Pinnacle Data Systems, Inc.. The Group's principal activities are to design, assemble and sell computer products and provide repair and related services. The products include complete systems, specially designed products, including boards and attach cards, and software. Complete systems include fully integrated hardware and software from multiple sources. The Group resells some hardware and software manufactured by other original equipment manufacturers. It also offers complete after-the-sale service and support including repair, logistics and product end-of-life management services. The products and services are provided primarily to original equipment manufacturers in the telecommunication, medical system, process control and computer industries.
Price action is currently stuch in a trading range at the moment. Though we recently just had a confirmed bear trap as well as earnings released yesterday pushing this one up 15% for the day. A close above 3.44 to break out of the trading range and higher prices could be in near sight.
PDSi Reports Results for 2005 Third Quarter; Acquisition Contributes to Record Quarterly Sales and Strong Earnings
10/26/2005 9:00:16 AM
COLUMBUS, Ohio, Oct 26, 2005 (BUSINESS WIRE) -- Pinnacle Data Systems, Inc. (PDSi) (PNS) today announced results for the third quarter ended September 30, 2005.
John D. Bair, Chairman and CEO, commented, "We are pleased to report record quarterly sales of $14.3 million and strong earnings per diluted share of $0.05 for the third quarter of 2005, which benefited from the acquisition of GNP Computers, Inc. on August 15, 2005. This required a tremendous effort by the entire team to make it all happen."
Mr. Bair continued, "We expect to achieve all time record sales in the 2005 fourth quarter and year. As anticipated, organic growth increased in the third quarter and has been greatly enhanced by the company's growth strategies, which includes acquisitions. We will continue our efforts to accelerate the growth of the company utilizing both avenues."
Third Quarter Results
The results of the third quarter of 2005 specifically benefited from the August 2005 acquisition of GNP. Sales for the third quarter ended September 30, 2005, increased 62% to $14.3 million from $8.8 million for the third quarter ended September 25, 2004. Gross profit for the third quarter of 2005 increased 103% to $3.1 million from $1.5 million for the same period of 2004 based on the increased volume and higher service revenue.
Operating expenses, including selling, general and administrative (SG&A) expenses increased 64% to $2.5 million for the third quarter of 2005 compared to $1.5 million in the third quarter of 2004 due to additional expenses related to the acquisition, on-going investment in sales and marketing, and profitability-based expenses. Operating expenses for both periods were 17% of sales.
Net income increased to $339,000, or $0.05 per diluted share, for the third quarter of 2005 from $1,000, or $0.00 per diluted share for the third quarter of 2004.
Nine Month Results
The results of the first nine months of 2005 also benefited from the August acquisition of GNP. Sales for the nine months ended September 30, 2005, increased 6% to $28.7 million from $27.1 million for the comparable period ended September 25, 2004. Gross profit for the first nine months of 2005 was $6.8 million, a 4% increase from $6.5 million for the nine months of 2004.
In the first nine months of 2005, operating expenses increased 16% to $5.7 million from $4.9 million in the first nine months of 2004, mostly due to the third quarter increases. Operating expenses for the first nine months of 2005 were 20% of sales compared to 18% of sales in the comparable period of 2004.
Net income for the first nine months of 2005 was $548,000, or $0.09 per diluted share, compared to $860,000, or $0.14 per diluted share, for the first nine months of 2004.
Additional Operating Results
For the third quarter of 2005, product sales totaled $11.7 million, an increase of 55% from $7.6 million in the third quarter of 2004. Gross profit on products increased 32% to $1.5 million in the third quarter of 2005 from $1.2 million in the same quarter of 2004 due to increased sales volume, which was partially offset by lower margin mix. The gross profit margin on product sales was 13% for the third quarter of 2005 compared to 15% for the third quarter of 2004.
For the first nine months of 2005, product sales totaled $22.0 million, a decrease of 3% from $22.8 million in the first nine months of 2004. Gross profit on products declined 39% to $3.0 million in the first nine months of 2005 from $4.9 million in the first nine months of 2004 due to a lower margin mix. The gross profit margin on product sales was 13% for the first nine months of 2005 compared to 21% for the first nine months of 2004.
For the third quarter of 2005, service sales totaled $2.5 million, an increase of 106% from approximately $1.2 million in the third quarter of 2004, due to new repair and hardware management programs started last year and programs acquired with GNP. Gross profit on service sales for the 2005 third quarter increased 328% to $1.6 million from $365,000 for the same period in 2004. The gross profit margin on service sales improved to 62% in the third quarter of 2005 from 30% in the 2004 third quarter due to higher service sales volume and the resulting increase in operating leverage.
