Focus Company: ACE*COMM Corp. (ACEC)

By: Max R. Bowser - The Bowser Report - Date: August 31, 2006

Introduction

ACE*COMM Corporation is a global provider of network business intelligence and operations support systems (OSS) solutions for telecommunications service providers and enterprises.

ACEC's analytical tools extract knowledge from all types of networks. This knowledge is used by its customers for asset recovery, revenue assurance, cost reduction operational efficiency, acceleration of time-to-market for new services and more effective customer care.

For over 20 years, ACE*COMM technology has been effectively developed among more than 300 customers, spanning over 4,000 installations in 70 countries.

Accomplishments in past 12 months

Parent Patrol

Lucent Technologies (NYSE:LU), on June 8, announced it has signed an agreement to integrate ACE*COMM technology into Lucent's mobile services, enabling global wireless carriers to now offer their customers unprecedented parental control of mobile services. (This is primarily an ACEC development.)

The new service, called "Parent Patrol", permits parents to set limits on their children's mobile phone usage (i.e. how much time they can spend on the phone, when they can use it, who they can call and how much money they can spend on fee-based voice, text or multimedia services.

Editor's Note: According to a recent survey 1 in 5 teenagers use mobiles to talk to people their parents wouldn't approve of.

It offers a solution for parents who would like to provide their offspring mobile phones, but might be concerned about their use. Parent Patrol is more flexible and more effective than simply relying on basic prepaid or similar time-limiting schemes to restrict phone use. Such plans only limit how much time a child can spend on the phone, not when they can use it, or who they can call.

In just 20 days after this new ACE*COMM/Lucent program was announced, a Tier-1 North American service provider agreed to use Parent Patrol in one of its regional divisions, starting later this year.

Results

Fiscal Year 2004 Fiscal Year 2005 Fiscal Year 2006 *
Revenues 13,671,000 19,961,000 20,127,000
Earnings -5,892,000 -6,462,000 812,000
Book Value/Share 0.40 0.32 0.34
Shares_Outstanding 17.55 million
* Results for fiscal year 2006 only first 9 months.

Management

George T. Jimenez has been CEO since 1983 and took the company public in 1996. He is ACEC's largest individual holder with 11.78 percent of the shares.

Conclusion

This is a clean-cut financial operation, with practically no long-term debt. And, there are no governance problems here as executive salaries are modest.

Editor's Note: ACE*COMM also received a buy recommendation from The CHEAP Investor its July issue.

General information

Market NASDAQ
Symbol ACEC
Price $2.54
Contact: ACE*COMM Corp. - 704 Quince Orchard Road, Suite 100 - Gaithersburg, MD 20878
Telephone 301-721-3000
Website www.acec.com

© Max R. Bowser - The Bowser Report

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