CLRT… Celerity Systems, Inc. is a provider of advanced digital set top boxes and video servers for the interactive television and high-speed Internet markets. Celerity recently announced its selection by the Ohio School Facilities Commission to provide a Digital Education System for grades K through 12 for the Adena, Ohio school district. On Friday, Celerity announced a second contract with In4Structures and Bala Multi-Family Investment Co. to install its interactive television system in new projects. In addition, Celerity is presently beta testing its interactive set top boxes with Interactive Medical Systems at a Los Angeles hospital. Globally, Celerity has recently signed agreements with Unisys Corporation to sell its interactive video and high-speed Internet products in Asian markets. CLRT closed at 8 cents Friday, up over 70% for the week.

     STRX… Trading in Star Telecommunications, Inc., a provider of global telecommunications services, was halted on Friday morning at 10:34 EST. Trading did not resume for the rest of the day. Trading was not suspended by Nasdaq, rather, it was halted pending news… news which is likely to have a significant impact on the stock price. Speculation is rampant on the message boards that STRX is in merger/acquisition negotiations. Rumors seem to be centering on IDT. IDT(NYSE) is the largest shareholder in STRX and also has $1.2 billion in cash. Should the speculation prove correct, STRX will likely resume trading at a price considerably higher than where it was halted at 12 cents… it could be a wild ride.

Stockprowler’s pick this week is…

  Fibercore, Inc. (Nasdaq: FBCE)

• Corporate Web Site: http://www.fibercoreusa.com/
• Shares Outstanding: 54.2 million
• Public Float: 22.2 million
• Insider Ownership: 37%… also Tyco Electronics Corp. owns 22%
• Institutional Ownership: (8) 1%
• Market Capitalization: $213.6 million
• Closing Price Friday: $3.94

      Charlton, Massachusetts based Fibercore, Inc. (Nasdaq:FBCE) is involved in the development, manufacturing, and marketing of optical fiber and optical fiber preforms for the telecommunications and data communications industry. Preforms are the basic component from which optical fiber is drawn and subsequently cabled. The company believes that its patented process offers manufacturing-cost and capital-investment advantages over the processes currently in use by competitors for the manufacture of optical fiber.  Fibercore’s manufacturing facilities are located in Jena, Germany and Campinas, Brazil.

     Optical fiber is the backbone of the Information Superhighway, which carries billions of bits of information every second for a variety of applications, including telephone (voice), cable television (video), E-mail and Internet (data), collectively referred to as (Voice, Video & Data) or "Multi-Media" communication. A recent study has revealed that the total volume of data and Internet traffic in general is doubling about every 4 months… and that new applications such as streaming music and video will suck up even more bandwidth. In 2001, U.S. companies alone are expected to install another 27.5 million miles of fiber, up 24% from 2000.

     Optical fibers are solid strands of hair-thin, high quality glass which are usually combined to form cables for transmitting information via light pulses from one point to another. The fibers consist of a core of high-purity glass that transmits light encased within a covering layer designed to reduce signal loss through the side walls of the fibers. Information transmitted through optical fibers is converted from electrical impulses into light waves by a laser or light emitting diode. At point of reception, the light waves are converted back into electrical impulses by a photo-detector.

     Communication by means of light waves guided through glass fibers offers a number of advantages over conventional means of transmitting information. Glass fibers carry significantly more information than metallic conductors and, unlike metallic conductors, are not subject to electromagnetic or radio frequency interference. Signals of equal strength can be transmitted over much longer distances through optical fibers than through metallic conductors and require the use of fewer repeaters (devices which strengthen a signal). Further, fiber-optic cables, which typically consists of numerous optical fibers encased in one or more plastic sheaths, are substantially smaller and lighter than metallic conductor cables of the same capacity, so they can be less expensive and more easily installed, particularly in limited conduit or duct spaces.