For the first nine months of 2005, service sales totaled $6.7 million, an increase of 53% from $4.4 million in the first nine months of 2004. Gross profit on service sales for the first nine months of 2005 increased 136% to $3.8 million from $1.6 million for the comparable period in 2004. The gross profit margin on service sales improved to 57% in the first nine months of 2005 from 37% in the 2004 first nine months due to higher service sales volume resulting in increased operating leverage.
Highlights of the Quarter
During the third quarter of 2005, PDSi
-- won a new account with a leading Italy-based telecommunications equipment provider,
-- won new programs with a major imaging equipment manufacturer,
-- won multiple new accounts in the emerging network appliance space, and
-- acquired the assets and hired certain employees of GNP to obtain that business.
Acquisition Highlights
PDSi acquired GNP's assets totaling approximately $8.7 million, of which $8.3 million was receivables and inventory.
PDSi immediately benefited from
-- over 20 customers with similar profiles and expansion opportunities as PDSi's existing business,
-- a suburban Los Angeles sales office and production facility,
-- an expanded international presence with an Asia-based sales office and customers in Asia and Europe,
-- an expanded product line including telecommunications platforms and application-specific devices, and
-- additional technical and engineering expertise and capabilities.
During the third quarter, the Company increased its asset-based line of credit with KeyBank NA to $11 million from $6 million. PDSi paid for the acquisition by paying off a $2.3 million asset-based line of credit and assuming payables and other accrued liabilities of approximately $6.4 million, including the transaction fees for both parties.
The market value of the assets was essentially equal to the total of the assumed liabilities and capitalized transaction expenses. As a result, no goodwill was recorded on the transaction and no long term debt was assumed or incurred.
Christopher L. Winslow, President and COO, said "The acquisition of GNP was attractive from both a business and financial perspective. Importantly, it met our criteria for acquisitions and immediately enabled us to extend our capabilities. GNP had built an outstanding customer base, a robust infrastructure and a great reputation for quality and service in the industry. Based on our due diligence, we believed that we could significantly improve the former operations of GNP. The company just needed to be right-sized in the areas of facilities and human resources, by far its two largest expenses. We are excited about the opportunities to accelerate the growth of PDSi and to achieve higher levels of long-term performance."
Outlook
Michael R. Sayre, Executive Vice President and CFO, stated, "As a result of the acquisition and the expected organic growth of the combined organizations, we anticipate another record sales year in 2006. We will continue evaluating viable acquisition opportunities that meet our established criteria, including strategic fit and accretive performance in less than a year. However, we are not planning any additional acquisitions before the second half of 2006. Further integration of the two businesses and infrastructure development for growth in the future will occur simultaneously for about the next year. Over that period, we plan to spend up to $1 million in those areas, mostly in information technology and systems, with about half of that amount being capitalized as fixed assets. We expect to begin those expenditures in the fourth quarter of 2005. We anticipate continuing profitability in the fourth quarter of 2005 and growing annual earnings in the 2006 year."
The big problem with PNS is volume. I owned it once and it took me for ever to unload my holdings. And I only had 5K shares. I had to sell a few hundred shares at a time because larger amounts would cause a sharp decline in price. The float is small I remember.
PNS, with only $13M cap and 4M share float, will potentially be a big gainer in months ahead with respect to today's price. I believe PNS is currently trading near its 52-week low because of tax-selling reasons and not because anything is wrong fundamentally.
PNS should fly after 4Q is reported. Last year PNS reported $16M in revenues and 7c/share net income. This is what the CEO said in the company's 3Q earnings report:
"We expect solid 2006 fourth-quarter sales and gross profit comparisons on a sequential quarter and year-over-year basis," Michael R. Sayre, president and CEO, said in a release.
Hmmmm....net income greater that 7c/share????
http://finance.yahoo.com/q/is?s=PNS
PNS revenues for 2006 will exceed $60M ....a 20%+ increase.
My price targets:
January 31 2007..... $3+....
After 4Q earnings the 3rd week of January....$4+
http://stockcharts.com/charts/gallery.html?pns
Company website:
http://www.pinnacle.com/
Mark this post
I can see the potential here but there is so little trading volume. However, it looks like the volume goes way up on earnings. I'll keep an eye on it.
