Knobias Clip Report (11-16-2007)

Submitted By Knobias ClipReport

NASV: Attempting to Automate Profits in 2008

Automation is becoming an integral part in today’s world. As the cost of producing products by hand increases, machines are constantly being found as viable replacements for labor intensive tasks and mundane jobs.

The growth has already taken place in many industries from mail sorting to automobile production. The ability of companies to work 24/7 without breaks at a lower cost per unit has caused demand in automation to soar over the past decade.

The use of automation is now seeing its spectrum broadened and applied to many other tasks that have historically been reserved for lower wage, lower skilled employees.

One company in the industry that is attempting to garner some of this $400 billion industry is National Automation Services, Inc. (NASV). The Company is building a strong network of automation and controls companies through key acquisitions in every major city such as Las Vegas, San Diego, Los Angeles, San Francisco, Phoenix, Denver, Dallas, Chicago, Miami, New York, and Seattle. Through such synergistic acquisitions, NASV is able to capitalize on national contracts for such entities as Army Corp. of Engineers, TSA and major airlines among others.

An integrated company, with separate regional operations, allows large clients to deal with one organization for their automation control needs, while dealing with local operations in the fulfillment of those contracts. Furthermore, the cost synergies derived through the elimination of duplicate administrative, accounting and back office functions, allows the consolidated organization to achieve higher profit margins than if each entity continued to operate separately.

The Company has been public for less than a month, yet has announced multiple contracts and an acquisition.

On October 25th, the Company announced that its Intuitive System Solutions Inc. subsidiary signed a contract with the Virgin Valley Water District in Mesquite, Nevada for $1.02M for certain specialized automation equipment and services. On November 1st, NASV reported that its subsidiary had procured a $260,000 contract with a 35% margin for an expansion and automation of the baggage handling for a major national airline at McCarren International Airport in Las Vegas. On November 6th, the subsidiary announced a $42,000 contract with a 60% margin for an upgrade of 42 RTU stations for the Las Vegas Valley Water District. On November 15th, the Company announced another contract at the McCarren International Airport but this time for $107,897 with a 35% margin for Southwest Airlines. The contract was for an upgrade to the Southwest Airline Node 8 Control room. The Company also noted that it was awaiting award of an automation project from the Southwest Water Reclamation Facility, which would be valued at $1,300,000.

During this time the Company announced the acquisition of Intecon Controls located in Phoenix, Arizona for a combination of cash and restricted stock worth $1,750,000. Intecon was noted as specializing in engineered controls, UL certified panel facility and systems integration.

In each of the press releases announcing these contracts, the Company also submits guidance which projects them achieving gross revenues in 2007 of $4,544,094, with a net pre-tax income of $1,781,688.

Through an acquisition strategy that encompasses a minimum of one major acquisition per quarter, as well as through internal growth of ISS, due to its recently granted increase in licensing capacity to $2 million per project, the Company should also increase gross revenues to $25,780,972 in 2008, with net pre-tax income of $16,190,755. With a total of 40 million shares outstanding the management of the Company projects earnings per share of $0.03 in 2007 and $0.27 in 2008.

In any event, with the growing numbers both top and bottom line and with the Company being in a growing market, it merits mention as a name to follow over the coming months. Investors would be wise to watch.



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