According to CEO William R. Council III:

The first quarter of 2008 was another eventful and productive period for the Company. We are pleased with our financial performance, which we believe reflects our continued success in generating operating results at our facilities through a combination of census mix and rate increases. I am particularly pleased with the integration of the Texas facilities, demonstrating that the Company can successfully implement our culture and systems to improve the operations of acquired facilities.

The renovation program continues on schedule with excellent results. We expect to complete two more renovation projects by the third quarter of 2008, and have plans underway for additional projects.

• Littlefield Corp. swings to a loss in Q1 - Quarterly earnings for Littlefield (LTFD.OB) came in a bit light. However, if it can pull off the sale of the catering business, this may still be a stock to watch.
• Banks.com, Inc. Adds Record Number of Registered Subscribers and Users During 2008 Tax Season: Financial News - Yahoo! Finance - Think of Banks.com (BNX) as a poor-man’s Marchex (MCHX) but with a little effort it could use Bankrate’s strategies to squeeze more cash flow from its domains
• Global Aircraft Solutions Announces Sale of One 737-200 Aircraft to Pamir Airways - GACF takes another step to improve its balance sheet, but the turnaround is far from complete.
• Onkyo Becomes Latest Microprocessor Patent Licensee - Another big CE name signs licenses the Moore Patent Portfolio, but these deals will never generate enough cash flow to please PTSC investors long term.
• Technical Communications Corporation Reports Results for the Second Fiscal Quarter Ended March 29, 2008 - TCCO rallied into the earnings report but sold off on the news. Though profits dipped a bit year over year, revenue growth was strong and backlog is impressive. Between existing backlog and the new Egypt contract, I highly doubt the dip is deep or prolonged.

DISCLOSURE: No positions.

CRYSTALLEX INTERNATIONAL CORPORATION (Toronto:KRY.TO - News)(AMEX:KRY - News) has become aware that the Director General of the Administrative Office of Permits at the Ministry of the Environment and Natural Resources of Venezuela (”MinAmb”) has issued a communication to the Corporacion Venezolana de Guayana (”CVG”), the owner of the Las Cristinas concessions, denying a request for the authorization to affect natural resources to carry out exploration activities in the mining area of Las Cristinas in Sifontes, Bolivar State.

In issuing the communication, the Director General cites sensitivities surrounding indigenous peoples, the small miners and the environment in the area generally known as the Imataca Forest Reserve, which contains a number of mining projects, which like those of Crystallex, are seeking the required permits to continue their development and exploitation.

On the news, Crystallex shares dropped as low as $.50 and closed at $.91. The company says it is considering options “including an application for reconsideration.” Its time for Crystallex to be honest with investors. If Chavez wanted Crystallex to get the permit, it would have received the permit. As I stated last August, the fact that the permit decision was taking so long suggested that Chavez was not lending his support.

I think its game over for Crystallex and Las Cristinas. I’m not sure what the company is worth without its flagship venture, but it sure isn’t worth its current market cap of over $280M.

DISCLOSURE: No position.

• FlagshipPDG Announces Fourth Quarter and Annual Results - after 2 years of disappointment and losing 75% of its value, PDGE reported positive EBITDA and narrowed GAAP losses. Is a rebound coming?
• California Supreme Court Refuses to Review Appellate Court Decision in Miller Case - the ruling denies $10.5M in potential claims, so its a big deal for Collector’s Universe (CLCT)
• Bullish on Chinese Microcaps - Seeking Alpha - time for a field bet? I’m not so sure, though I like several of his picks
• Industrial Distribution receives better buyout offer - nice to see management handle an auction well
• Synalloy Corporation Announces First Quarter Results - not a blockbuster quarter, but better than many expected
• China Solar & Clean Energy Solutions, Inc. Announces Record Fourth Quarter and 2007 Year End Results - very strong quarter from the company formerly known as Deli Solar.
• The Final Frontier - I agree with DealBreaker that these put trades look awfully suspicious.

DISCLOSURE: Long SYNL and a few Chinese microcaps. No position in other stocks mentioned.

