With the U.S. Dept. of Energy estimating an investment of approximately $412 billion dollars (or roughly the Federal Deficit in FY 2004) will be required to provide enough additional electrical generating capacity to fuel the country over roughly the next quarter century - the need to conserve power is reaching epic proportions.

Another Big (Repeat) Order

In a world where conservation is crucial, Nighthawk Systems Inc. (OTCBB: NIHK) is cashing in on its proven ability to develop Telemetry or M2M products capable of remotely controlling virtually any electronic device in the world - from your kitchen light to a diesel generator.

Announcing a deal today with El Paso Electric (one of NIHK's largest historical customers) as part of an ongoing automation program, the company continues to log progressively larger orders and revenue figures with a growing number of repeat and first time customers. Simply put, business has never been better!

Big Names - Big Contracts

For those of you that are new to the deal, just one year ago, NIHK closed at $.04 (3/31/06). Since then, the stock has trended upwards, reaching a high of close to $.25, before settling back into the dime range where its sits today.

The run up has been by no means artificial. Nighthawk is now experiencing record revenue growth and positioning itself for very bright future in the surging M2M space via partnership with a terrific trio of telemetry partners in Verizon Wireless, American Messaging (formerly SBC Global), and Skytel (a division of Bell Industries).

Improving Utility Efficiencies

As electricity consumption increases (EIA estimates 40% bump in usage by 2030), trumping today's record levels - electrical utilities are still faced with an age old problem: Even as costs skyrocket and demand increases, it's the utility not the consumer that feels the pinch.

This is evidenced by electricity prices failure to keep pace with inflation during 1985-2000 (1.1% vs. 2.4% per yr.) as well as consumption reaching record levels today as average household spending declines.

In effort to optimize efficiencies and not get buried, the industry invests heavily in improvement. With electrical companies expending an estimated $1.9 billion on Demand Side Management (DSM) programs in '05 and saving enough electricity during 1985-2000 to power nearly 74 million average U.S. homes for one year - the willingness to pay for infrastructure enhancement is quite evident.

A Diamond in the Rough?

Although other options exist for quenching America's growing thirst for natural resources exist - such as simply ramping up current production levels and developing alternative/renewable energy sources - becoming more energy efficient is by far the most economical choice and seems to be where the industry is placing its chips for the time being.

This is where NIHK is poised to build a much improved position in the surging M2M marketplace - and remember - electrical utility optimization is just one of many potential cash cow applications at Nighthawk's fingertips (check the 7/11/07 on cell tower automation deal w/Verizon)

With Nighthawk expecting to report "its highest quarterly revenue results in four years, with revenues increasing more than 50% over the first quarter of 2007 and approximately 35% over the same quarter in 2006" and all industry trends pointing towards go, we think that NIHK is on the verge of building a blockbuster M2M hardware company.

Labels: M2M, Nighthawk, Nighthawk Systems, Nighthawk Systems Inc., NIHK, Telemetry