"PNS" Threads have been Merged.
Please use the search before starting new threads on a Stock Pick.
Chances are a thread already exist.
So why not post whatever you have to comment about on that pick to that thread.
"Simplicity" My fellow traders. ;)
All history on a stock pick in 1 thread is awesome. ;)
Just trying to get threads together,so we don't have a numerous amount floating around on the same stock.
Thank You....and good luck with all your trades....make some $$$ ;D
Happy New Year ! May it be Prosperous for all @ 3SOF...... ;)
PNS is looking strong the last two days. PNS could be a real big gainer if the CEO accomplishes his goals to get to $100M in revenues by 2008 and 60c/share net income. Definitely a lofty goal but i've seen it happen before.
Setravis,
Thank you for merging the threads.
looking good...:)
PNS, with only $13M cap and 4M share float, will potentially be a big gainer in months ahead with respect to today's price. The stock is starting to move back up after tax selling
http://stockcharts.com/charts/gallery.html?PNS
PNS should fly after 4Q is reported. Last year PNS reported $16M in revenues ans 7c/share net income. This is what the CEO said in the company's 3Q earnings report:
"We expect solid 2006 fourth-quarter sales and gross profit comparisons on a sequential quarter and year-over-year basis," Michael R. Sayre, president and CEO, said in a release.
Hmmmm....net income greater that 7c/share to be reported the 3rd week of February??.....that will be noticed I am sure.
http://finance.yahoo.com/q/is?s=PNS
PNS revenues for 2006 will exceed $60M ....a 20%+ increase.
PNS attributed its 3Q loss to about $1.4 million in expenses related to closing its Monrovia, Calif., facility and moving the work to a 26,000-square-foot facility in Groveport. The company is consolidating its West Coast facility, which it inherited through its 2005 acquisition of Monrovia, Calif.-based GNP Computers Inc.
The company anticipates savings of $1.6 million when the transition is complete.
Now, you don't have to be a genious to realize that $1.6M would have a huge effect on the bottom line of a company with only 6M outstanding shares.
Do your DD on this one because tax selling season is almost over and the January Effect and a huge 4Q earnings are just around the corner.
Company website for more info.....listen some of the lastest CC's in the Investors Relations' department (very professional CCs with slides and all):
http://www.pinnacle.com/
About PNS (From Yahoo):
PDSi (AMEX: PNS) provides professional services around the development, deployment and support of sophisticated computer systems that are, or are in, the products of its world-leading original equipment manufacturer customer base in the computer and network, imaging, medical, telecommunications, and aerospace equipment industries, among others. PDSi offers a full range of engineering, product development, project and program management, integration, manufacturing, and lifecycle support services designed to increase product speed to market and engineered product life while decreasing overall costs to develop, deploy and service their products.
On Fire with 7800 shares traded??? I don't think so.
PNS is quietly moving up towards my $3+ target by the end of January, 2007.
PNS.....6.4M OUTSTANDING SHARES.....3.8M SHARE FLOAT.....$17M MARKET CAP...TRADING AT P/S OF 0.2
PNS will report its 1Q 1Q 2007 in less than 2 weeks. Last month PNS reported record 4Q revenues due to large orders from SUNW and Citrix.
PNS is a major supplier of custom-engineered products and services for global Fortune 500 companies. PNS provides engineering, product development, project and program management, integration, manufacturing and product lifecycle support solutions to Original Equipment Manufacturers (OEMs) in the medical, imaging, defense, telecommunications and computer equipment, and instrumentation industries. With an increased trend towards business process outsourcing, PNS is well positioned for future growth.
There aren't many companies with a market cap of only $17 million that can claim having almost a dozen Fortune 500 companies as costumers. PNS customers include big global Fortune 500 OEM players like Siemens, Xerox (NYSE: XRX), Hewlett-Packard (NYSE: HP), Sun Microsystems (Nasdaq: SUNW), Texas Instruments (NYSE: TXN), General Electric (NYSE: GE), Motorola (NYSE: MOT) Bayer (NYSE: BAY), and many more.
This recent analysis on PNS is very bullish and predicts that the pps will range from about $17 to over $50 in the next 3 to 5 years:
http://twofishinvestments.com/FISH21PNS.html
About PNS (From Yahoo):
PDSi (AMEX: PNS) provides professional services around the development, deployment and support of sophisticated computer systems that are, or are in, the products of its world-leading original equipment manufacturer customer base in the computer and network, imaging, medical, telecommunications, and aerospace equipment industries, among others. PDSi offers a full range of engineering, product development, project and program management, integration, manufacturing, and lifecycle support services designed to increase product speed to market and engineered product life while decreasing overall costs to develop, deploy and service their products. For more information, visit the PDSi website at www.pinnacle.com.
