IVEH... Ives Health Company announced that its T-Factor® has been successful in increasing T-Cell (CD-4) cell counts in HIV patients by an average of 18 cells per milliliter of blood per month, with some patients averaging as much as 65 cells per milliliter of blood per month. The Java Project was a landmark AIDS study carried out by Dr. Slayton-Bedeen, an Immunologist and T-Factor® Founder, along with the World Health Organization (WHO) in Jakarta and Bangkok. The project found that new hormonal inhibitors of the Human Immunodeficiency Virus (HIV), like T-Factor®, might initiate profound and sustained suppression of HIV replication. The T-Factor® formula was administered to 186 HIV-Positive patients of Asian descent with elevated HIV RNA and decreased CD-4 counts over a period of 24 weeks. The results were dramatic, with over 80% of patients experiencing documented decreases in HIV RNA and enhanced CD-4 counts after 24 weeks.

    ACEL... Alfacell Corporation, a leader in the development of ribonucleases for therapeutic applications, announced that its anti-cancer agent ONCONASE® has received Orphan Medicinal Product Designation in Europe for the treatment of patients with malignant mesothelioma. Malignant mesothelioma is found in the lining of the lungs, abdomen or both, and is most often associated with asbestos exposure. It has a latency period of 25-30 years and is believed to be under-reported. Currently, there are 3,000 to 3,500 new cases reported per year in the U.S., and similar incidence in Europe. Alfacell has also broadened its research and development relationship with the NCI. The two will be working together to link single-chain antibody gene sequences to Alfacell's flagship product ONCONASE. Under the new CRADA (collaborative research and development agreement), Alfacell and NCI will identify and select proteins appropriate for fusion with ONCONASE for the selective targeting of a variety of tumor types. The biological anti-tumor properties of these fusion proteins will be evaluated in vitro and in vivo using appropriate tumor cell lines and animal models. The goal of this collaboration is to develop a new generation of “targeting” anti-cancer agents.

Stockprowler’s pick this week is...

Pacific Aerospace & Electronics, Inc. (NasdaqNM: PCTH)

Corporate Web Site: http://www.pcth.com/

Shares Outstanding: 34.3 Million

Public Float: 31.2 Million

Insider Ownership: 9 %

Institutional Ownership: (9) 1%

Market Capitalization: $15 Million

Closing Price Friday: $0.438

    Pacific Aerospace & Electronics, Inc. (NasdaqNM: PCTH) based in Wenatchee, Washington is an International engineering and manufacturing company specializing in technically demanding components, designs and assemblies for global leaders in the aerospace, defense, electronics, medical, energy, telecommunications and transportation industries. The company designs, manufactures and assembles its products utilizing specialized manufacturing techniques, advanced materials science, process engineering and proprietary technologies and processes. Pacific Aerospace is organized into three operational groups: U.S. Aerospace, U.S. Electronics, and European Aerospace. Each of these groups is composed of a number of operating divisions:

U.S. Electronics Group

    The company's U.S. Electronics Group develops, manufactures and markets a wide array of complex hermetically sealed electronic connectors and assemblies, ceramic capacitors and filters, relays and solenoids, and flat panel display units. These products are used for specialized applications in the aerospace, defense, telecommunications, energy, medical and electronics industries.

    Pacific Aerospace formed the Applied Technology Division of its U.S. Electronics Group toward the end of fiscal 2000. The purpose of the division is to apply the Company's proprietary and patented technologies to provide technical solutions to difficulties faced by high-tech manufacturers that are challenged by extreme environmental conditions, primarily in the fuel cell, telecommunications, and implantable medical products industries.

U.S. Aerospace Group

   At the company's facility in Entiat, Washington, the U.S. Aerospace Group's Casting Division designs and manufactures precision cast aluminum parts using permanent mold, sand and lost foam casting technologies. At the company's facility in Tacoma, Washington, the division designs and manufactures aluminum, bronze, iron and steel parts using sand casting technology. The company's U.S. Aerospace Group's Machining Division operates a precision machine shop in Wenatchee, Washington, that produces precision machined components, structural parts and assemblies principally from aluminum, titanium, stainless steel and explosively bonded metals.

    The company's U.S. Aerospace Group's Engineering & Fabrication Division resulted from the combination of two companies that it acquired in fiscal 2000. In the beginning of the fiscal year, the Pacific Aerospace acquired Skagit Engineering & Manufacturing, Inc. This segment of the business fabricates component parts, completed assemblies and tooling, and fully manufactured industrial products. Later in the fiscal year, it acquired Noav-Tech Engineering, Inc, which provides comprehensive aerospace design and related engineering services, primarily for the commercial and defense aerospace industries.

European Aerospace Group

    At the Welwyn Garden City and Birmingham facilities in England, the European Aerospace Group's Forming Division uses hot and cold metal forming technologies to manufacture titanium and aluminum assemblies and details for the commercial aerospace and defense industries. The division also performs finishing, welding, brazing and riveting processes on these parts. The company's Welwyn Garden City facility specializes in hot and superplastic forming of titanium. At the Birmingham facility, the European Aerospace Group's Forming Division specializes in the stretch and cold forming of aluminum alloys used for aircraft skin panels, leading edges and acoustic panel liners.

