Focus Company: American Access Technologies (AATK)

By: Max R. Bowser - The Bowser Report - Date: January 7, 2006

Introduction

Joe McGuire, the chief financial officer of AATK, describes his company's business this way: "The communications industry is realizing that wiring/cabling a building makes a lot more sense in zones rather than the miles of long runs with bulky wire running from one corner of the room (the telecom closet) all the way to the last guy at the other end of the room who needs to be wired to the system.

"We make the patented telecommunications enclosures to suit this zone concept, which trims the cost of cable installation and reduces the time to repair equipment, as all ports are accessible directly above or below the end users in the ceiling or in the floor."

A consulting firm studied the benefits of different cabling technologies. An average three-story, 131,000-sq.-ft. building was chosen for demonstration purposes.

Compared were the traditional technology and the newer zone cabling. It was discovered, when technology had to be moved, added to, or changed, that it resulted in a charge of $500. However, zone cabling reduced that cost 65%. And, over a 15-year period, it was estimated zone cabling would save over a million dollars.

The company's zoning concept is protected by three U.S. patents and seven foreign patents.

Omega Metals

The company's Omega Metals subsidiary is a precision sheet metal fabrication and assembly facility, making various products used in the telecommunications industry, including AATK's proprietary zoning enclosures.

Actually, Omega serves a diverse client base of over 300, including technology and electronic companies, mostly in the Southeastern U. S. markets.

The Omega plant has been described as "68,000 sq. ft. of huge bending, punching and drilling machines capable of bending sheet metal into high quality boxes meeting client specifications for use in everything from simple wiring terminals to indicator boxes used by the military to detect toxic chemical agents."

American Access also makes a metal device containing an ultraviolet light designed to be placed a home air conditioning system. It's used to kill germs and bacteria in indoor air.

Financials

This year's Sept. 30 quarter marked the 12th period, out of the last 13, with year-over-year sales increases.

In that third quarter the Company generated net income of $9,006 or $0.00 per share, which was a dramatic $200,427 turnaround (or 104.7%) from the net loss of $191,421 or ($0.03) per share over the comparative three-month period in 2004.

For the nine months ended September 30, 2005, the Company generated a net loss of $61,377 or ($0.01) per share, which was a $623,849 decrease (or 91.0%) from the net loss of $685,226 or ($0.10) per share over the comparative nine-month period in 2004.

Results

	Fiscal Year 2003	Fiscal Year 2004	Fiscal Year 2005 (Nine Months)
Revenues	5,515,000	6,740,000	6,293,400
Earnings	-842,000	-858,000	-61,377
Book Value	0.88	0.80	0.80
Shares_Outstanding	7.4 million

Mr. McGuire, commented on the quarterly results and outlook for the balance of 2005 as follows: "Reporting back to back profitable quarters is a tremendous milestone in the Company's history. The results for the quarter and nine months ended September 30, 2005 show a remarkable achievement compared to the prior six years. Our ability to leverage our record sales growth into profitability in our last two quarters is evidence that we are beginning to strike the right balance between gross margin, sales and earnings. This success is further evidence that our strategies are working and that our unwavering focus on key products, customers and markets is paying off. We require approximately $62,000 in net profit in the fourth quarter to achieve a profitable 2005. "

AATK was also able to finance a new laser-cutting machine and allied equipment for $832,000. And, as management points out, this new machine is enhancing gross margins by expanding capacity, reducing labor costs and utilizing fewer raw materials in the future.

Management

As a group, the officers and directors own 39.24% of the outstanding shares, with John E. Presley, president and CEO, controlling 1,815,254. Erik Wiisanen, v-p of Omega Metals, has 17.81% of the shares, while Mr. McGuire has 10.78%.

President Presley is a registered professional engineer and has been head of AATK since 1999. Mr. Wiisanen was one of the founders of Omega Metals. Mr. McGuire has a Wall Street background.

General information

Market	NASDAQ
Symbol	AATK
Price	$1.73
Contact:	American Access Technologies Inc. - 6670 Spring Lake Road - Keystone Heights, FL 32656
Telephone	352-473-6673
Website	www.aatk.com

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