Watch for earnings date announcement and earnings next week.
Hi comovaivoce
Seen your post oh PNS and thought I would take a look at it. I'm not saying this is a bad company but before you decide to get in this you need to look at the volume it trades in. Volume of a company can tell you a lot about it and when it doesn't trade with good volume it can be very hard to get rid of sometimes.
Goodluck trading
i mean come on!!!!
PLEASE don't pump stocks that have an average daily $ volume of $25,000 here. Do you think we are crazy??? There is no way ANYONE here would buy into that, no matter what the stock did. I don't even want to know what the bid/ask spread is on a stock like this...
PNS reported record 4Q and FY 2006 revenues last week. Net income was affected by expenses related to the move of one its manufacuturing units from California to Ohio to save $1.6M or 25c/share once the move is completed
PNS was able to squeeze a small profit despite being in the process of relocating its manufacturing plant and personnel from California to Ohio during the quarter.
Earnings Summary:
- Record 4Q 2006 revenues $26.3 vs $15.9 M in 4Q 2005......a 65% increase
- Record 2006 FY revenues of $76.9M vs, $44.6M in 2005
Here is the earnings Link:
http://biz.yahoo.com/bw/070315/20070315005557.html?.v=1
PNS is an excellent longterm hold IMO. It reminds me of HURC, BOOM, and DXPE about 3 years ago when they were trading between $2 and $3 and no one evern heard about them. Liquidity will impreve as the company executes its challenging 3-tear business plan. Righ now volume is cery low but i am adding in every dip. PNS is an ideal retirement stock for me because i expect q 10-fold gain in just a couple of years.
This recent analysis on PNS is very bullish and predicts that the pps will range from about $17 to over $50 in the next 3 to 5 years:
http://twofishinvestments.com/FISH21PNS.html
About PNS (From Yahoo):
PDSi (AMEX: PNS) provides professional services around the development, deployment and support of sophisticated computer systems that are, or are in, the products of its world-leading original equipment manufacturer customer base in the computer and network, imaging, medical, telecommunications, and aerospace equipment industries, among others. PDSi offers a full range of engineering, product development, project and program management, integration, manufacturing, and lifecycle support services designed to increase product speed to market and engineered product life while decreasing overall costs to develop, deploy and service their products. For more information, visit the PDSi website at www.pinnacle.com.
Before he was comovaivoce, he was newnewbie, and before that he was terabemo. He's a veteran touter. Buyer beware!
Keep an eye on PNS. Earnings coming up. Compamy making bold moves to grow profitably
Ya I think we are all getting sick of this type of post clogging up the message boards. Nobody really cares what the analysts say anyways - this is a TA board. Less you forget thousands of people listened to analysts during the tech crash when they just needed to listen to the charts! ;)
Forget the analysts and your incessant pumping... the charts show the real picture. ;D
Either change or leave the board - we can see your negative 4 rating....personally id push for the mods to perm ban your IP address.
And just for the record PNS looks aweful - descending triangle with a neckline of $2.00 - it drops below that (which it likely will with the pathetic earnings) and it will be worthless. A good short if anything!
PNS is growing at double digit rates and has reported 3 consecutive profitable quarters,
http://finance.yahoo.com/q/is?s=PNS
The company has just acquired another profitable division and should continue to grow profitably in the foreseeable future.
PNS is trading at a ridiculous 0.2 times sales. The following link for the latest release will give a hint about the big potential this undervalued and under the radar company has short and long term (click on audio replays icon):
http://www.investquest.com/iq/p/pns/confcall/index.htm
PNS has many blue chip customers like Sun Micro, AMD, CSCO, INTC, IBM, APPL
"PNS" Threads have been Merged.
Please use the search before starting new threads on a Stock Pick.
Chances are a thread already exist.
So why not post whatever you have to comment about on that pick to that thread.
"Simplicity" My fellow traders. ;D
All history on a stock pick in 1 thread is awesome. ;)
Just trying to get threads together,so we don't have a numerous amount floating around on the same stock. ::)
Thank You....and good luck with all your trades....make some $$$ ;D