company will require any additional financing to achieve its core
business objectives. Positive operating cash flow of over $8 million in 2003 appears
likely, even with entry into the BPO market. Financing for the Company’s facility build
seems unlikely to pose much difficulty, because the return on invested capital is expected
to be 12 months. The proposed financing for this build is an issuance of up to 2 million
convertible preferred shares (convertible at $3.50 per share), with some warrant coverage,
for proceeds of $6-7 million. Approximately 30% of this offering (representing 600,256
share of common stock) has been sold as of June 30, 2003.
(June 30, 2003)
Total common shares issued and outstanding 10,516,617
Convertible preferred shares 600,286
Options outstanding (at $2.50) 929,000
Warrants outstanding (at $0.50, locked until 5/31/04) 4,000,000
Warrants outstanding (at $7, from financing) 294,140
Warrants outstanding (at $5, fees from financing) 60,025
Total fully diluted shares outstanding (treasury method) 15,145,382
Martin Miller 2,898,921
Stanley Muatt 2,803,000
Sheldon Goldstein 900,000
Executive Officers & directors as a group 3,078,921
Note: This table depicts beneficial ownership as determined in accordance with the rules of the SEC;
some of the shares may be double counted. For additional details, refer to the Form 10-K for the year
ended December 31, 2002.
As of June 30, 2003, there were 10,516,617 common shares outstanding, with a float of
approximately 35%, or 3.7 million shares. While 57% of the Company shares are held by
two individuals (through their ownership of TransVoice), directors and officers only hold
30% of the Company. There were 49 holders of record of the Company's common stock,
but since a substantial portion of the Company shares are held by a depository company,
Epixtar believes the number of beneficial owners of the securities is substantially greater
There are warrants to purchase 4,000,000 shares of common stock at an exercise price of
$0.50 per share. Additionally, there are convertible preferred shares and warrants
associated with the aforementioned financing that have been incorporated in the
Shareholder Profile table even though the offering is not closed. Epixtar sold 21,010
shares of convertible preferred stock (30% of the initial offering) at a price of $100 per
share for gross proceeds of $2,101,000. These preferred shares are convertible into
600,256 shares of common stock and have a dividend of 8% (redeemable at $200 per
share). The company also issued warrants to purchase 14 shares of common stock with
each preferred share sold, or 294,140 shares exercisable at $7.00 per share (expiration
June 2008). These warrants can potentially yield proceeds of $2,058,980 for an aggregate
offering of $4.2 million. Additional warrants to purchase 60,025 shares at $5 per share
were issued as fees.
Selected Investment Considerations
• Larger competitors. The Company is competing against larger companies that may
attract the top tier of the labor pool and have better access to capital.
• Cramming complaints. During the past 12 months, the Company has established
itself as a highly effective sales training company. However, in 3Q 2002, Epixtar
temporary suspended marketing of one of its five brands, One Nation Calling Plan,
since some of its outsource calling centers India used improper methods to obtain
customers. Epixtar quickly implemented a quality assurance program, an internal
investigation, and began using independent monitors to examine sales records.
There have been investigations by five states (yet to be resolved in three states)
regarding Epixtar’s business practices. Our-Street.com allegedly filed complaints
in March 2003 against Epixtar with the FTC and the SEC on behalf of consumers
nationwide and shareholders of the Company. The complaints assert unfair or
deceptive acts and practices in or affecting commerce. According to the grievances,
the Company participated in “cramming,” the practice of billing people through
local telephone companies for services that were said to be free, or that the victim
had rejected. The complaint also asserts that in recent SEC filings, the Company
failed to disclose these lawsuits and the income generated through the illegal
Epixtar has taken measures to address the cramming issues. The Company has a
policy of refunding customers’ money if charges are disputed, and voice files of the
sale in question are distributed to all those that inquire.
• FTC regulation initiatives. The FTC has proposed additional regulation regarding
“do not call” lists that apply mainly to residential customers. Epixtar’s key
customers are small businesses, but the Company makes an effort to screen every
call to help ensure that no potential customers are on such a list.
• Stock volatility. The stock is thinly traded, has exhibited price volatility, and is a
bulletin board stock subjecting broker-dealers to additional sales practice and
disclosure requirements. The shares are appropriate only for risk-oriented investors.
• Other risks. Additional risks are outlined in the Company's investor materials and
SEC filings, and these are hereby incorporated by reference.
In view of the inconsistent revenue streams from Company operations and the fact that
the Company is changing its business model and entering new markets, there is no readily
available model to value Epixtar common shares. One method is to use a competitive
analysis as well as a PEG (price to earnings over growth). Since many of the companies
within the telemarketing industry are private, we are using only four public companies as
the basis of our comparison. These companies include the remaining publicly held
telemarketing companies: Convergys Corporation, Sitel Corporation (SWW/NYSE),
TeleTech Holdings Inc. (TTEC/OTC) and West Corporation (WSTC/OTC). (HCL
Technologies was not included since it is not a U.S.-based company).
Comparative Valuation Analysis
Telemarketing Price on Market Cap P/E P/E P/E
company 8/26/03 ($ mil) LQA 2003E 2004E
Convergys* 17.64 2,755 15.2x 15.6x 14.6x
Sitel* 1.25 133 NM NM NM
TeleTech* 4.56 343 NM NM 28.5x
West Corp.* 24.44 1,656 20.5x 18.6x 14.4x
Average 21.0x 17.1x 19.2x
Epixtar 4.80 73 9.2x 7.4x 3.7x
* based on analyst consensus estimates as of 8/26/03 Teletech reported a loss for the latest quarter and is
expected to earn $0.02 in FY 2003. Sitel does not currently have coverage.
