Dennis,
Don't discount the fact that for the year and till June 1999 we have VGM money. At that point in time it will be just bingo halls in SC. There must be other states that allow VGM's, but even if there are not, think of the number of halls that can be added by 6/99. Let's see 14 now, plus 4 under contract, plus 10 by end of June, plus another 10 per each 6 months till June 99 would be 48 halls. Conservative or pie in the sky, I don't know, but that would give us earnings of $.72 less corporate expense of $.27 or net earnings of $.45 and after tax earnings of $.29. This of course is based on a full year earnings. $.29 times 20 is $5.80. Not too bad.
I think from a P/E standpoint we are safe. However, remember the warrant call and the current stock price. P/E's and fundamentals mean very little if the market wishes to exit a stock. Not to be negative, but we could see new lows if the market decides the outlook is bad and SC is toast. I guess I would disagree, but somehow I don't see myself supporting the market! :) In fact, I wish for once the market would support me! LOL!
Every 50 VGMs produce $300,000 net profit. (50 times $6,000) That is equal to 3.3 cents per share (is that better Chalice!) With 700 VGM's that is $.46 cents per share. I would expect some additional VGMs will be added to current locations and would expect that that will help us down the road.
So let's see, $.46 from VGM's and 14 bingo halls for a full year, and 14 additional by end of June, let's say 14 for 1/2 a year, would be $.315 less $.27 for corp expense equals $.50 before tax. After tax would be $.33...right in line with what JTO stated. Certainly corp expenses could be a bit higher and decrease that by a penny or two or the bingo halls might not come on line as quickly and that could decrease by a penny or two and we could be at $.25. On the other hand, things may go smoother than we thought and we could be at $.35 to $.40.
To break $.40, we need additional expansion in either bingo halls or VGM's that we don't know about yet. But in the meantime, I think my short-cut way of determining earnings appears to prove out.
1 bingo hall = $.015 per share earnings
50 VGMs = $.033 per share earnings
Corp Exp = $.27 per share earnings.
After tax = 65% of above calculation
-Scott |
