RedChip Visibility, a division of RedChip Companies, Inc., announced that it has issued a Second Quarter 2007 Research Update on Vertical Branding, Inc. (OTCBB:VBDG).
Vertical Branding, Inc. (OTCBB:VBDG) reported solid Q2 results with revenue increasing 286% to $8.6 million from $2.3 million in Q2 2006. Gross margins also improved during the quarter to 55% from 52% in Q2 2006. VBDG's impressive revenue growth and margin expansion can be attributed to strong sales from its ZORBEEZ(tm) brand, the Hercules Hook(tm), and Starmaker(tm) cosmetics product line coupled with an improvement in the cost of goods sold spread across the entire product portfolio. VBDG also improved operating margins significantly during the quarter to 4%.
At a recent market cap of $12.3 million, VBDG shares are trading at less than 0.5x trailing twelve months (TTM) sales of $37.4 million. This represents a sizeable discount to other direct response marketing companies. VBDG has demonstrated its ability to successfully cultivate and distribute products through various channels and continues to deliver solid top and bottom line growth. Sound fundamentals, a savvy management team, and current price levels make VBDG a compelling investment opportunity. We are maintaining a "Buy" rating and assigning a new twelve month price target of $1.70 based on 1x TTM, in line with the peer group.
To receive a complimentary copy of the RedChip Visibility research update for VBDG, please visit:
http://www.redchip.com/visibility/about.asp?page=requestVBDG_Q2_2007.
About RedChip Companies, Inc.
RedChip Companies is an international small-cap research and financial public relations firm with offices in Beijing and Orlando and affiliates in New York and San Diego. RedChip delivers measurable results for its clients through its extensive international market expertise as well as its comprehensive platform of products: RedChip Research(tm), Traditional Investor Relations, Digital Investor Relations, Institutional and Retail Conferences held throughout the United States, and RedChip Radio(tm). To learn more about RedChip's products and services please visit:
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Disclosures
The analysts contributing to this report do not hold any shares of VBDG. RedChip certifies that no part of the analysts' compensation was, is, or will be, directly or indirectly, related to the specific recommendation or views expressed by the analyst in the report. This report is based on data obtained from sources we believe to be reliable, but is not guaranteed as to accuracy and does not purport to be complete. Vertical Branding, Inc. is a client of RedChip Visibility, a division of RedChip Companies. VBDG paid RedChip Visibility $32,400 for the RedChip Visibility Research Program, which includes this report. RedChip Visibility has been contracted by Vertical Branding, Inc. to increase investor awareness of VBDG to the small-cap equity community. In the purview of Section 17(b) of the Securities Act of 1933 and in the interest of full disclosure, we call the reader's attention to the fact that RedChip receives a monthly fee of $7,500 cash and $7,500 of shares of Rule 144 stock per month for investor relations services. In addition, VBDG paid $4,800 to participate in a RedChip Investor Conference.