Go to Jeff Salisbury LWGate Home Page.From: musicant@autobahn.org (Dan Musicant)
Subject: Re: [CANSLIM] KELL
Date: Wed, 04 Mar 1998 05:51:01 GMT
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On Tue, 3 Mar 1998 10:51:31 -0500, you wrote: : :One of my core holdings seems to be breaking out :of a W type of base. I used the opportunity to :add some more. I do not have the CANSLIM stats :with me here at work but they look pretty good. :My only problem with the stock is that the insider :ownership is only 7%. :I am interested in hearing people's opinions about :Kellstom (KELL) from a technical standpoint. =20 :Today it is one of the very few stocks :that I track that is up. :Oli : I caught sight of this stock a couple of months ago and thought it a good opportunity (possibly). It hasn't done all that well. However, looking at it now, it appears promising. The chart looks good. EPS 99, RS 89. Accelerating earnings growth. Pretty strong CANSLIM numbers across the board. Up 9% or so today, but it looks like it may have some real upside momentum to play out yet. There is news today of a $20 million acquisition, which probably accounts for the breakout. Also, it was a very good day for the airlines, and this Co. is closely aligned, obviously. Pasting the story below. Dan - -------------------------------------------------------------------------= - ---- Tuesday March 3, 8:15 am Eastern Time Company Press Release Kellstrom Industries, Inc. To Acquire Integrated Technologies Corp. =46or Approximately $20 Million SUNRISE, Fla.--(BUSINESS WIRE)--March 3, 1998--Kellstrom Industries, Inc. [NASDAQ: KELL] today announced that it signed a definitive agreement to acquire privately held Integrated Technologies Corp. (``ITC'') for approximately $20 million in cash plus an earn-out payable if ITC surpasses certain earnings before tax thresholds over a three year period. Kellstrom expects to fund the purchase from its current bank facility. Closing of the transaction, which is scheduled to take place within 30 days, is subject to completion of certain legal due diligence requirements by Kellstrom and compliance with the Hart-Scott-Rodino Antitrust Improvements Act.=20 ITC is a leading after-market supplier of jet engines and jet engine parts for the airline industry. It also provides related services such as engine leasing. ITC's principal product line features the Rolls Royce RB-211, Pratt & Whitney JT8D and Rolls Royce Allison models, and, to a lesser extent, it supplies Pratt & Whitney JT9D engines and parts. ITC has some 75 customers worldwide, including major commercial airlines and jet engine repair facilities. It has both an in-house sales force and international sales representatives. Founded in 1986, ITC is headquartered in Ridgefield, New Jersey.=20 =46or the years ended December 31, 1995, 1996 and 1997, ITC's revenues approximated $16 million, $29 million and $30 million, respectively. After adjustments for shareholder withdrawals and differences in accounting policies, ITC's EBITDA (Earnings Before Interest, Tax, Depreciation, and Amortization) margins were similar to those of Kellstrom for these periods.=20 As part of this transaction, Kellstrom received a three year option to purchase Mr. Vaisman's 49% interest in Flight Support, Inc., an FAA- approved overhaul facility which specializes in the repair of turbine blades for Pratt & Whitney engines. Founded in 1973, Flight Support recorded approximately $4.5 million of revenue in 1997.=20 ITC's Founder, President & CEO, Mr. Gideon Vaisman, will join Kellstrom after the closing as Senior Vice President and Manager of the Rolls Royce and JT8D product line Division. In addition, ITC's management and employees are expected to join Kellstrom. Prior to founding ITC, Mr. Vaisman spent 14 years at Chromalloy's Research & Technology Division as Chief Engineer and General Manager in Orangeburg, New York. There he was intimately continuously involved in development, marketing and production phases of the overhaul and repair of jet aircraft engine components. After earning his degree in mechanical and metallurgical engineering, Mr. Vaisman spent the next several years in France and the United Kingdom undergoing on-site aeronautical application training.=20 Kellstrom's President & CEO, Zivi R. Nedivi, stated, ``This transaction is the right move at the right time for a number of reasons. While Kellstrom and ITC are in similar businesses, we specialize in different engine models. We expect this to create cross-marketing opportunities for both branches of our combined businesses. We also enhance our senior level management team with Mr. Vaisman, who brings a 25-year- deep reservoir of industry knowledge and experience as well as established customer relationships. We expect the integration of both organizations to be swift and smooth. It will immediately enlarge Kellstrom's market share and critical mass and we expect this acquisition, net of one-time-expenses, to be immediately accretive to Kellstrom's earnings.''=20 Yoav Stern, Chairman of the Board of Kellstrom added, ``This is again a case where we concluded that all components are accretive, and not only financially. Mr. Vaisman and his team will add technological and managerial depth to our team. ITC's financial formula was strong and similar to Kellstrom's. However, ITC's ability to maximize opportunities has been limited in the past, and its business will be substantially enhanced as a result of availability of capital resources. We believe, therefore, that the expansion into new market segments (Rolls Royce and JT8D) while leveraging ITC's strong presence, opens up new opportunities for accelerated profitable growth, without paying the costs of penetrating those niches from ground zero.''=20 Kellstrom Industries, Inc. is a leader in the airborne equipment segments of the international aviation services after-market. Kellstrom's principal business is the purchasing, refurbishing (through subcontractors), marketing, reselling and leasing of aircraft jet engines, jet engine parts and commercial aircraft. The Company is also a leading international after-market reseller of turbo-jet engines and turbo-jet engine parts for helicopters and large transport aircraft. The Company specializes in providing engines and parts for large turbo- fan engines manufactured by General Electric, CFMI, Pratt & Whitney and Rolls Royce. The engine types serviced and supplied by the Company cover the vast majority of the total world jet engine supply. The Company is also an approved supplier to an international customer base including major domestic and international airlines, OEMs and engine overhaul shops.=20 The Company, from time to time, may discuss forward-looking information. This press release contains forward-looking statements. These forward-looking statements are based on many assumptions and factors, and are subject to many conditions, including the Company's continuing ability to effectively integrate the acquired company, acquire adequate inventory and to obtain favorable pricing for such inventory, the ability to arrange for the repair of aircraft engines by third-party contractors prior to resale or lease, competitive pricing for the Company's products, customer concentration, demand for the Company's products which depends upon the condition of the airline industry, ability to collect receivables, government regulation, and the effects of increased indebtedness as a result of the Company's business acquisitions. Except for the historical information contained in this release, all forward-looking information are estimates by the Company's management and are subject to various risks and uncertainties that may be beyond the Company's control and may cause results to differ from management's current expectations.=20 - -
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