4Q Earnings Estimate
I wanted to be the first to take a crack at estimating DCI's earnings for the 4th quarter of FY 98 (end of March). Because DCI continually adds and discards divisions, it is difficult for the individual investor to get a clear indication where the company is at. This, along with DCI management's hype of the company on-line, I think is causing to the current weakness in the stock price.
The following estimate is based as much as possible on documented prior performance (conservative) and statements made by company officials.
CardCall Canada - based on DCI's sales for the last 4 quarters, it must be assumed that growth of this division is stagnant.
6.5M (FY97 revenues) - 1.5M (sale of WH Smith contract) = 5M
-- 5M/4 = 1.25M/quarter
Muller Media - based on 0.8M revenues for last 4 months of 97 (for lack of more recent detailed data), assume 0.6M/quarter
Note: Summing estimated Cardcall and Muller revenues results in 1.85M which is very close to actual revenues for the past 2 quarters.
DCI UK - based on newsletter from Joe dated 12/9/97, DCI billed minutes in Denmark of 13,900 in October and 30,000 in November. These revenues apparently were included in the recent 3Q release and being so puny were neglected. Joe stated in same newsletter that he expected 300,000 minutes by May, however I will take a conservative tack and assume that minutes increase linearly. Therefore, January = 60,000 minutes, February = 75,000 minutes, and March = 90,000 minutes, resulting in a total of 225,000 minutes for the 3rd Q. I don't know how much revenue DCI gets per minute translated to US dollars. I will assume .20/minute. 225,000 minutes x $0.20/minute. Assume .05M in revenue from DCI UK.
Cyberfax - since we have no confirmation, and no warm fuzzy, at this time that this division is generating any revenue at all, conservatively assume zero revenue.
WorldPass - this one is relatively easy. Per Feb. 3 news release, WorldPass does 15M/year in sales. Divide by 4 to get 3.75M/quarter.
DataWave - forgive me if I haven't entirely done my DD here. Based on CardCall pulling in 5M/yr in revenues above, I will assume that Datawave adds 5M/yr that can be added to DCI's sales. Divide by 4 to get 1.25M/yr
Privilege Card (PEL) - ZERO.
Summing the above estimates for each division:
1.25 + 0.6 + 0.5 + 0 + 3.75 + 1.25 + 0 = 7.35M
7.35M revenue for 4th quarter
Approx. 28M on a yearly basis.
Comments: I believe the above figures establish the lower revenue limit for this stock, because they assume no growth (which ironically is exactly how the company performed when in a managerial role this past year so maybe its not too conservative). I do believe that the 350% revenue gain we should see is attractive. If anyone wants to further these estimates with income and EPS estimates, feel free I would welcome a factual discussion. Everyone should do there own due diligence, could be I made these numbers up?
Greg |
