good summary from a member of another site:
TARGET: $2+ AFTER EARNINGS NEXT WEEK.....AMAZING eCOST TURNAROUND
- On July 9, 2007 announced surprised the street by announcing that its ecost division will post $26 M in revenues in Q2 2007, a 19.25% revenue growth from Q1 2007.
- In a previous CC management estimated that with its new cost structure, eCOST would be profitable when it reached $25M in revenues.
- In Q1 2007 PFSW predicted EBITDA of $8 to $10M for 2007. PFSW reported $2.5M EBIDA for 2006. This is a 300% to 400% improvement!!!
- In Q1 2007 PFSW reported EBITDA of $0.8M
- Based on the above, PFSW will have to average about $2.5M for 2Q, 3Q, and 4Q 2007.
- If PFSW reports a EBITDA of $2.5M for 2Q 2007 on August 14, 2007 it will beat 2Q 2006 by a wide margin. In fact, PFWS might report its first profit in several quarters.
- PFSW 2Q 2006 reported a EBITDA loss of $0.7M due mostly to the very poor eCOST performance a revenue dropped and losses increased significantly. Net loss was $3.2M!!!
eCOST has been the main reason why PFSW has performed so poorly as a stock since it was acquired. PFSW has done an amazing job of turning around this division around as evidenced by the sequential improvement of the last 2 quarters.
The eCOST turnaround is due to improvements in several fronts including customer service, product selection, more efficient marketing, etc.. The turnaround is very timely as the strongest season for this division, the Holiday season, is right in front of us.
PFSW generates about $450M/year in revenues and its market cap is only $46M!.
Fair value has been estimated to be $6 based on comparables is PFSW can return to consistent profitability.
PFSW has a solid balance sheet and solid fundamentals. I expect that it will be trading North of $3 after Christmas. Even at $3, PFSW would still be trading at a deeply discounted P/S of about 0.3.
ABOUT PFSW:
PFSweb develops and deploys integrated business infrastructure solutions and fulfillment services for Fortune 1000, Global 2000 and brand name companies, including third party logistics, call center support and e-commerce services. The company serves a multitude of industries and company types, including such clients as LEGO, Riverbed, Fathead, CHiA'SSO, FLAVIA� Beverage Systems, Hewlett-Packard, International Business Machines, Hawker Beechcraft Corp. (formerly Raytheon Aircraft Company), Rene Furterer USA, Roots Canada Ltd., and Xerox.
Through its wholly owned eCOST.com subsidiary, PFSweb also serves as a leading multi-category online discount retailer of new, "close-out" and manufacturer recertified brand-name technology and consumer electronics for consumers and small to medium size business buyers. The eCOST com brand markets approximately 100,000 different products from leading manufacturers such as Apple, Canon, Citizen, Denon, Hewlett-Packard, Nikon, Onkyo, Seiko, Sony, and Toshiba primarily over the Internet and through direct marketing.
