Corporate Snapshot >>
Name: |
RPM Technologies, Inc. |
Outlook: |
Growth |
Shares Out: |
10.0 Million |
Industry: |
Containers & Packaging |
Ticker: |
(OTC BB: RPMM) |
Est. Float: |
425,000 |
| Trading Statistics >> |
Recent Price: |
$ 0.49 |
12 Month Trading Range: |
$ 0.20 - $1.60 |
Avg. Volume: |
10,000 shares |
Market Capitalization: |
$ 4.9 Million |
RPM Technologies- Environmentally Friendly Storage Solutions for the 21st Century
- Since their introduction in the 1930's wooden pallets have become a ubiquitous component of the storage and transportation of consumer goods, with an estimated 600 million pallets manufactured in the US during 2000. However, as wooden pallets have become essential in a number of applications, they have created a burgeoning environmental and ecological hazard. The production of wooden pallets uses over 4.7 billion feet, or nearly a million acres, of hardwood trees annually. Moreover, the disposal of used wooden pallets (which must be discarded after as little as 3 uses) has created an increasing landfill problem, and with an estimated 6 wooden pallets for every American they now represent more than 4% of all solid waste in landfills. By comparison, plastic pallets represent a tremendous improvement. They are impervious to contamination, easy to clean, store, and ship; plastic pallets weigh less, have more load bearing capacity, and far more durability than wood pallets. Since they can be recycled into new pallets when worn out, they represent an eco-friendly alternative to the ever-present wood pallet.
- Roughly 90% of the North American pallet market is currently based around wood, but with increasing environmental and regulatory concerns and the decreasing cost structure of plastic pallets the market is shifting by 3-5% per year from wood to plastic- within 5 to 10 years the market will be 50-50% wood to plastic. With a comprehensive product offering of a low cost, high quality line of plastic pallets made from recycled materials, RPM Technologies is well positioned to capitalize on this explosive shift in pallet construction and design.
- RPM Technologies has begun a significant ramp-up in its revenues with introduction of a new 48"X48" plastic pallet to its line and an inexpensive 40"X48" pallet for export sales, and with development of a substantial and rapidly growing custom-size pallet manufacturing business. With delivery of new extrusion and compression molds expected by the end of 2003, and with additional financing to fund future growth, we believe that RPM Tech. will be able to dramatically expand production and sales throughout 2004, with monthly sales well over $1 million. Contingent on fulfillment of several large orders, we anticipate that the Company will attain revenues of $8-10 million for FY 2003. Based on these projections, and relative to leading small cap competitors within the containers & packaging industry, who trade at an average of 1.25x FY 2003 revenue expectations, RPM Technologies is significantly undervalued in the immediate term and is currently priced at a discount of at least 100%. This low valuation is especially undeserved in light of the Company's tremendous anticipated revenue growth from 2004, and its leading position within a rapidly expanding plastic pallet marketplace.Therefore, by applying the peer grouping's average FY 2003 P/R multiple of 1.25x to the Company, we can arrive at a relative valuation of approximately $1.00-1.25 per share.
- RPM Technologies, Inc. (OTC BB: RPMM) is a leading manufacturer and marketer of high quality recycled plastic pallets in the $35 billion worldwide pallet market. By offering a wide range of environmentally-friendly, more durable, and stronger plastic pallets at a superior price point to both traditional wood pallets and competitive plastic pallets, the Company is well positioned to emerge as a leader in the $10 billion US segment of the pallet industry.
INVESTMENT HIGHLIGHTS
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RPM Technologies' plastic pallet line is stronger, more durable, and cost-effective than wood pallets traditionally used. Other advantages include lighter weight, greater load bearing capacity. The Company's plastic pallets are also significantly less expensive than competitive plastic products currently on the market.
- RPM has developed a comprehensive line of plastic pallets, including stackable, nestable, rackable, fire retardant, and FDA-approved pallets (used in the food and drug industry). The Company is bolstering this base pallet line with the addition of significant new product lines with 48"x48" and export model 40"x48" plastic pallets, as well as launch of a custom pallet manufacturing business. The addition of the custom business is unique within the industry and should provide up to $5 million in sales in FY '03 alone.
NEAR TERM GROWTH PROSPECTS
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Well positioned within a domestic pallet market estimated to exceed $10 billion. While the majority of this market is wooden pallet based, increasingly there is a shift in new production of roughly 3-5% annually towards plastic pallets and within 5-10 years, the market will be 50-50% wood to plastic.
- The Company has built a growing roster of customers including major Fortune 500 companies, including Toyota, Exxon-Mobil, Dow Chemical, and Federal Mogul, as well as the US Department of Defense. The Company's wide product range and its ability to produce custom designed pallets should further bolster future sales.
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Disclaimer: The opinions and analysis included herein are based from sources believed to be reliable and in good faith, but no representation or warranty, expressed or implied, is made to their accuracy, completeness or correctness. We will not be held liable for any loss directly or indirectly incurred by anyone relying on any information obtained from this report. This includes, but is not limited to any loss caused in whole or part by reliance on the content, expression of opinions or interpretation of news, events, financial information or anything else found in this report. SAFE HARBOR FOR FORWARD-LOOKING STATEMENTS: Except for historical information contained herein, are forward-looking statements that are made pursuant to the safe harbour provisions of the Private Securities Reform Act of 1995. Forward-looking statements involve known and unknown risks and uncertainties, which may cause a company's actual results in the future periods to differ materially from forecasted results. Information herein contains or incorporates by reference "forward-looking statements," including certain information with respect to plans and strategies of the featured company. As such, any statements contained herein or incorporated herein by reference that are not statements of historical fact may be deemed to be forward-looking statements. There are a number of important factors that could cause actual events or actual results of the Companies profiled herein to differ materially from these indicated by such forward-looking statements. For further details concerning risks and uncertainties, see the SEC filings of RPMM including the company's most recent quarterly and annual reports. This memorandum may not be reproduced, republished or otherwise distributed without the prior written consent of the author.
Interested in RPM Technologies, Inc. Investments?
RPM Technologies, Inc. (RPMM) was incorporated in Delaware
in 1997 for the express purpose of manufacturing and marketing material
handling products. We became a publicly trading company in 2000 and have
shown steady growth since market entry. We are poised for continuing growth
in the months and years ahead.
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