THURSDAY - MARCH 20, 2008..... Stocks pulled back sharply Wednesday, erasing most of the previous session's big gains as investors grew concerned about high commodities prices and the possibility that banks remain vulnerable to further problems from soured debt. The Dow Jones industrial average fell nearly 300 points after rising 420 on Tuesday. Some retrenchment was to be expected after the previous day's huge advance. But the decline also reflects investors' continuing uneasiness about the world's financial system and the U.S. economy. Talk swirled about whether further write-downs are in the offing after Merrill Lynch & Co. filed a lawsuit against a company involved in a debt transaction with the investment bank. Merrill claimed in the litigation that Security Capital Assuance Inc. owed it up to $3.1 billion after backing out of financial transactions. News that the government plans to free up billions of dollars at Fannie Mae and Freddie Mac, a move that could help struggling homeowners, for a time helped quell some of the market's fears. But it couldn't stave off selling late in the session by investors who have seen big advances evaporate many times during the course of the credit markets crisis and decided to preserve some of their gains. Investors sent stocks charging higher Tuesday on stronger-than-expected investment bank results and several moves from the Federal Reserve in recent days, including a 0.75 percentage point rate cut aimed at jump-starting the credit markets. The Dow had its second 400-plus point gain in six sessions.

George Shipp, chief investment officer at Scott & Stringfellow, said some investors are still uneasy about the health of the markets. He said back-and-forth days will likely continue as Wall Street tries to feel its way forward. "Nobody wants to make the first move. There is liquidity on the sidelines. It doesn't really know what to do right now," he said, adding that investors are trying to determine whether moves by the Fed and other regulators to stimulate the economy and stabilize the markets will take hold. "Clearly there is fear. I would say the needle is pointing more toward fear than greed right now," he said. According to preliminary calculations, the Dow on Wednesday fell 293.00, or 2.36 percent, to 12,099.66. Broader stock indicators also declined. The Standard & Poor's 500 index fell 32.32, or 2.43 percent, to 1,298.42, and the Nasdaq composite index fell 58.30, or 2.57 percent, to 2,209.96. Bond prices jumped as investors again looked for safety. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.37 percent from 3.50 percent late Tuesday. The dollar was mixed against other major currencies, while gold prices fell sharply. Light, sweet crude fell $4.94 to settle at $104.48 per barrel on the New York Mercantile Exchange after government figures suggested the high price of oil and gasoline are damping demand for petroleum products.

The concerns over the health of the financial system and the economy overshadowed upbeat results from Morgan Stanley, whose earnings indicated that the bank is relatively healthy like Lehman Brothers Holdings Inc. and Goldman Sachs & Co. Investors have been nervous in recent days about even big banks after JPMorgan Chase & Co. struck a deal Sunday to acquire Bear Stearns, which was on the verge of succumbing to credit troubles. Investors' relief over Morgan Stanley follows better than expected earnings news from Lehman and Goldman on Tuesday that gave the Dow its biggest point gain in more than five years. The Dow got an extra boost after the Fed's rate cut. The Office of Federal Housing Enterprise Oversight, which oversees government-backed Fannie and Freddie, said the changes should result in an immediate infusion of up to $200 billion into the market for mortgage-backed securities. This could mean greater demand for mortgages -- an aid for struggling homeowners hoping to refinance at more favorable terms. The Fed has slashed key rates by more than half since last summer, when the mortgage crisis claimed its grip on the global credit markets. But the housing and lending industries are still hurting. Late Tuesday, Visa Inc. launched the largest initial public offering in U.S. history, selling 406 million shares at $44 apiece to raise $17.9 billion. The world's largest credit card processor is not a lender, and many investors are betting that it will easily survive the faltering U.S. economy and credit climate. The stock traded up $12.50, or 28 percent, at $56.50. Declining issues outpaced advancers by more than 2 to 1 on the New York Stock Exchange, where volume came to 1.97 billion shares compared with 1.95 billion shares traded Tuesday.

Commodities pulled back somewhat on the strength of the dollar which say its strength zapped after spiking early. The agricultural sector saw huge pullbacks as many started to take gains after many began speculating that the rate cuts might be nearing an end.

With little ammo left for the Fed, the bottom might have been found for the dollar and with that, commodities may begin to see a slowdown in their prolonged rally which is good news for consumers.

While the financial freeze begins to thaw, the next catalyst on the horizon is first quarter earnings which are being reported over the next few weeks. One of the names expected to report a good quarter is ArvinMeritor Inc. (ARM).

