Tuesday, 5 May 2009

Brainhunter Gets Vocal About Recent Contract Wins

Brainhunter (TSX: BH)
Basic Shares Issued: 43.958 million


Historically, Brainhunter management has been relatively quiet about closing new business but as of late there’s a new face emerging. Over the past week the company announced that it has signed:

· $26.5 million in new and renewal business with the Federal Government, and

· A two year $35 million per year contract through the Company’s Engineering Division with automatic one year extensions upon renewal.

In regards to the Federal Government deal, BH stated it covered more than 20 departments and with backlog and expected renewals, the tally exceeds $50 million in business. Brainhunter used both announcements to emphasize that its backlog and expected renewals to the end of Fiscal 2010 (Sept. 30) was approximately $327 million with $100 million of that in the current fiscal year.

As a professional staffing and services group, the Company counts government and large organizations in its client base. In Fiscal 2008, BH reported revenues of slightly more than $234 million and a net loss of $12.3 million.

Since the news the market has moved up slightly from the $0.10 range to the $0.15 to $0.20 range. As management has not provided guidance for Fiscal 2009, the market has no perspective on EBITDA, cash flow or earnings expectations. The Company is on the record as saying it would like to find a partner to either provide additional capital or preferably to buy Brainhunter.