“Your big opportunity may be right where you are now.” -Napoleon Hill
A Reason to Love Red Light Cameras
Nighthawk Systems Inc. (OTCBB: NIHK) continues to set the table for a feast in ‘08 while many other small-caps prepare for famish. Announcing today that they have entered into a burgeoning new market with a brand new, higher margin product, the hawk appears destined to soar in the coming months.
First and foremost, the company’s traditional offering can help save time, money, and energy in virtually any application that utilizes an electronic device. The product is popular and is selling in droves. In an economy on a quest for value, NIHK’s offering is not a bad value-proposition.
Diversifying Revenue Streams in 2008
Although deals with energy-related utilities have driven sales to record levels (Q3 sales were the best in 4 yrs.), NIHK’s fast-growing offering has been adopted across a vast range of applications. From diesel generators for Verizon Wireless and the State of New Jersey, to exhaust fans at DaimlerChrysler’s (NYSE: DCX) Trenton, Michigan engine plant, the company has made some very nice moves over the past year to expand out of its core niche.
This of course, is all in addition to logging their largest remote disconnect order ever and continuing to sign on and retain electrical utility customers at a record pace. Also, don’t forget that NIHK recently purchased an IPTV set-top box business that brings with it just under $1M in sales which should hit the books in 2008 (½ came with the sale, about ½ came directly after). This number will grow with any additional orders. Note: To put this into perspective, consider the fact that NIHK logged about $899,000 in revenues for ALL of 2006.
Back to Today’s News:
The company announced today that its partnership with American Traffic Solutions, Inc. (”ATS”) has led to an initial order of 600 Nighthawk wireless-control and reboot units. According to today’s news release, NIHK has developed a new product line that meets the specific needs of its partner and brings with it higher returns than the company’s traditional offering.
One thing that may go unnoticed to the un-trained eye is the fact that although it may be like comparing apples to oranges, this most recent order (600 units) is actually bigger than NIHK’s previously stated, largest-ever remote disconnect order (500 units). Although I do not have any price point information, the sheer size of the initial order, coupled with the fact that NIHK has developed a stellar reputation for attracting, larger, repeat orders, have me very optimistic regarding the implications of this deal. On an even more positive note, management stated today that the product has applications in many industries outside of photo enforcement.
Great Read on ATS: “Nonstop growth helps traffic company accelerate”
More on ATS. . .
Based in Scottsdale, Arizona - ATS is a leading domestic player in the high potential photo traffic safety and enforcement solutions market. Dedicated to technological improvement (ATS was 17 yrs. early to market by some accounts) the company has brought on nearly 200 new employees over the past year in order to keep pace with industry growth and demand for its solutions.
Now battling neck and neck with Redflex Holdings (RDF.AX) - another potential NIHK customer - for domination of the US marketplace, ATS plans to integrate Nighthawk’s wireless control system into their existing technology. By employing the Nighthawk wireless control module, the ATS system will have the ability to wirelessly access and control power to equipment at each site independently and simultaneously from a central source. This is another example of how NIHK’s products help make their customer’s more efficient.
The Low-Down on Photo Enforcement
With research indicating that there are more drivers on our roads than ever before and also that drivers, even those who admit to frequent speeding, think traffic enforcement is too lax (40% of a 2002 survey stated that there was too little enforcement of red light running and speeding), the need for automated enforcement solutions as a complement to traditional methods is paramount. In a testament to their effectiveness, a review of red light camera studies around the world concluded that cameras reduce red light violations by 40-50 percent and reduce injury crashes by 25-30 percent.
In response to these trends, cities and states around the nation have tested red light cameras with tremendous success and are increasingly adopting solutions to help make their communities safer. With photo enforcement solutions now proven to lead to safer driving habits, reduction in traffic crashes, hindrance of dangerous/aggressive driving - while saving lives and increasing police and public safety - widespread adoption is ramping up and ATS is helping to lead the way in North America.
To give you an idea of the value-add here: According to the World Report on Road Traffic Injury Prevention issued in 2004 by the Worth Health Organization and the World Bank “the benefits of speed cameras outweigh their costs by a three-to-one margin, without taking fine revenue into account” In addition, although it is a bit dated, the following tidbit of information exemplifies perfectly the need for automated traffic control systems: in 2000,
the cost of speeding related crashes in the U.S. was an estimated $40.4 billion, or $76,865 PER MINUTE!With the majority of competition in the space coming from International counterparts (RedFlex Holdings and Gatsometer B.V. are two key players), ATS is rapidly emerging as a key player. Just to provide a point of reference, ATS reportedly now has about 700 cameras operating nationwide and 1,110 under contract while Redflex recently hit the milestone of 1,000 operating contracts back in November. So, clearly, ATS is kicking butt and taking names when it comes to its penetration of North American roadways.
While many small-cap ventures flounder in the market, NIHK continues to cash in on its proven ability to develop products that save its customers time and money. Now partnered with the likes of Verizon Wireless, American Traffic Solutions, and American Messaging, NIHK targets a broader range of markets and applications than ever before with a seemingly constantly evolving offering. I like what I’m seeing out of the company and expect more good news to follow. Check back soon for updated coverage on NIHK and our opinion on why the company is definitely one to watch in the New Year
.
Leave a Reply
Stock Ticker (OTCBB): LBAS
Website: Click here to visit.
Click here for more on this Spotlight Company »
The question is not whether or not the U.S. Federal Reserve Bank will cut its benchmark lending rate today, but if in fact the cut will have any impact on our wounded economy.
Whether the cut is .25 or .75 points – either of which would bring the rate to an all-time low, economists fear that the benefits simply won’t trickle down the consumer. Recent rate cuts have done nothing to boost the consumer credit market because given current economic conditions, the banks that aren’t going under find that issuing consumer loans at anything else than a premium is far too risky.
A great example of this is the current market for auto loans. Typically influenced by the prime rate, which was roughly 4%, Monday, the interest for a 48-month new car loan is 6.8%.
With Americans now hoarding their money and growing increasingly content with simply not losing their hard-earned greenbacks, the Fed may need to expend some of its “extra ammunition” in addition to its imminent rate cut to get consumers to start spending again.
So, what happens when the rate hits zero and its back to the drawing board for Big Ben and his crew? Here’s a great report written by Ben Bernanke himself on potential strategies for monetary policy when the key rate hits zero.
Have something on your mind? Ask questions of the editor here. We pride ourselves on our prompt responses.
Don’t forget, our FAQ is pretty extensive and was built by answering questions just like yours. It may already have the answer you are looking for but if not, we are standing by to help.
P.S. If you see any posts that are inappropriate, sponsored or could be considered a misuse of the forum, please report them to the editor so they can be moderated, removed or blocked. Thank you for your help in keeping this forum poignant and useful.
Thank you!
The MSP Team