The Company is a global supplier of a range of integrated systems, modules and components serving commercial truck, light vehicle, trailer and original equipment manufacturers and certain aftermarkets. The company serves commercial truck, trailer and specialty original equipment manufacturers and certain aftermarkets, and light vehicle manufacturers.

On Tuesday, the Company announced that operational improvements and Performance Plus savings in the second quarter of fiscal year 2008 were overwhelming adverse market conditions in North America.

As a result, ARM expects quarterly results which were significantly better than the previous quarter and the comparable quarter a year ago. The Company noted improvements in cost reductions in direct material, overhead and labor and burden; increased throughput in the company’s European facilities resulting from improved operational performance; higher sales of military and off-highway vehicles and a lower tax rate.

The Company also announced that through the end of February 2008, it had implemented initiatives associated with its Performance Plus profit improvement program that will reduce costs by $75 million per year on a run- rate basis.

The improvements were expected to produce earnings from continuing operations for fiscal year 2008 in the range of $1.40-$1.60 per diluted share, before special items. Consensus estimates had called for earnings per share in the $1.32 range.

While the auto industry isn’t the greatest to be in, the Company has carved a niche and expects to produce better than expected results while continuing their diversification internationally. Investors would be wise to watch.

SI International Adjusts Cost
Structure as Program Delays Trouble Investors
Trading on SI International Inc (SINT) was down 19.796% following news that Bank of America’s belief that the company’s revised guidance is related to a delay in the expected award of the Enterprise Program Management contract and funding delays related to its IPv6 and Second Line of Defense contracts. In an 8k filing dated March 18, 2008, CEO Brad Antle stated, "SI International is experiencing a delay in the funding that we had anticipated would make a positive contribution to our first quarter operating results. Specifically, we have been carrying staff in anticipation of these program starts, which has resulted in a high level of unabsorbed overhead expense. We believe these programs will make a positive contribution to the balance of this year. Until the revenue materializes, we have made adjustments to our cost structure to keep in line with our revised revenue expectations. This is being done in a way that will not compromise our investment in key future growth areas. I am confident that the long-term fundamentals of our businesses remain solid and that our industry dynamics will improve in the back-half of the year." Despite the news, Bank of America maintains a buy rating, as there are also significant opportunities in this segment abroad. According to Chairman Tom Davis of the Committee on Government Reform, Asian countries have aggressively adopted IPv6 technology, and governments invested hundreds of millions of dollars. China has been extremely aggressive and Japan has set up an IPv6 Promotion Council, using tax incentives to encourage research and adoption of IPv6 by its private sector. Europe initiated country and regional IPv6 task forces across European states for global cooperation around the world. Europe’s task force and the Japanese IPv6 Promotional Council forged an alliance to foster worldwide deployment. The decline highlights pressure within SINT’s defense business, according to Jefferies, adding that management doesn’t have much room to invest in developing segments. In the company’s most recent 10K filing, it was reported that total backlog as of December 29, 2007 was approximately $1.45B, of which approximately $180M was funded. Subsequently, the company derived approximately 46% of total revenue in fiscal 2007 from DoD and the Intelligence community. As of December 29, 2007, SI had approximately $94.3M of term debt and $20M of revolving credit debt outstanding under its credit facility. In addition, it had $40M available for borrowing under the revolving credit facility. On February 13, 2008, SI amended and restated the credit facility, increasing the amount available under the revolving line of credit to $140M and reducing its outstanding term debt from approximately $94.3M to $60.0M. After the closing of the amended and restated credit facility, it had outstanding term debt of $60M and approximately $56.7M of revolving credit debt outstanding. SI says it now expects Q1 revenue will be between $128M and $130M, below the Thomson First Call consensus of $136M. EPS is expected in range of $0.24 and $0.27 per share, south of Street estimates for $0.33 per share. For the full year 2008, co. is guiding for revenue in the range of $560-$580M and earnings of $1.40 to $1.50 per share, both below analyst expectations of $583M in revs and earnings of $1.59 per share.

Superclick Reports 4% Decline on
Gross Margin as Company Aims to Clear Debt
Shares of Superclick Inc. (SPCK) fell 8.182% following Tuesday’s earning’s call in which the company reported Q1 revenues of $1.45M, up 90.79% from a year ago, but with a Q1 EPS of $0.00. During the call, the company reported that a 4% decline in gross margin for the quarter over the previous year was the result of lower margin mixes in its installation business for the quarter. Superclick’s revenue by segment was approximately $732,000 in net sales for the IP management platform, up 208% over the same period last year mainly due to the increased installation work. Superclick’s current liabilities total approximately $1.6M of debt consisting of $1.3M in the form of a convertible debenture to financial parnter CVP and the remaining $260,600 in debt to Hotel Net shareholders. Said the company, "Investors seem to be a little jittery about the possibility of CVP converting from time to time. We’d like to clear out all debt as soon as possible, so we are working very closely with CVP on a month-to-month basis. We will continue to pay down our debt to our note holders and we look forward to reporting a clean balance sheet within the next year." Regarding developments of its media distribution system application, the company is in the early stages of identifying online advertisers interested in advertising on its potentially large hotel footprint. Superclick’s plan is to grow this footprint large enough to gain interest from the top online advertisers, which started with three major hotel groups that combine a total 11,000 hotels or 1.4M rooms about deploying Superclick’s pilot sites.