At least for microcaps, the growth premium is as small as it has ever been. There are scores of promising companies that can be bought at valuations just slightly higher than their stodgy, underperforming counterparts.

Ideally, here are the criteria I like to see:

- strong year-over-year sales growth

- low, or at least reasonable price-to-sales and enterprise value-to-sales ratios (a nod to my value side)

- UPOD: under-promise, over-deliver. Executing on a fixed strategy is very important to both future growth prospects and management credibility.

- positive earnings. I don’t need to see huge earnings growth, as long as revenues are moving. But if margins are slipping I want it to be for a strategic reason, not because the company was forced to discount or had too much inventory, etc.

- No debt handcuffs. That means that debt must be manageable in amount, maturity and covenants. If its not shareholders will be diluted.

- Reasonable year-over-year growth in the # of shares. Why buy shares in a 50% grower if its share count is also growing by 50%? Obviously this consideration has to be flexible where acquisitions are involved, but beware of huge option grants.

Two examples of growth gems are Secured Digital Applications (SDGL.OB) and Air Industries (AIRI.OB).

Secured Digital, a microcap provider of mobile communications services and business process outsourcing (BPO), just announced stellar 2007 earnings. Revenues grew 30% year-over-year to $47.7 million, and net income grew a whopping 147% to $1,622,621. SDGL reaffirmed its previously announced 2008 revenue forecast between $55 - $60 million and net income in the range of $2.5 – $3.5 million.

What kind of multiple would you be willing to pay for that growth? Yahoo! indicates that the market cap. is only $16.89 million, giving Secured Digital a price-to-sales ratio of less than 0.4 on 2007 revenues and around 0.3 on 2008 projections.

Aerospace equipment manufacturer Air Industries also reported strong results this week. Net sales increased to $46.1 Million, up 40% year-over-year (versus a market cap. of only $16.59M). Gross profit margin shot up from 15.2% to 27.6%. While net income was only $627,900, at this trajectory it should grow pretty quickly. Air Industries has a record backlog, and that’s before the pending acquisition of Blair-HSM, which could add another 30% to revenues. Sure, there is some debt, but it appears manageable.

With stocks like AIRI.OB and SDGL.OB trading at such cheap prices, why bother with no-growth companies?

DISCLOSURE: Long AIRI.OB and SDGL.OB.

• Patriot Scientific Reports Q3 FY’08 Results - market really hated this one, sending shares down over 20%. I was a very early fan of PTSC but have been skeptical since it peaked. With the big settlements behind it, how can PTSC justify its valuation?
• Candente: Copper Worth Looking At - Otto Rock via Seeking Alpha, on why Cadente is a likely takeout at a much higher price
• China 3C Group Enters into Supply Agreement with Wal-Mart Stores in Zhejiang Province - CHCG needed a little good news after the latest dour outlook.
• YTB International Reports Total Revenue of $141 Million and $3.2 Million Net Income for 2007 - YTBLA is en fuego, rising from below 1 to around 4 in just a few weeks (chart). The funny thing is I never even heard of this company.
• The Short Case for Origin Agritech - Interesting read but imo this stock was rides up and down on the fancy of momo traders.
• BAB, Inc. Reports Profit for 1st Quarter FY 2008 - Earnings hold steady at my favorite publicly-traded bagel company. As long as they do, I’ll keep collecting that huge dividend.

DISCLOSURE: Long CHCG.OB, BABB.OB. No position in other stocks mentioned.

We believe that this quarter’s year-over-year decline in pay-per-view revenue will be the last one connected with that re-rate, and that starting next quarter we should again resume a year-over-year growth trend in that business.

That trend will be assisted by a number of factors. Key among these is the launch of a third channel on the nation’s largest DBS platform. This launch has materially improved our revenue performance on this platform. We expect these results to improve further over the coming months as we optimize our line-up on this platform with even stronger performing services.

On VOD, New Frontier continues to be the performance leader. On the systems we are able to track via third party research, our services outperform our nearest competition by at least 25% on a revenue per server hour basis.

(transcript courtesy of Seeking Alpha).