    In Rochester, Worcester and Sittingbourne, England, the European Aerospace Group's Casting Division manufactures aluminum investment castings and aluminum and magnesium precision sand castings. At the Company's Worcester, England, facility, the European Aerospace Group's Casting Division manufactures aluminum investment casting products, including aircraft and defense system components. At the Rochester, England facility, the division manufactures aircraft components such as pressure tight fuel connectors.

    The company's European Aerospace Group's Casting Division is one of only four licensees of the computerized Sophia Process, which the division uses to manufacture significantly larger, more complex castings than can be made as a single part using more traditional investment casting processes. At the Company's Sittingbourne, England, facility, the European Aerospace Group's Casting Division manufactures aluminum and magnesium alloy precision sand castings, including machined and finished parts for the commercial aerospace, defense and motorsport industries. The European Aerospace Group also has a sophisticated machining center that supports the group's casting and forming operations. The group's machining facility has the technical capabilities to provide a full range of machining services for complete production and finishing of components, including design, pattern production, casting and final machining of a component.

    Pacific Aerospace & Electronics is highly competitive because of its technical capabilities, including its strong product development expertise. The company has collaborated with over 600 customers worldwide to develop challenging products that meet specific design and performance criteria. The company utilizes specialized manufacturing techniques, advanced materials science, process engineering and proprietary technologies and processes to its competitive advantage. PA& E has specific expertise in: investment, sand and permanent mold casting technologies, as well as its licensed Sophia investment casting process; precision machined metals; hot and superplastic forming of titanium; cold forming of aluminum and titanium; chemical milling; explosively bonded exotic metals; polycrystalline ceramics; diffusion bonding; metal matrix composites; ruggedized electronic packaging; discoidal capacitors; and LCD lighting systems. The Company owns over 35 U.S. patents, maintains an active program for protecting its proprietary rights and has a number of additional patent applications pending.

    The worldwide market for commercial aerospace, including components, is projected by industry sources to be over $600 billion during the first decade of the new millenium. The U.S. Department of Defense estimates that defense procurement funding will grow to $60 billion by 2001. According to the Economic Industries Alliance, the worldwide market for electronics and components produced in the U.S., is nearly $500 billion and has been growing at 11% annually. Having developed strong customer relationships with global leaders, the Pacific Aerospace is well positioned to capture a growing portion of these large worldwide markets.

    On January 12, 2001 Pacific Aerospace announced financial results for its second quarter ended November 30, 2000. The company reported revenue of $27.4 million, and a net loss for the quarter of $4.9 million or ($0.14) per diluted share. For the first six months of fiscal 2001, the Company's revenue was $55.1 million. Although the Company continued to experience strength in its U.S. Electronics Group businesses, second quarter sales declined as compared to sales for the second quarter of the prior year primarily as a result of lower revenue in both the Company's U.S. and European Aerospace businesses.

    Don Wright, Chairman and CEO of Pacific Aerospace said “Historically, the second fiscal quarter has been slow for all PA&E operations due to the seasonal factors associated with that period. Notwithstanding this fact, this quarter was a disappointment to us all. As previously disclosed, certain key markets, particularly those served by our U.S. Aerospace Group remain depressed and continue to negatively impact our operating performance. Our revenues have been negatively affected by heavy truck build rates impacting our Casting Division, commercial aircraft build rates impacting our Machining Division, and new product development efforts by our Engineering & Fabrication Division. We are continuing to make changes at these operations to react to current market conditions and to prepare for when these markets recover. Furthermore, we have announced our intention to sell our European operations. The proposed sale of Aeromet, coupled with adjustments in our other operations, is intended to provide the resources for PA&E to better support our U.S. customers and operations by substantially reducing debt. It is also expected to allow for acceleration in the growth of our core patented and proprietary technologies. Our goal is for these actions to dramatically improve the company's balance sheet and lead the company to sustained profitability.''

    President Bush has made it clear that he intends to rebuild our military strength with a particular emphasis on strategic defense initiatives. Many observers believe that military electronics developers/manufacturers will be prime beneficiaries of the new increased military spending due to the anticipated increase in demand for defense electronic systems such as radar and missile guidance systems. This past week made it all too clear that we must defend ourselves from the proliferation of rogue nations like Iraq and their ability to build and deploy ballistic missile systems.

    Shares of PCTH closed Friday at 7/16 on volume of 137,800 shares. With a book value of $1.20 and with the sale of its European operations estimated to fetch anywhere from $50 to $85 million, Stockprowler.com views Pacific Aerospace as very undervalued. Apparently we aren’t alone in our thinking... Bankers Trust Company of New York is reported to have established a postion in Pacific Aerospace before the close on Friday. Speculation is strong that the Fed will cut interest rates another 50 basis points next week likely sparking a rebound in the techs which are in the basement. The wild card with Pacific Aerospace is its fuel-cell technology... at 44 cents this stock looks very cheap to us.

Good trading... Stockprowler