Astro-Med’s Stock Rises After
Reporting Improved Margins, New Orders
Shares of Astro-Med, Inc. (ALOT) were up 7.547% following Wednesday’s earning’s call in which the company reported Q4 revenues of $18.13M, up 3.19% versus a year ago. Q4 EPS was $.18. Adjusted Q4 EPS was $.12, up 9.09% from a year ago. Although orders for cockpit printers will be installed on nearly all recently announced passenger and military aircraft--including the Airbus A380 and Boeing 787--the company reported that last quarter it experienced delays in these programs. New orders, however, reached $74.3M, an 11% increase over the same quarter last year. Although the company’s stock price has declined in recent years, several investors during the call noted the company’s operational improvements. Gross profit margins for the quarter saw a 10.5% increase over the prior year as a result of product mix, better aborption and lower manufacturing costs. However, administrative expenses were higher from the previous quarter due to incentive programs that weren’t achieved until the fourth quarter, which tended to increase the overall spending. The company plans to attend the B. Riley Investor Conference, tentaively scheduled for lat May, early June.

Endologix CEO Presents at Conference; FDA
Cites Increased Risk w/Medtronic’s AneuRx(R)
The President and CEO of Endologix Inc (ELGX), Paul McCormick, made a presentation Tuesday at the Lippert/Heilshorn Life Sciences Virtual Conference. The Company develops, manufactures, sells, and markets minimally invasive therapies for the treatment of cardiovascular disease. Its Powerlink System is a catheter and endoluminal graft (ELG) for the treatment of abdominal aortic aneurysm (AAA), a weakening of the wall of the aorta, the artery of the body. The Powerlink System consists of a self-expanding cobalt chromium alloy stent cage covered with an ePTFE graft. The Powerlink ELG is implanted in the abdominal aorta, which is accessed through the femoral artery. The implantation causes the blood flow to be shunted away from the weakened or aneurysmal section of the aorta resulting in the reduction of pressure and potential for the aorta to rupture. Mr. McCormick added, "There is a 75% mortality rate if AAA ruptures. Most patients are asymptomatic. Traditional surgery has significant complications. There is a longer time in operating room and longer hospital stay. The mortality and morbidity rates are also high. 18% of patients in a survey said they would not undergo AAA repair knowing the recovery process, even though they appeared to fully understand the implications of AAA rupture." The Company sells its Powerlink System primarily in the United States, Europe, and Latin America. According to Mr. McCormick, "The worldwide market is $500 million today and expected to be $1 billion by 2011. The U.S. market is well defined. There are 919 hospitals that perform 80% of AAA procedures. We also expect to launch our product in Japan in the first half of 2008." He concluded, "We have had twelve straight quarters of domestic sales growth. We are increasing our sales force productivity. We expect to see continued margin improvement in 2008 and be cash flow positive from operations in 2008." There are currently three other FDA-approved devices for this procedure. The others include Medtronic’s AneuRx(R), Cook’s Zenith(R) and W.L. Gore’s Excluder(R). It is important to note that the FDA said Tuesday it saw a higher death rate among patients treated for abdominal aortic aneurysms with a Medtronic’s AneuRx(R) compared to conventional surgery after five years. In a public health notification posted to the agency’s Web site, the FDA said it was focusing on Medtronic’s AneuRx stent-graft system because it’s the only currently marketed device that has a significant number of patients who have been followed for at least five years after receiving a device. The agency said, it has longer-term data "that suggests aneurysm-related mortality continues to increase 3 years post-implant, reaching 1.3% by year four and 1.5% by year five." The FDA said those rates are "substantially higher" than the mortality rate for open surgical repair that average 0.18% per year.

