Our last pick, Fibercore, Inc. (Nasdaq: FBCE) closed Friday at 4 31/32 up $1.03 from our profile price of 3 15/16, a gain of 26% in 2 weeks. This week’s pick profiled at only 1.7 cents offers our reader’s what we believe is a chance to profit from a company that has seized the opportunity to cash in on what is a national disgrace… school bus safety. We believe the time has come to address this issue…

Stockprowler’s pick this week is…

The Majestic Companies, Ltd. (OTCBB: MJXC)

Corporate Web Site: http://www.themcl.com/index.html
Shares Outstanding: 65 million
Public Float: 38 million
Insider Ownership: 17%
Institutional Ownership: none
Market Capitalization: $1,105,000
Closing Price Friday: 1.7 cents

Each day more than 24 million children ride on our nation’s 450,000 school buses, and on average, 11 are killed each year in school bus accidents and nearly 13,000 are injured, some severely. The children traveling on school buses face the same hazards as motorists traveling over freeways, crowded streets, busy intersections, railroad crossings, icy and snow covered roads. Yet, most all school buses on the roads today are not equipped with any type of personal safety system to hold children within the padded seating area during a crash. Many bus accidents involve impacts causing occupants to be violently ejected from their seats and to come in contact with hard surfaces or to be thrown from the school bus through glass windows.

For years, parents have been asking for seat belts on school buses and the federal government has refused to make them mandatory. The federal regulatory body that oversees this issue is the National Highway Traffic Safety Administration (NHTSA), and their position for years has been that school buses, while not accident free, are still one of the safest forms of transportation on the road today. Their argument comes down to this: first, they state that due to the fact that buses greatly outsize and outweigh most vehicles on the road, they tend to sustain less damage in a collision, and second, their safety strategy relies heavily on the concept of "compartmentalization" to protect school children during bus accidents.

Compartmentalization can best be described as the requirement that bus seats and seat backs are padded to absorb the impact energy of passengers during accidents. Unfortunately, compartmentalization does not address the issue of children being tossed around the bus in a serious accident involving a side impact or rollover. A recent school bus accident in Indiana showed the danger. The video tape from a security camera on board the runaway bus showed students flying through the air with nothing to hold them in place.

The federal government’s reluctance to adopt pro-active measures to further reduce passenger injuries on school buses has prompted individual states to pass their own legislation in an effort to improve safety. During the last 10 years, both New Jersey and New York have mandated that standard two-point-lap belts be installed in all school buses. Unfortunately, a recent study has revealed that while seat belts can greatly improve passenger safety on school buses when worn, the reality of the situation is that some industry studies have indicated that up to 90% of the students are not buckling up. In addition to the low rate of use by children on the few buses that are so equipped, seat belts are often a source of trouble during emergency situations often necessitating the cutting of the straps.

San Diego, California based The Majestic Companies, Ltd. believes it has found a novel solution to the safety problem. It’s called the Safe-T-Bar. Unlike seatbelts, students need to do nothing except lift the bar and sit down, gravity pulls the foam-padded bar down into their laps. The device looks like a roller coaster restraint. In fact, the inventor, Adrian Corbett, says he was thinking about carnival rides when he came up with the idea. The Safe-T-Bar is designed to lock into place during a sudden stop, collision or bus rollover, thereby restraining the passenger within the padded seating area. The Safe-T-Bar is a passive restraint system ensuring a high rate of use. In addition, the bus driver can see in his rear-view mirror and note whether the position of each bar is up or down. The Safe-T-Bar can also cut down on driver distraction by keeping children in their seats. Studies have shown that up to 30% of school bus accidents are the result of the drive being distracted. The Safe-T-Bar has been tested to comply with requisite Federal Motor Vehicle Safety Specifications (FMVSS). Also, the company’s patented design has been engineered to satisfy all Department of Transportation (DOT) safety standards. Click here to view video http://www.otcfn.com/mjxc/video.html

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The Safe-T-Bar has recently begun to catch the attention of the national media as evidenced by a feature article in USA Today on Monday, February 19, 2001. The article, entitled “School Buses to Try Safety Bars”, covered the critical issue of adding safety restraints to school buses, and the ongoing public concern of parents, lawmakers and transportation officials to further improve the level of safety on the nation's nearly half-million yellow school buses. Safe-T-Bar has also been featured on San Diego’s NBC affiliate channel 7, San Diego Insider Magazine, The San Diego Union-Tribune, and the nationally syndicated news program eXTRA.

