Salon City Inc. (SALN)

[Stayeven]

Proftstocksny2...SLON REVENUES AND EARNINGS:

Here are my estimates...forward P/E:

200K magazines per issue X 10 issues = 2M mags sold in one year.
2M mags x $3.99 (cost to buy a mag) = $7.98M

45 ads X $20K (cost to place an ad) = $900K in ad revenue per issue.
$900K x 10 issues = $9M annual ad revenue

EARNINGS:

$8M yearly revenue for selling the magazines
$9M revenue for the ads

minus $2M for printing and distribution of the mags
(.75 to print, .25 for distribution...I was right on)

minus $3M for the the retails cut of the price of the mags
(I just added this today...didn't think about it before)

minus $1M for operating expenses (rounded up)

= 11M yearly earnings

FORWARD P/E:

The projected yearly earnings is $11M and with approx. 1B shares, that comes to .011 per share.

With a P/E ratio of 15 the PPS would be .165
With a P/E ratio of 20 the PPS would be .22

SLON is only going to continue to grow. The more mags that they distrubute the more they will be able to charge for ads, thus generating more revenue.

WE ARE WAY UNDERVALUED, IMO.

Stayeven

P.S. I subtracted the estimated amount that retail stores will make for selling the mags and updated the add revenue for 200K mags per issue. AND in the CC today Steve said his printing presses can print as many mags as he wants...even 1M if they grow that much. That's good news that no extra equipment will have to be purchased.

In 2008, I expect SLON to make aquisitions and become a parent company to beauty products...free advertising in their mags for every product that they own...can't get any better than that.