PCLE - (recommended
to subscribers
on 9/15/04)
BOUGHT
at $3.64 SOLD
at $5.58
On
July 27th 2004 Pinnacle Systems Incorporated, a provider of digital
video products to the broadcast, professional, and consumer
marketplaces, reported fiscal 4th quarter 2004 revenue of $86.5 million
which compares to revenue of $89.3 million reported in the 4th quarter
of fiscal 2003. On a Gaap basis net loss was $11 million or 16 cents
per share. On a non-Gaap basis net income was $2.9 million or 4 cents
per share. Non-Gaap net income excluded $8 million in intangible
asset charges and a $6.6 million charge related to the sale of
discontinued operations.
In fiscal 2004
sales outside of North America comprised 62% of total sales. No single
customer accounted for 10% or more of total revenue in fiscal
2004.
On the earnings
conference call Pinnacle guided for the 1st quarter of fiscal 2005. The
company expects revenue of approximately $70 million with a net loss of
10-12 cents per share. Revenue and earnings per share would be similar
to the results reported in the comparable quarter of the previous
fiscal year. The 1st fiscal quarter is typically the weakest for the
company. For the fiscal 2nd quarter Pinnacle expects revenue to
"increase substantially" with positive operating income between 5% and
7% of sales. The company expects operating income to increase to
approximately 10% of sales by the 4th quarter of fiscal 2005.
Pinnacle has cash
and investments worth $89.1 million or $1.30 per share. Book value is
$1.76 per share and the company carries no debt. At the current price
the stock has a price-to-sales ratio of 0.75. In addition the stock
trades at a discount to it's peers.
Above is a 6 month
chart of PCLE. The stock has been in sharp decline since the beginning
of July. After recently testing the lows put in during early August,
the stock, just today, broke and closed above the downtrend line drawn
above. It did so on heavy volume.
4/07/05
- SOLD
AT $5.58 FOR A GAIN OF 53 %. DURING THE SAME PERIOD THE NASDAQ
WAS UP 5%.
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