There is no way they will have profit this Q, and I don't think the demeaning tone of your reply to DMiller is very appropriate. It seems that SWSH mgmt is the one who doesn't understand what EBITDA and Profit are.
"SWSH is profitable and will show that Monday. I was at the meeting two weeks ago in which Steve said the following:
Expects revenue for this year to come in over 200 million, and next year over 300 million.
He expects EBITA (profit in case you didnt know..gotta assume that with your postings) margin to come in between 10 to 18 percent"
I referred to INCOME, not EBITDA versus Revenues ...that's what is important to PE ratio.
2009: Revs=$56.8M, Income=-($7.3M) loss
2010: Revs=$63.6M, Income=-($17.6M) loss
$200M revenue in 2011 is possible (buy enough com companies), as is -$30M is loss (current model/trend). There is little likelihood with their currently decaying model that SWSH will be able to suddenly turn out an EBITDA with 20% margin, unless they just fake the numbers.
Your Example is flawed, as you are paying 100, Direct cost (50), and indirect cost (45) are in different amount and time periods, so it comparing apples and oranges over different time periods. Bad analogy.
A more accurate example would be paying $100,000 for a small business that has $5,000/year in directs costs and $4,500/year in indirect costs, leaving a $500/year profit. If you REDUCE (not eliminate) the $4,500/year to $3,000/year over a 5 year period, you can increase profit to $2,000/year. So you paid $100,000 for something that brings in $2k/year = 50 year ROI.
Not good.
No - this Q will continue to spiral downward - they have dumped more money into mom & pop cleaning companies withe little/no accretive earnings.
