Friday, 20 April 2007

Brainhunter Tours Calgary Investment Community

This week Brainhunter was again in Calgary meeting with various investment groups as part of an effort to expose the company to a large number of members of the investment community. The week of April 23rd, meetings will be held in Montreal and Ottawa and in late May the tour moves to Boston and New York.

During the meetings, Chairman and CEO John McKimm emphasized that he is comfortable with analyst projections that revenues will hit $220 million and EBITDA more than $8 million in Fiscal 2007 (Sept. 30). At $0.75 the stock is trading at a little more than four times projected EBITDA/share. Peer group comparisons he presented backed his case that BH is trading at a large discount to competitors.

The question arose more than once that since the company is so undervalued in Management's opinion, why hasn't some one made a bid to take it over. In a cautious manner, Mr. McKimm responded that there have been several approaches from private and public groups. However, discussions were terminated very early as it was clear that serious bids were not in the cards at this time and people were trying to take advantage of the undervalued situation.
As Management owns over 50% of the stock and firmly believes " Brainhunter will grow into a $500 million business in the next 18-24 months", the "for sale" sign is not out at these prices.

Mr. McKimm emphasized that the company has always remained cash flow positive despite the multiple acquisitions and that the losses are due to the amortization of intangible assets such as goodwill. He stressed that Brainhunter currently has $288 million in backlog contracts and another $300 million of contracts in the "pipeline".
Brainhunter continues to become the preferred vendor with more and more major organizations. It has over 50 customers that do +$1.0 million in business and is now showing strong organic growth and continues to trade at very low multiples to peers.