Dutton Associates continues its coverage of American Mold Guard (Nasdaq: AMGI) maintaining a Strong Speculative Buy rating and a $4.22 target price. The 8-page report by Dutton senior analyst Mike Loughran is available at www.jmdutton.com as well as from First Call, Bloomberg, Zacks, Reuters, Knobias, and other leading financial portals. American Mold Guard reported Q1FY07 EPS of ($0.27) versus our estimate of ($0.18). Revenues fell 24% year-over-year, but rebounded 15% sequentially. The Company continued to show sequential SG&A improvement, with SG&A falling 3% sequentially despite the 15% improvement in revenue. A significant bright spot in the quarter was a 680 basis point improvement in the gross margin from 42.2% in Q1FY06 to 49% in Q1FY07. Increasing levels of multi-family projects in the mix will continue to drive improvement in this metric. Importantly, AMG Scientific is expected to achieve significantly higher gross margins than the company�s current housing market. A significant bright spot is the company�s multi-family division, which booked $1.7 million of new orders in Q1, representing a significant improvement given total multi-family revenues were $2 million in FY06. Encouraging still was that $1 million of these orders were from existing customers, and $700 thousand were from new, first-time clients. Also encouraging, was that the company achieved new orders from several different regions, indicating that awareness of the company�s anti-microbial process is becoming well recognized throughout the nation, and well beyond the company�s original California market. At current loss rates, the company will likely require additional capital in FY07. About Dutton Associates Dutton Associates is one of the largest independent investment research firms in the U.S. Its 31 senior analysts, primarily CFAs, have expertise in many industries. Dutton Associates provides continuing analyst coverage of over 140 enrolled companies, and its research, estimates, and ratings are carried in all the major databases serving institutions and online investors. The cost of enrollment in our one-year continuing research program is US $3459,000 prepaid for 4 Research Reports, typically published quarterly, and requisite Research Notes. Dutton Associates received $35,000 from the Company for 4 Research Reports with coverage commencing on 9/26/2006. We do not accept payment of our fees in company stock. Our principals and analysts are prohibited from owning or trading in securities of covered companies. The views expressed in this research report accurately reflect the analyst's personal views about the subject securities or issuer. Neither the analyst's compensation nor the compensation received by us is in any way related to the specific ratings or views contained in this research report or note. Please read full disclosures and analyst background at www.jmdutton.com before investing.
American Mold Guard (MM) (NASDAQ:AMGI)
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