Value Microcaps Motherboard

[MikeDDKing]

More DD on NKBS

NKBS is continuing to run. It is +0.16 to $2.79. I picked up more shares today.

I listened to last quarter's conference call again last night. The more detailed guidance they gave was:

Q2 - Revenue = 25M, EPS = $0.10

Revenue Pretax income
Web Hosting 2.2M 900K
Lending 3.5M 1,000K
Merchant Processing 7.4M 1,200K
Capco & other 11.9M 3,000K

Q3 - Revenue = 22M, EPS = $0.01

Revenue Pretax income
Web Hosting 2.4M 950K
Lending 3.3M 550K
Merchant Processing 8.9M 500K
Capco & other 7.4M 1,200K

Q4 - Revenue = 40.5M, EPS = $0.36

Revenue Pretax income
Web Hosting 2.4M 975K
Lending 3.8M 1,600K
Merchant Processing 10.0M 850K
Capco & other 24.3M 16,300K

They also stated that Q4 includes a 1.3M tax benefit. They stated that the benefit could happen in Q3 or Q4. I am hoping it moves up to Q3 to smooth the earnings sequentially.

I spent some time further understanding the Capco business. The reason for the lumpiness is that they recognize revenue when they reach various levels of loan volume in a particular Capco. So, even if the loan volume done within a particular Capco is constant quarter to quarter the revenue will vary. Going forward, the Capco business is becoming a smaller component of their business.

Mike