CPNE.OB

[webby67]

David:
On the revenues, I think the $27 mil is the one to go with. The higher number represents raw revs by biz unit but there are a lot of intersegment transfers and double counts that have to be eliminated before getting the actual revenue number. So the higher number is really not a number I use or look at much in their reporting.

On eps, I am confused about whether they are talking about Basic EPS or FULLY DILUTED eps. My basic eps shows 10 cents for the first 3 qtrs; diluted eps is 9 cents.

Now if they earned about 8.6 million in net income for the year (as per the PR) then their 18 cents would be BASIC eps, since if you divide 8.6 million by the diluted share base (around 54-55 million) you get just 16 cents.

So I am assuming they reported BASIC EPS today, which means it would be just 8 cents for the Q4, put on top of the 10 cents basic already reported for the first 3 qtrs, leaving 18 cents total.

I prefer using fully diluted nos myself, but 8.6 million divided by the fully diluted share base just does not compute to 18 cents for the year.

So I think the eps for Q4 may NOT be as good as all that...

please correct me if I am in error...

[David Randolph]

Webby67 is right, comparable revenues for the 4th quarter were just $8.755 M, well below our $11.5 M average estimate. Probably this has to do with what someone posted somewhere on this thread (I think it was Michael), saying they had very conservative revenue recognition policies, and waited 3 weeks for credit cards to settle everything, so the last 3 weeks of December, which were the strongest, didn't count for this quarter, just for Q1 2007.

Yes, I believe there can be some sell off on the news, but this is the Main Portfolio, and I still see EPS growing a lot in 2007, and that will mean a lot higher share price.

Therefore I'll continue holding CPNE.OB as a long term investment.

(just read webby67's last post, he's right on the EPS number too, diluted EPS for the 4Q was just $0.08, $0.09 is the "basic" EPS number)

[webby67]

David
Just to show that I'm not all doom and gloom, here are some positive nuggets from what I can tease out of the numbers (all are approximates)

-- Revenues were up sequentially from Q3 by about 15.3%; this is actually an acceleration of the sequential growth rate from the 7.6% recorded in Q3 vs Q2 (and revs were up an unbelievable 80% sequentially in Q2 so it moved everything to a new, much higher plateau)

-- Net Income grew sequentially by about 24% over Q3. Not bad, in fact very good !!

-- Margins improved as well... I calculate net profit margin in Q4 of about 43.5%-44.0%, versus 40.8% in Q3.

I dont know if Mr. Hill plans on giving any rough guidance for 2007 in his talk today, but it SURE WOULD HELP !!!

[tireslinger]

Good Morning!! What a beautiful day. I hope all is well with everyone. I was looking at the projections for CPNE.OB that Micheal was gracious enough to do for us and decided that it would be fun for all of us to be able to make our own projections and assumptions and turn them in here on the board. We all have different input and views about how the coming quarters will go so I created a spreadsheet that would make it simple to project  the full year 07 financial s  for CPNE.OB based on Michaels layout.  Just use the white spaces at the bottom where it says Projected growth to make your estimated growth assumptions. This is something that I just threw together this morning so don' be to critical of this spreadsheet. Thanks. 

[tireslinger]

  I love this web community!!! Great Coverage on CPNE.OB WEBBY67, and of course David. The key words that I heard were that the last 3 weeks of December were not counted. We ran some numbers in a past thread that was talking about CPNE new customer growth and how much they were contributing to the last few months of the year. If memory serves me correctly these were some significant numbers. I will go back and try to find the threads. Thanks.
tireslinger

[tireslinger]

  I found it. From David's Analysis



Let's consider monthly growth in November was also 50% from the prior month, October. I get 17,993 new subscriptions in October, that means $898,725 in new revenues for that month.

Now let's consider a very high costumer churn of 50%, each month (I don't know if this is too high or not, it depends on the quality of the service).