Epixtar appears to be undervalued relative to its competitors. The Company’s P/E ratios
for projected earnings in both 2003E and 2004E are significantly below the group’s
average. To achieve parity with its competitors, the Company’s share price would have
to more than double (to $11 per share). However, Epixtar would still be trading at a
slight discount to its competitors on 2004E earnings.
On an absolute valuation basis, we estimate a five year top-line CAGR for Epixtar of
nearly 50%, with earnings growing even more rapidly (unfeasible to calculate due to
recent earnings losses). If we assume a growth rate of half our projection (25%) and a
conservative last quarter annualized PEG of 1.0, Epixtar’s shares can be valued $13 per
share, or more than double its recent trading range.
Officers and Directors
(Ages are as of December 31, 2002.)
The Company is managed by executives with industry-respected careers in telemarketing
Martin Miller (63), Chairman of the Board, CEO. Mr. Miller has been a private investor
in Epixtar since 1997. Concurrently, he acted as the U. S. manager of corporate finance
for a foreign investment group.
William D. Rhodes (54), President and CEO of Epixtar Group, Inc. and Epistar BPO
Services, Inc. Mr. Rhodes was appointed as President and CEO of Epixtar’s newly
formed subsidiaries in June 2003 after serving as President of the Company since January
2002. He was founding President of National Online Services, Inc. before its acquisition
by Epixtar. Mr. Rhodes’ other management positions include Chief Operating Officer of
Equalnet Communications in Houston and President and COO of Valu-Line
Communications in Longview, Texas. Previously, he worked for 20 years with Rockwell
David Srour (40), Executive Vice President/Chief Operating Officer. Mr. Srour has
served in this position since November 2001 and was recently appointed to Epixtar’s
Board of Directors. Previously, Mr. Srour was Senior Director of Information Service of
CarrAmerica and a Senior Manager at KPMG Consulting and Ernst and Young LLP. He
has significant telecommunications experience, including roles as COO of iTelsa and
Irving Greenman (67), Chief Financial Officer. Mr. Greenman has been employed by the
Company since January 2000. Previously, he served in various executive positions, at
Kaleidoscope Media Group, Inc. (an Entertainment Company), Medica Media, and
Healthcare International. Mr. Greenman is a Certified Public Accountant in New York
and in Florida.
Ricardo Sablon (41), Senior Vice President/Chief Technology Officer. Mr. Sablon was
previously vice president and chief telephony engineer for Equalnet Communications.
Additionally, he was a founder of FreeCaller Communications (an advertiser sponsored
long distance service that he patented) and chief executive of CaribeCom (a company that
provided the first post-embargo commercial direct-dial service to Cuba from the U.S.).
Gerald Dunne (41), Vice President/Chief Marketing Officer. Mr. Dunne was formerly the
Chairman and CEO of Group Long Distance Inc., a publicly traded long distance reseller.
In this role, he led the company to over 200,000 residential and small business
subscribers before leaving to become CEO of Epixtar’s subsidiary, One World Public
Deborah Gambone (51), Vice President, Corporate Counsel and Secretary. Ms. Gambone
has served as corporate counsel since December 2001 and became Secretary and a Vice
President in November 2002. Previously, she was counsel to several firms including
Vicon Group, International Research Group, Inc. and Telecomputing, Inc.
David Berman (57), Director. David Berman is a practicing attorney in Miami, Florida
and Epixtar’s outside director. Previously, Mr. Berman was a partner in Berman &
Berman, a partnership in Miami, Florida specializing in tax law.
Notes: The Research Works, Inc. (hereinafter referred to as "RW") is a registered
investment advisor that produces equity research reports. On May 14, 2003, in
consideration for RW's research services to be performed through April 15, 2004, the
Company paid RW a non-refundable fee of 13,617 common shares (restricted). This
report is based on RW's independent analysis and judgment. The materials upon which
the information in this report is based were supplied by the Company and other sources
believed by RW to be reliable; except as otherwise indicated, RW has made no
independent verification and does not guarantee the information's accuracy or
completeness. Any interpretations, earnings estimates, and conclusions contained in this
report are those of RW. This report is not intended to constitute a recommendation for
any particular investor to purchase or sell any particular security or that any particular
security is suitable for any particular investor. This report should not be construed as a
recommendation or request to engage in any transaction, or an offer or solicitation of an
offer to buy or sell any security or investment, and investors are advised to consult their
personal broker or investment advisor before making any investment decision concerning
any of the companies mentioned herein. Use of this report may be subject to applicable
rules of any self-regulatory organization of which you may be a member. The
information contained in this report is subject to change without notice, and RW assumes
no responsibility to update the information contained in this report. RW and/or its
shareholders, officers, employees, independent contractors and/or members of their
families may hold a position in and engage in transactions with respect to securities
mentioned herein, and such purchases and sales may be consistent with or contrary to
recommendations in this report. The David Bench Consulting Group, which is owned by
the analyst who wrote this report, holds a position in the common shares of this Company
which it received as compensation for the Mr. Bench's writing of RW's reports on this
Company through April 15, 2004. The Research Works, Inc. 2003. All rights reserved.
Additional and supporting information is available upon request.
The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-
looking statements. In order to comply with the terms of the safe harbor, RW notes that
except for the description of historical facts contained herein, this report may contain
certain forward-looking statements that involve risks and uncertainties as detailed herein
and from time to time in the Company's press releases and elsewhere. Such statements
are based on RW’s current expectations and are subject to a number of factors and
uncertainties, which could cause actual results to differ materially from those described in
the forward-looking statements. These factors include those described in the Company's
press releases and SEC filings, all of which are hereby incorporated by reference. No
forward-looking statements are a guarantee of future results or events, and one should
avoid placing undue reliance on such statements.
August 27, 2003 David A. Bench