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Presently, there are over 450,000 school buses in service throughout the United States, and each year over 40,000 new school buses are produced. Industry analysts predict the growth in new school bus order will remain strong at around 2% to 4% annually for at least the next 10 years as student enrollment numbers continue to rise and district demographics continue to decentralize. Of the 450,000 school buses currently in service nationwide, a potential market of over 8.0 million restraint devices is available in the event of a federal mandate. At a proposed retail price of $250 per bar, including installation (3 children/seat) this represents a potential market in excess of $2 billion dollars. The company also is pursuing international manufacturing and distribution of the Safe-T-Bar, with a primary emphasis on Canada and Europe.

In addition to the Safe-T-Bar, The Majestic Companies, Ltd. also designs, builds, and markets a line of modular classrooms, office buildings, medical facilities and telecommunication equipment shelters. Majestic’s modular classrooms are being sold both directly to California school districts as well as to third party dealers including G.E. Capital Modular Space, a division of General Electric, principally for lease-back to California’s unified school districts. As a result of net enrollment increases, California’s schools are reported to be among the most crowded in the nation. California voters have strongly endorsed class size reduction programs by passing Proposition 1A, which has appropriated $9.2 billion for the addition and updating of educational facilities. This situation has created a continuing demand for Majestic’s re-locatable modular classroom products. Majestic currently has about 1% of the state modular education market after two and a half years in business and projects to capture a 6% market share by the year 2004.

On March 21, Majestic announced that it has been awarded a $2.4 million contract by the Downey Unified School District to manufacture 45 single and two-story modular classrooms planned for use in their 2001 fall term. Downey Unified, located in Los Angeles County, will be the first to order Majestic's recently completed family of 2-story modular classroom designs. The event marks a significant milestone in Majestic Modular's mission to become a full service provider of state-of-the-art multiple story modular structures. The contract, which consists of 27 single story classrooms and 18 two- story classrooms, has been awarded as a “piggyback” contract. This is significant as it allows other school districts and government agencies throughout California to buy similar single and two-story classroom structures directly from Majestic without going out to bid.

Gerard Lehman, Majestic Modular's president stated, “The long term effects from this contract could be worth much more than the current project value. There are still several modular manufacturers in the California sector that have not offered two-story modular designs. This opportunity will allow Majestic Modular to leverage the experience gained from this project to gain market share in an industry that is certain to increase its utilization of two-story classrooms for many years to come.” Lehman further stated, “It has become increasingly clear that California schools will continue to experience over-crowding for the next several years. Many school districts are running out of real estate and have virtually no other alternative than to implement multiple-story construction. This piggyback contract is very diversified and will be an asset to many school districts, as it will appeal to their various modular classroom requirements.” The company plans on adding at least one additional manufacturing facility within the next 6 months to increase its current output capacity. Majestic believes that this growth strategy is warranted in order to gain market share early and help ensure stability and profit margin for the long term. A company update can be heard at… http://www.wallstreetwebcast.com

The Majestic Companies, Ltd. recently received a Buy recommendation from I.R. International Consultants, Inc., stating the substantial market opportunities for the company through its two subsidiaries. The company has multi-million dollar revenues projected for both divisions in 2001, with Majestic Modular’s annual revenues alone estimated to be more than $8 million by year’s end 2001. “Due to the substantial upside, we recommend a Buy of MJXC for appropriate speculative investors.” Analysts are projecting fiscal 2001 sales at $15 million and EPS of 4 cents.

At less than 2 cents per share, Stockprowler.com views MJCX as one heck of a speculative opportunity. MJXC believes it has created the only real solution to the need for safety restraints in school buses, which could amount to a very significant near-term potential for the company. In addition, MJXC has tapped into the modular classroom market in California, and intends to expand operations into Washington, Oregon and Arizona as the demand for modular buildings in those states increase. MJXC closed Friday at 1.7 cents on volume of 2,565,800 shares. Stockprowler readers are urged to visit the company web site for further information… http://www.themcl.com/index.html. Stockprowler.com does not receive compensation from companies profiled or from third parties associated with the companies profiled. Readers are urged to read the company SEC filings and do their own due diligence before investing in this or any other stock.

Good trading… Stockprowler