As expected, PNWIF put up some crazy growth numbers and had higher expenses as they integrated Costco and Sam`s club.
The key takeaways include:
1)They averaged over 21,000 transactions a day in the second quarter more than Shutterfly. And once Costco was on, they were averaging over 30,000 on the last day of June and as of yesterday they are now over 40,000 a day. Can you say growth?
2)They are finally cash flow positive.
3)There are 25,000 locations in Asia that Kodak has identified for Photochannel that they can use Photochannel`s help. This includes Kodak India, Kodak Australia, Kodak Japan, Kodak Taiwan and Kodak China. I don`t think that I have really describe the upside of this or the value of Photochannel`s technology if Kodak is relying on them so much.
4)While expenses were higher than I expected in the quarter it was not surprising considering the bumpiness and tardiness of the Costco launch. I actually expect expenses to slowly moderate over the coming quarters.
5)With 30% organic growth, and 247% growth with only two weeks of Costco, look out for how much the company will grow in its September and December quarters considering the seasonal benefit coming.
6)With Asia, a new CEO, and a small acquisition that should lead to new business, the future is just very, very bright for PNWIF.
The end of this year and next should be [good ones;] sit back and watch the company`s performance really take off.
Tuesday, August 26, 2008
PhotoChannel (OTCBB: PNWIF.OB), is one of three Aaron Edelheit picks I own, as I've mentioned in previous posts. Here is a link to PhotoChannel's press release via MarketWire: "PhotoChannel Reports Record Q3 Revenues for Fiscal Q3, 2008". And below is Aaron Edelheit's take on the quarter, via the Value Investors Club.