Here is a great post for RB....
By: investorbb
Reply To: None Tuesday, 14 Dec 1999 at 7:20 PM EST
Post # of 1540
PNEC (Information/Opinion):
I bought PNEC yesterday at $1 5/8, basically on a whim. A friend (who's right nearly 100% of the time) gave me the tip, I glanced at the chart and liked the volume, so I took the plunge. As I continue to research PNEC, I'm feeling more and more confident with my investment. I just read the 10ksb and wanted to point out a few excerpts that I liked. These may have been mentioned already, but I just wanted to reiterate their significance. My comments are at the bottom of this post.
In early 1999 NEOS selected NxTrend Technology, Inc. ("NxTrend") to develop and install a custom hardware and distribution software solution. Generally, the NxTrend solution allows NEOS to simplify and expedite operations, reduce inventory, expand performance reporting, including product margin/cost analysis, improve customer service levels and integrate the Internet into daily operations. The NxTrend package was installed at a cost of approximately $600,000 and became operational in October 1999.
PROPOSED WAREHOUSE EXPANSION/AUTOMATION.
NEOS is presently negotiating a lease for the first quarter of calendar year 2000, which will increase NEOS's corporate headquarters/warehouse from the current 41,000 square feet to approximately 88,000 square feet. There is no assurance that the Company will obtain this space or other suitable space or the terms of any such lease. If leased, the larger warehouse space would also allow us to further increase our Stock Keeping Unit ("SKU") count from approximately 140,000 to more than 200,000, which should make us more attractive to customers. A new facility should also allow for additional expansion in future years. NEOS continues to make significant investments in additional automation equipment that would be moved to a new facility. To date, the Company has spent approximately $250,000 on expanding the carousel system and related software. The Company believes this equipment will allow it to increase volume and carry additional SKUs. The Company also has ordered new sortation equipment from Dorner Manufacturing Corporation ("Dorner") that will sort, scan, and label 200 pieces per minute. The sortation equipment should allow for greater dollar volume with less payroll per unit shipped, while at the same time allowing us to maintain our current low error rate status.
CORPORATE STRATEGY.
The Company's goal is to continue to grow its entertainment wholesale division, Northeast One Stop, by leveraging the new fulfillment and distribution systems currently in place and striving to provide customers with a superior level of service. The Company believes it differentiates itself from competitors by offering competitive pricing along with reliable and accurate fulfillment. We plan to continue to expand our customer service and Internet capabilities, make further system enhancements and increase product selection/depth to become a more valuable supplier to entertainment retailers. We intend to leverage our investment in fulfillment and distribution systems by seeking a larger facility during fiscal year 2000 to improve our productivity. We will pursue further growth through internal growth and possible acquisitions.
Internet Fulfillment:
During 1999 NEOS began servicing several Internet retailers such as Amazon.com, EveryCD.com, Tower mailorder, Internet Shopping Network (ISN), and CDUniverse.com.
EXPLOIT THE SALES POTENTIAL OF DVD:
In early 1999, NEOS expanded our SKU base to include DVD. While our sales of this product line are not yet fully maximized, industry publications are reporting hardware sales for this format that are substantially higher than projected and it is expected that sales to consumers will follow. We expect 2000 to be a breakthrough year for DVD sales and believe that we will participate in that growth.
It seems like all over the news now, is how much buying is going on over the Internet; well PNEC is caught up in this epidemic too. How many DVDs and CDs do you think Amazon.com, EveryCD.com, Tower mailorder, Internet Shopping Network (ISN), and CDUniverse.com have sold for Christmas?
Planet Entertainment is also attempting to increase net income and customers. Their purchase of NxTrend's software and search for a larger facility reassures my confidence in PNEC.
The potential information in future Press Releases could have a major factor on the share price of PNEC. Imagine a PR that states PNEC services Amazon.com (AMZN). Another PR that states PNEC have increased their facility from 40,000-sq. ft. to 80,000-sq. ft. affirms the growth of a reputable company. Also, hopefully they will release a PR about the revenue increase and the business to business website. Over at Silicon Investor a poster stated he talked to management today, and said multiple PR's over the next 30 days. We'll see what happens.
Today, the share price dropped because of a MM shakeout. They got a couple emotional traders to sell. I don't see much downfall at these levels. Management wants this to be on the NASDAQ, and I believe it will. This is one of those stocks that you shouldn't watch everyday, or it will mess with you. It's going to have a gradual rise (hopefully), so don't get affected by the up/down fluctuations in share price. BTW, did anyone else have trouble with RB today? There is a board over at Silicon Investor, I can't post, but do enjoy the poster's comments (keep posting over there).
People are reading the filings and starting to get the overall picture now...
:-)
Gary
|