October contributes with $898,725 + $449,362 + $224,681 = $1,572,768 for Q4.

November contributes with $1,797,475 + $898,737 = $2,696,212

And December gives $3,594,951 in new revenues.

Sum this up and get $7,863,931 in new revenues for Q4, 2006.

Of the $7,627,533 Q3 revenue, $6,036,364 came from subscriptions. The rest came from the company's other subsidiaries, that is, $1,591,169, which we will leave constant.

Assuming the same monthly churn of 50%, the $6,036,364 obtained in Q3, divided by the 3 months, are $2,012,121.

So, this gives me just $1,006,060 for October, $503,030 for November and $251,515 for December. That is a $1,760,605 revenue contribution for Q4.

Summing it all I get $11,215,705 for 4th quarter revenues. If they maintain the net profit margin of Q3, which was 40.83%, net income for the quarter will be $4,579,219, which translates into $0.0964 EPS.

[webby67]

David:
I am hoping we can at least hold 3.00 on this selloff at the start, but I wouldnt be shocked to see that breached on the downside, at least for a while.

oops,,, too late.. even as I type we are almost at 3.00

Hill better blow the cover off the ball at his presentation in two hours....

[sfhappyfish88]

Added more @$2.90

[Michael]

I just finished listening to the Roth Capital Partners presentation and I really liked the presentation.

Beside the continued stock buy back I paid notice to this part:

Each new customer is worth $175.

We know that each customer in average sign 1.5 subscriptions so each new subscription is worth $117. This validates our churn model.

I will update the model over the weekend. (a bit busy this week).

I am surprised that the stock is down today. Yes they fell short of our forecast but not with much. A model always have a lot of uncertainty and now we have certainty.

Look at the PE and the growth and if you think the stock is trading at fair value. Well sell.

I think it is a bargain,

[raspi]

thanks for your remarks Michael... I hope you are right.. I have a feeling I did everything wrong today.. I first sold XING at the open and then rebought much higher in the afternoon :-(. And I was buying more of CPNE all day long to see it tank at the end of the day.... :-(.
I am surprised to see such a severe reaction to the release of financial data that look pretty good.. I wonder whether we are not missing something, It is OTCBB after all (I still have CHID in memory)...

[gix330]

just came back from lunch and a short walk. Actually i planned to sell when it bounced back to $3.24, but then i decided to wait for the webcast at 11:30am. And yes, I liked the presentation also, but too bad CPNE did not hold the line at $3.00, but take a look at eh PE and the Growth, i do not think it is trading at fair value; therefore, i bought more around the bottom and i am pretty confident with its medium or long term.

[jmccar2]

This will take some time to recover...I read somewhere that the next support level after 2.75 is 2.25 

Americanbulls has posted a Sell-If:

http://americanbulls.com/StockPage.asp?CompanyTicker=CPNE&MarketTicker=OTC&TYP=S

Does anybody see a silver lining here?

[tireslinger]

Hello everyone!!
I was wondering if any one could tell me how much interest expense CPNE had to pay out in this quarter for the retirement of the 5 million in debt that they had. This number could have adversly affected quarter in a negative way and should be deducted from the bottom line. This would fall under the category of Non recurring expenses or one time charges. Since CPNE has retired most all of their debt this will not be a charge to EBTDA in the coming quarters.

[webby67]

jmccar: The only silver lining I still see here is that the stock remains fundamentally CHEAP based on expected '07 earnings. that has to count for SOMETHING...

tire: we wont know the actual amount of that early retirement charge until the company files its full financials probably next week. It was mentioned very very briefly in today's presentation, but not as to the specific number.

[tireslinger]

jmmcar,
That is exactly why I would not sell the stock today in fact I bought more. I need to see the financials to get a complete picture of the quarter. I think the quarter was better than most people thought it was. Yes sales were light but, we also should remember that the last three weeks of december were not figured into the equation. 1st Quarter 07 could be a shocker!!!