Technically, the weekly chart looks like NOOF has stabilized and is putting in a bottom. I bought NOOF Wednesday at $4.60. With continued profitability, I like the odds that the stock will turn around. The 10+% dividend pays shareholders richly to wait for the reversal, so I don’t mind being a bit early.

UPDATE 4/5/08: For an extremely well-reasoned counterpoint, please read the series on NOOF at Off The Beaten Path.

DISCLOSURE: Long NOOF.

• ICTV Reports Its Financial Results for the Year Ending December 31st 2007 - This television marketer of so-called beauty products has been an impressive performer.
• Air Industries (AIRI.OB) delays 10-K - The company says that no changes are anticipated from previously reported results, and that they will file within 15 days (in a separate press release AIRI says it will file April 6).
• BIDZ.com’s Inventory Disclosures: More Questions - Former fraudster Sam E. Antar (of Crazy Eddie fame) takes aim at BIDZ accounting.
• Eternal Technologies (ETLT) Announces Year-End Results - Per share earnings increased $.03 per share to $.14 per share from $.11 last year.  The 10-K provides more detail.  Apparently the “roll mutton” business, whatever that means, is going gangbusters.

DISCLOSURE:  Long AIRI.OB.  No position in other stocks mentioned.

• GeoPharma Poised for Rapid Revenue, Earnings Growth - via Seeking Alpha. This stock has burned investors so many times I can’t believe anyone is still pumping writing about it.
• 3 Undervalued Stocks with Strong Technicals: Emergent Biosolution, Boots & Coots, Gushan Environmental - via Seeking Alpha.
• HQ Sustainable Maritime Announces Record Results for the Fourth Quarter and Full Year 2007 - Sales up 46% yoy, EBITDA up 84%. Net income for 2007 was $0.543 per diluted share. Nice job Norbert!
• NetSol Technologies Selected for Additional Land Record Automation Project for the Islamabad Capital Territory - Looks like a smaller deal for NetSol, but the company says that it strengthens its position in the running for a piece of a huge $300M regional contract.
• Banks.com, Inc. Reports Fourth Quarter and Fiscal Year 2007 Financial Results - This mini-Marchex used to turn a tidy profit, but slipped into the red last quarter. Sure, it has some good domains, but I don’t like its recent acquisition of a “subscription” stock brokerage.
• Paragon Technologies, Inc. Q4 2007 Earnings Call Transcript - (via Seeking Alpha). Not a great quarter but the balance sheet remains strong, cash balance is huge, and backlog is rising.
• Cal-Maine’s dividend shines light on egg maker’s earnings - Egg producer could give shareholders as much as $.67, or 2%, for the quarter. CALM plans on dividending out 1/3 of earnings every quarter, so if it can keep up the strong results it will have a great yield going forward.

DISCLOSURE:  Long PTG, NTWK.  No position in other stocks mentioned

• Willis Lease Finance Reports Record Earnings Per Share of $1.66 in 2007 - Interesting company…Willis leases jet engines to commercial airlines. $1.66 earnings 07, $12.81 share price, $108M market cap. COO says “We continue to see significant opportunity for further growth.” Adding WLFC to my watchlist.
• RadNet Shares Fall on Auditing Concerns - that dip didn’t last long
• Dongfeng-Nissan Automotive Finance (DNAF) China Goes Live With NetSol Technologies’ LeaseSoft Solution - Its always nice to see a positive announcement days after entering a long position.
• Elixir Gaming Slides on Weak 4Q Results - If EGT executes, it could be promising. No reason to jump the gun, though. I’m waiting for profits.
• Dangerous Curves - Forbes.com - Penthouse plans to go public (again) and link with partners like microcap New Frontier (NOOF)
• Don’t Move on Move, Inc. - from Zacks.com. Could be a survivor of the real estate meltdown?
• Departure of New CFO Doesn’t Bode Well for China Solar - from China OTC Player (via Seeking Alpha)
• Arrhythmia Research Technology, Inc. Announces Fourth Quarter and Year End Results: Financial News - Yahoo! Finance - HRT’s fourth quarter disappointed — $.07 vs $.21 last year. I expect the stock will open down big on Monday.

DISCLOSURE: Long NTWK. No position in other companies mentioned.