APPROVES SIX NEW HYBRID RICE SEEDS TO ITS PRODUCT LINE: Origin Agritech Limited (SEED) announced it has approved six new rice hybrid varieties to its product line for distribution during the next sales season in 5 provinces throughout Southwest regions of China. The Company now has a total of 67 rice seeds approved for sale throughout China. The rice seed approval process is the same as the process for corn seed, and is one of the most rigorous regulatory requirements in all of China. The approval requires the applicant to undergo two growing seasons of monitored growth in at least five different locations in the region. Seeds submitted for testing are planted together with control seeds, which are typically the most popular seeds in the testing regions. Only seeds that have an increased yield of 5-8% or higher versus the control seeds are cleared to proceed to the second year of testing. Following the announcement, shares spiked to the $5.25 area before losing the gain and were currently trading at $5.15, up .6% on the day.

RAISES GUIDANCE FOR Q3 2008 TO $70M-$72M: LaBarge, Inc. (LB) raised its earnings guidance for the fiscal 2008 third quarter and now expects to report net sales of $70M to $72M and diluted earnings per share of $0.23 to $0.24. These anticipated results would significantly exceed the current year’s second-quarter net sales of $67.1M and diluted earnings per share of $0.21, and last year’s third-quarter results of $59.6M in net sales and diluted earnings per share of $0.18. For the first half of fiscal 2008, the Company reported net sales of $126.2 million and diluted earnings per share of $0.37. LaBarge expects to announce fiscal 2008 third-quarter results on May 1, 2008.

ANNOUNCES REVERSE PURCHASE OVERRIDE & $1B IN CONVERTIBLES: Thornburg Mortgage, Inc. (TMA) has entered into a 364-day agreement with five of its remaining reverse repurchase agreement counterparties and their affiliates who are providing approximately $5.8B of reverse repurchase agreement financing. The company must further reduce its current reverse repurchase agreement borrowings outstanding with two reverse repurchase agreement counterparties by an additional combined $1.2B. The company plans to achieve these reductions either through asset sales or transfers of collateral specified in the agreement. Once these reductions are completed, the company estimates that this agreement will affect approximately $7.9B of outstanding principal amount of mortgage securities with an estimated dealer market value of $6.4B as of March 5, 2008. Within seven business days Thornburg Mortgage must raise minimum net proceeds of $948M in new capital. The company intends to use a portion of those proceeds to pay reduced but currently unmet margin calls on reverse repurchase agreements and to auction swap providers of $530M plus deficiency claims of $28.7M and additional claims estimated to be $30M. In connection with the agreement, the company will also issue warrants to purchase approximately 47M shares at an exercise price of $0.01 per share.

RECEIVES U.S. PATENT: Sirtris Pharmaceuticals, Inc. (SIRT) announced that the United States Patent Office issued to Sirtris the first patent covering a broad class of compounds that activate the enzyme SIRT1. Several Sirtris compounds--or new chemical entities (NCEs)--from this class lower glucose and improve insulin sensitivity in preclinical models of Type 2 Diabetes. The patent covers the first NCE that Sirtris plans to take into a human clinical safety trial in the first half of 2008.

SUBSIDIARY SELLS FRANCHISE TERRITORY: Yes! Solar, Inc., a wholly owned subsidiary of Solar Power, Inc. (SOPW), announced that it has executed a franchise agreement with The McCarthy/Myers Investment Group of Southern California to launch a Yes! Solar Solutions(TM) franchise to serve Orange County, California, the first solar franchise it has sold in California. The territory covers approximately 800 square miles and is home to about 625,000 owner-occupied dwellings and many commercial enterprises. Electric rates in the Orange County area, coupled with the California Solar Initiative (CSI) program, make it an attractive market for the Company’s Yes! turnkey solar solutions.

ANNOUNCES PIPE FINANCING: Uranerz Energy Corporation (URZ) announced that it will raise approximately US$23,676,000 via a brokered private placement of 4,000,000 units and a non-brokered private placement of 5,865,000 units, including 5,465,000 to Denison Mines Corp. ("Denison"), at a price of US$2.40 per unit. Upon closing of the private placement Denison will own approximately 9.9% of the issued and outstanding common shares of Uranerz.

SUBSIDIARY RECEIVES ORDERS FOR REPLACEMENT PARTS WORTH $900K: Air Industries Group, Inc. (AIRI) announced that its wholly-owned operating subsidiary, Air Industries Machining Corp. (AIM), has received orders for original and replacement parts with a total value in excess of $900,000. The orders, received during the week ended March 13, 2008, were received from divisions of the United States Department of Defense, Northrop Grumman Corp., and other customers. A significant portion of the orders reflect AIM’s position as a valued aerospace supply chain partner and its participation in aftermarket manufacturing programs, such as Sikorsky BLACKHAWK spare parts and a number of programs relating to replacement parts for landing gear assemblies.