     There are two basic types of communication optical fibers: multi-mode fiber and single-mode fiber. Multi-mode fiber has a larger core (the area where the light travels) than single-mode fiber, carries less bandwidth and is more expensive. It is generally used over relatively short distances in wiring buildings and groups of buildings. The electronics and the connectors required to work with multi-mode fiber are less costly than the electronics required for single-mode fiber. For example, the light source for multi-mode fiber can be light emitting diodes, while single-mode fiber requires laser light sources. Single-mode fiber is used in long-distance trunk lines (cables between cities) and fiber-to-the-curb (cable from a central office to the curb in front of an office building or home).

     FiberCore's goal is to be a major worldwide supplier of single-mode and multi-mode optical fiber and preform by developing and implementing technological advances and establishing manufacturing facilities to meet customer demand. The company is planning to build additional manufacturing plants in the USA and the Pacific Rim. This is necessary in order to meet the future global market demands: created by the ever increasing need for additional bandwidth required to support wide and local area networks, and generated from strategic alliances and joint venture partners.

     In addition, Fibercore intends to manufacture both single-mode and multi-mode optical fibers for independent cablers. The company’s product/market focus is Europe and the US for multi-mode fiber and overseas markets, including countries from the former Eastern European Block, the Middle East, Asia, and the Pacific Rim for single-mode preform and fibers.

     Fibercore reported sales for the three and nine month periods ended September 30, 2000 of $13,188,000 and $23,054,000, respectively, compared to sales of $2,824,000 and $7,850,000 for the same periods in 1999. This represents an increase of $10,364,000 or 367% for the three months and of $15,204,000 or 194% for the nine months ended September 30, 2000 compared to the same periods in 1999.  Additionally, sales from Fibercore’s German subsidiary increased by $1,150,000 or 41% and by $3,396,000 or 43% for the three and nine months ended September 30, 2000, respectively, compared to the same period in 1999. The revenue increases are primarily due to increases in product shipped to new and continuing customers, as well as increases in the prices of the company's products.

     Gross profit improved to $3,859,000 (29% of sales) and $6,281,000 (27% of sales) for the three and nine months ended September 30, 2000, respectively, compared to $261,000 (9% of sales) and $1,004,000 (13% of sales) for the same periods of 1999. The company anticipates that the gross margins will continue to improve as production levels are increased and as cost reductions and process improvements are implemented at both its German and Brazilian facilities.

     The company recently announced that it expects record 4th quarter 2000 sales. “Overall, the year 2000 will be a record year in sales and operating income for the Company,” said Dr. Aslami, President and CEO of FiberCore, Inc. “We also expect results for the New Year to exceed our 2000 performance, based on strong customer demand for our products, despite the softness that has been recently reported in other sectors of the industry. To complement this rapid growth in sales, a significant production expansion is underway that will provide the capacity needed to satisfy customer demand, as well as to improve manufacturing efficiency.” As of March 1, 2001 the company reported it had a record backlog of orders totaling an incredible $271 million. Commenting on the contracts, Bob Sebesto, Vice President of Global Sales and Marketing said, “FiberCore is one of the few, if not the only manufacturer of specialty fibers such as Radiation Hardened as well as fibers with special coatings for military applications. These products were developed several years ago after a number of competitors discontinued manufacturing these special fibers. Since then, FiberCore has been qualified on a number of key U.S. and international programs, which are beginning to ramp up.” Adding to its breadth of specialty fibers, Fibercore recently announced the introduction of its new GigaGrade multimode fibers, a product that is optimized to provide long link lengths at Gigabit speeds in laser-based systems.

Shares of FBCE closed Friday at 3 15/16 on volume of 86,700 shares. With the current heavy backlog of orders and sales in Europe running extremely strong, Stockprowler.com views Fibercore as a strong speculation with very high long term potential reward. Fibercore has few independent competitors and has demonstrated impressive sales growth over the past year. Tyco Electronics Corp. has invested heavily in Fibercore and owns 22% of the company. Stockprowler.com urges readers to read the company SEC filings and do their own due diligence before investing in this or any other stock. Stockprowler.com did not receive compensation from the company or third parties for writing this report.  Please read our disclaimer.

Good trading… Stockprowler