China America Holdings (OTCBB: CAAH)
StockGuru was glad to see CAAH open UP TEN PERCENT, and, based on its intraday high,CAAH is UP AS MUCH AS FIFTEEN PERCENT on FIRST DAY OF COVERAGE and Current Volume is More than 3 Times its Three Month Average
I am glad you were able to follow our weekend coverage on this remarkable company.
Diverse and well managed is the message I was sending.
Now I want to look at what this means in terms of REVENUE.
CAAH and Fourth Quarter Expectations
CAAH announced third quarter earnings on November 14, 2007. Consequently, I believe we should begin to look for fourth quarter earnings in the next few weeks. I thought a close review of third quarter earnings would help in understanding what to expect from the three segments of CAAH.
Revenue to Increase Significantly for Fourth Quarter
CAAH has formally stated that they anticipate revenues for the fourth quarter of fiscal 2007 and beyond will increase significantly when compared to prior periods as a result of acquisition of AoHong. I am impressed by the steady revenue potential associated with AoHong. I understand why CAAH made the formal announcement that solid revenue can be anticipated from AoHong.
AoHong Sells Liquid Coolants
AoHong was purchased in June of 2007. Aohong sells and distributes assorted liquid coolants which are utilized in a variety of applications, primarily as refrigerants in air conditioning systems for automobiles, residential and commercial air conditioning systems, refrigerators, fire extinguishing agents and assorted aerosol sprays.
Aohong sold and distributed approximately:
* 15,000 tons of liquid coolants in fiscal 2006 and approximately
* 12,000 tons of liquid coolants in fiscal 2005
Sales were from:
The repackaging of bulk quantities of liquid coolants into smaller packaging for resale and distribution generated approximately 50% of its net revenues for 2006.
The custom mixing of various raw materials in accordance with customer specifications into a new product represented 45% of its net revenue in 2006. Aohong employs two engineers who work with customers to obtain the proper mixture of chemicals.
The distribution of bulk quantities of liquid coolants directly to customers who in turn resell the product represented approximately 15% of its net revenues for 2006.
Customers of Aohong include manufacturers of:
* automobiles
* refrigerators
* air conditioners
* distributors of coolants
2006 Net Revenues were broken down:
* 33% from manufacturers, including automobile, air conditioners and refrigerator manufacturers
* 32% from air conditioners and refrigerator retailers
* 35% of its net revenues were from the export of products
* 60% of its sales are to automobile and refrigerator manufacturers
Aohong has experienced seasonal surges in demand for refrigerant products from November to June.
Biometrics Segment
In the third quarter Biometrics Segment indicated 19 percent revenue from hardware sales with eighteen percent from service and maintenance and delivered strong sales of software licenses as well. The gross profit margin of the biometrics division was approximately 95% for the third quarter which is attributable to the majority of its revenues resulting from sales and maintenance for which there is no cost of sales.
Toy Segment
The Big Tree toy segment should show an improvement for revenues for the fourth quarter of fiscal 2007. CAAH indicated that subsequent to September 30, 2007, several orders for products were received that would contribute to revenues from this segment during the fourth quarter of fiscal 2007.
CAAH reported in the third quarter gross profit margin of approximately 82% as compared to approximately 52% for the nine months ended September 30, 2006.
I expect to be able to obtain a strong picture of CAAH’s potential with their next quarterly report.
This company has an eye on short term and long term earnings — and they have balanced these two important revenue elements very well.
China America Holdings, Inc.
4503 Nw 103rd Avenue
Suite 200
Sunrise, FL 33351
http://www.senseme.com
Phone: (954) 726-1422
About China America Holdings, Inc.: China America Holdings, Inc. engages in the design, manufacture, and sale of fingerprint-based identification products and systems. It offers biometric BioClock, a network enabled system, which replaces traditional identification devices. The company provides CheckPrint T/A system that authenticates the employee’s identity, tracks total hours, and calculates the correct pay rates, as well as performs employee scheduling, job cost analysis, editing time punches, electronic calculations, and related record keeping functions. It also offers CheckPrint A/C access control systems, which permit access to locked buildings, offices, or other secured areas; CheckPrint ATAC that combines access control, and time and attendance systems; Biometric Distribution Server, which enables other systems to operate in a multiunit configuration; CheckPrint SDK, a software development kit for biometrics, which enable purchasers and licensees to create custom applications for the software and hardware; CheckPrint DTU to secure a computer terminal, files, and folders through fingerprint identification; and CheckPrint SDTU that provides users the ability to secure a computer terminal with fingerprint biometric technology and a smart card.
In addition, China America Holdings holds patent licenses for micro electro mechanical sensors technology to detect unexploded ordinance, including bombs, grenades, shells, rockets, and other explosive devices. Further, the company operates as a distributor of chemical fluorine products, as well as a toy sourcing and exporting company. China America Holdings sells its products through original equipment manufacturers and independent sales representatives to manufacturers, retailers, and other businesses in the United States and China. The company was founded in 1968. It was formerly known as Sense Holdings, Inc. and changed its name to China America Holdings, Inc. on November 26, 2007. China America Holdings is based in Sunrise, Florida.
Forward Looking Statements: This release may contain forward-looking statements. The words “believe,” “expect,” “should,” “intend,” “estimate,” and “projects,” variations of such words and similar expressions identify forward-looking statements, but their absence does not mean that a statement is not a forward-looking statement. These forward-looking statements are based upon the Company’s current expectations and are subject to a number of risks, uncertainties and assumptions. The Company undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise. Among the important factors that could cause actual results to differ significantly from those expressed or implied by such forward-looking statements are risks that are detailed in the Company’s filings, which are on file with the U.S. Securities and Exchange Commission (SEC).