I Spy Opportunity at Law Enforcement Associates
Law Enforcement Associates Corporation [[LAWE.OB]] is one hidden opportunity that investors have yet to discover. The company manufactures and distributes undercover surveillance products, including both audio and video surveillance solutions, to military, law enforcement, security and corrections personnel throughout the world, as well as other governmental agencies, multinational corporations and non-governmental organizations.
Increasingly, law enforcement agencies have recognized the need for LAWE’s products and services in order to assist them in surveillance operations and protect their communities from the risks associated with terrorism, physical attacks, threats of violence, white-collar crime, fraud and other criminal operations or enterprises. In 2009, the company expects to continue to enhance their distribution network by expanding their range of branded law enforcement equipment by investing in the development of new complimentary products.
Last year, LAWE swung to a profit of $71,853 after experiencing a net loss of approximately $1 million a year earlier. The company announced several new contracts throughout the year to drive top-line results, while management’s cost-cutting program helped improve bottom-line results for the quarter. Meanwhile, the company’s balance sheet also appeared robust with $2.05 million in working capital, $254,705 in cash, and no long-term debt.
Management believes that it will be able to finance its operations and any capital expenditures in 2009 with its cash on hand and cash flows from operations, but may need to seek outside capital to fund a $1.5 million shares repurchase (from redeemable common stock) due on August 1, 2009. The company has traditionally factored existing contracts in order to obtain funding for future growth without issuing new debt or equity.
In the end, LAWE is a robust company that has demonstrated the commercial feasibility of its products by showing a positive net income. Meanwhile, an increase in government spending and a plate of new products should help drive growth going forward. Overall, this company is well-managed and poised for success in 2009.
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