I'm curious about your prediction of flat Q1 earnings and revenue.  See MD&A comments below.  Even if earnings should remain flat, the company is still trading at 4 X those earnings.  Applying a modest 7-8 times earnings multiple to trailing earnings, places the share price in the $1.54 - $1.76 range.  And that's assuming no growth.  That being said, there's no doubt that they're at the mercy of oil and gas prices and related oil field activity / spending. 


On another note, you have to wonder if the company, should it stay so undervalued, be prime to take private or a possible takeover.  It would also be nice, and beneficial to insiders themselves, to consider a special one time dividend given their cash hoard of over 0.50 / share.  Spending it on acquisitions that would be immediately accretive to earnings and revenue growth would be a possibility as well.  At any rate, we're in good hands.


Have a good afternoon.



Galvanic Canada

Results from this operating segment may significantly impact revenues, margins and consolidated operating results. Fiscal 2012 operating results reflected strong demand for products outside of Canada and management is optimistic that this will continue throughout the next fiscal year. During the first quarter of fiscal 2013 order placements have been strong and backlog levels have been maintained relative to the last quarter of fiscal 2012. Order backlogs continue to reflect demand and project activity in international markets and prospects appear to be positive. The Company has been encouraged by this continued order placement and strong quoting activities. Based on current backlog levels and planned shipments in the fiscal quarter, revenues in the first quarter of fiscal 2013 are expected to be similar to those achieved in the last quarter of fiscal 2012. While the Company is optimistic about its prospects the Company remains cautious in its outlook for the upcoming fiscal year. Beyond the first quarter of fiscal 2013 future revenues and operating results remain uncertain. Order placement, product mix variations and analyzer configurations are difficult to predict and often require long production lead times. This combined with uncertainly related to project activity levels, results in revenues and gross profit that are difficult to predict, therefore future revenues and operating results are uncertain. Based on activity levels, demand from the Canadian market is expected to remain steady throughout the fiscal year. The Company has made solid progress outside of North America and is slowly building its installed base of product. The Company will continue with its targeted sales strategy by focusing on selected geographic markets and believes that by providing competitive equipment and service it will be in a position to take advantage of strong customer demand.

Revenues generated from the Company’s electronic flow products are largely dependant on annual unit volume requirements from its major domestic customer. These volume requirements remain uncertain for the upcoming fiscal year. The Company is a preferred vendor and based on historical contractual requirements from this customer, it is optimistic that it will be successful in securing future orders in fiscal 2013. In view of its reliance on its domestic customer, the Company is focusing its efforts on expanding its customer base in domestic and U.S. markets.




Galvanic Lowell

The Company is cautiously optimistic that this segment will continue to maintain its revenues and operating results in the upcoming fiscal year relative to the prior fiscal year. Quoting activities and order placements have remained steady and order backlogs have been sustained relative to the last quarter of fiscal 2012. As a result of its broad base of products and application expertise the expectation for fiscal 2013 is that this segment will be successful in maintaining revenues for the balance of the fiscal year. While the outlook is optimistic for 2013 there remains some uncertainty. Due to increased competition for orders the domestic market remains a challenge and international revenues are difficult to predict. The Company will continue to take a disciplined approach to manage its cost structure and its goal of maintaining gross margins and profitability. The Company is also addressing its product portfolio in order to expand its markets and evaluating its sales and distribution network.